SOURCE: Cutting Edge Information

November 13, 2008 08:13 ET

What Obama's "Changes" Mean for Pharmaceutical Pricing: Cutting Edge Information Breaks Down What the Next Four Years May Hold

RESEARCH TRIANGLE PARK, NC--(Marketwire - November 13, 2008) - During President Elect Obama's campaign there were many cries for change and none as loud as the cry for healthcare reform. Both candidates voiced their plans for change and the pharmaceutical industry must now focus on what an Obama presidency really means for their bottom line.

Increasing the use of generic drugs for Medicare and Medicaid and allowing the importation of safe prescription drugs from other developed countries were two platforms on which the Obama health plan stood. A more costly proposition for pharma could be lifting the ban that currently prevents the federal government from negotiating with drug companies to get lower prices on drugs for the Medicare program. Obama's campaign estimated that this could cut government healthcare costs by $30 billion; money coming directly out of drug company's pockets.

Pharmaceutical pricing teams are sure to face increased scrutiny from government payers armed with the new ability to negotiate. To combat this change, pharmaceutical companies must begin their health outcomes analysis as early as possible. A new study from Cutting Edge Information, a leading Pharmaceutical business intelligence firm, reveals that 56% of companies begin pricing-focused market research before phase III. This can be far too late to shape a quality health outcomes study, which many 3rd-party and government payers are requiring. The new report, "Outcomes-Based Pharmaceutical Pricing: Meeting Stakeholder Needs," discusses the most effective ways to shape pricing analysis to ensure a successful trip to the bargaining table.

The 124-page report provides an in-depth analysis of pharmaceutical pricing planning, processes, decision making and resources. Based on these findings and surveyed companies' best practices, CEI analysts offer action points to guide companies to set the right prices and optimize their profits. (

The report contains 400+ metrics, while data focuses on pricing teams' structures, phase-by-phase pricing processes and methodology, and spending and staffing resources. Metrics include the following:

--  Resource support, innovative versus me-too drugs
--  Cross-functional involvement in pricing decisions
--  Share of companies with dedicated pricing departments
--  Lifecycle entry and exit points for functions involved in the pricing
--  2008 pricing budgets and headcounts, by company size
--  2008 headcounts broken down by geographic market and by company size

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