SOURCE: Cutting Edge Information

Cutting Edge Information

July 06, 2011 09:51 ET

Pharmaceutical Pricing Strategies Threatened by Europe's Austerity Measures

Budget Crisis Economic Policies Are Creating Uncertainty Around Pricing and Reimbursement, Finds Cutting Edge Information

RESEARCH TRIANGLE PARK, NC--(Marketwire - Jul 6, 2011) - European governments' emerging economic policies and government-specific price cuts around the globe have drug companies' pricing teams on edge, according to a new study by Cutting Edge Information.

Although executives view government-specific price cuts as the top risk in their pricing strategies, Europe's recent austerity economic policies were the next most significant threat among a list of recent trends impacting drug pricing that included parallel trade and the United Kingdom's shift to a value-based pricing model.

The new study, "Global Pricing Strategy: Maximize Revenue in an Evolving Economic Climate," examines trends that impact pharmaceutical pricing strategies. The study found that even a country as small as Greece can impact the pharmaceutical pricing strategies of companies across the industry.

"The reasoning behind Europe's new economic policies certainly resonates within drug pricing teams," said Adam Bianchi, chief operating officer at Cutting Edge Information. "With backgrounds in finance and economics, market access executives understand the budget crunch governments are under after bailing out their economies and industries."

The current budget crisis, combined with longer term healthcare cost trends, means that government and public payer leaders have to make painful decisions somewhere. Unfortunately for life sciences companies, reimbursement for drug and device treatment has become a focus point for cost-cutting discussions.

Drug companies have already begun to feel the effects of the new economic landscape in Europe. Germany has enacted a two-percent across-the-board price cut for pharmaceuticals. Each country and payer is eying how other countries and payers react, which could lead to price cuts in other European nations, the United States and emerging markets.

Pricing's elevated role in the drug lifecycle reflects the growing importance of a sound and well-planned pricing strategy. "Pharmaceutical Pricing Strategy" (http://www.cuttingedgeinfo.com/research/market-access/pricing-reimbursement/) explores benchmarks for pricing departments' team structure, staffing and budgets and gives a detailed view of key trends including:

  • Growing company and payer experience with risk-sharing agreements
  • Government-specific price cuts
  • The United Kingdom's move away from NICE's veto authority and toward value-based pricing
  • Increasing focus on comparative effectiveness
  • Parallel trade/re-importation in both developed and emerging markets

For more information about pricing, reimbursement and market access management, contact Elio Evangelista at +1 919-403-6583.

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    Elio Evangelista
    919-403-6583