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CBI Presentation 042010

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CBI Presentation 042010

  1. 1. Design An Effective Pricing Strategy Throughout the Product Lifecycle Rob Werner April 20, 2010
  2. 2. Outline of Discussion ✤ Role of Value to Optimize Pricing and Access ✤ Defining, Demonstrating and Communicating Value ✤ A Few (Fairly Obvious) Implications to Consider ✤ Food For Thought
  3. 3. The Landscape is Changing Very Rapidly ... But Speed is All Relative
  4. 4. The Landscape is Changing Very Rapidly ... But Speed is All Relative “Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?” George Carlin
  5. 5. The Landscape is Changing Very Rapidly ... But Speed is All Relative “Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?” George Carlin
  6. 6. The Landscape is Changing Very Rapidly ... But Speed is All Relative “Have you ever noticed that anybody driving slower than you is an idiot, and anyone going faster than you is a maniac?” George Carlin “Remember folks, street lights timed for 35 mph are also timed for 70 mph.” Jim Samuels
  7. 7. It is All About Value Drummond et al. Figure 1. Relationship between EBM, CER, HTA, and related concepts. EBM, evidence-based medicine; CER, comparative effectiveness research; HTA, health technology assessment. Excerpted from: Key Principles for the improved conduct of health technology assessments for resource allocation decisions; Drummond, Schwartz, Jӧnsson, Luce, Neumann, Siebert, Sullivan conclusions, and recommendations are applied. This is par- producing high quality assessment reports that can be used ticularly true when reports Assessment in by one organization are International Journal of Technology produced Healthcare 24:3 2008, 244-258 by a range of decision makers (e.g., the Canadian Agency for used by another. For example, the Drug Effectiveness Re- Drugs and Technologies in Health (CADTH), the Swedish
  8. 8. ... And Evidence is King
  9. 9. What is Value? ✤ Value Can Include a Variety of Components • Unit Cost / Acquisition Cost • Impact on other healthcare costs • Other societal costs • Productivity • Impact on care givers • Patient satisfication / QOL ✤ Value is Defined In Comparison to Other Alternatives • Focus on Comparative Value / Comparative Effectiveness
  10. 10. Value Is Influenced by Many Factors ✤ You can define, but ... external factors have significant influence • Key product in class goes generic • Change in standard of care due to competitive entrant • Price based competition - monopsony buyer • Scientific debate • e.g., Vytorin - ENHANCE
  11. 11. How Does The Customer Define and Assess Value? • Who is the customer, and how do they define “value”? • What the Customer Wants You to Know, Ram Charan • How should they define value? • How does the customer assess value? Customers Want • Healthcare Solutions - not just pharmaceutical products • That work in the Real World • Value that can be demonstrated
  12. 12. How Do You Demonstrate Value? • What types of evidence will be considered? • RCTs only? Observational trials? • Retrospective analyses? Systematic evidence reviews? • PROs? • Role of modeling • Budget impact models • When do you build disease models? • Importance of transparency
  13. 13. How Do You Communicate Value? ✤ Who Is The Target Audience? • Payer vs. Provider vs. Patient? ✤ Who Is In Best Position to Communicate to Audience? ✤ What new skills sets / competencies / tools required? • e.g., Field Based Outcomes Liasons • Ability to manage diverse HTA reviews is critical ✤ What is Customersʼ Level of Proficiency? Goal is an Ongoing Dialogue About Value
  14. 14. A Few (Fairly Obvious) Implications to Consider ... Date
  15. 15. 1. Adopt a Continuous Evidence Development Mindset ✤ Consider Building a Value Development Plan • Canʼt have all of the evidence at approval • Anticipate changes to your value proposition due to external developments • E.g., Changes in Standard of Care • Impact of patient subpopulations ✤ Incorporate “Value” into the Development Process • Donʼt overlook challenge for R&D and Regulatory groups ✤ Line Extensions Subject to the Same Rules
  16. 16. 2. Engage Payers in the Value Development Process ✤ “Pressure Testing” Value Proposition of Pipeline Products Through External Advisory Groups ✤ NICE External Consultancy ✤ Does It Work in My Patient Population? ✤ Ingenix, etc.
  17. 17. 3. Get The Timing Right - Fastest Is Not Always Best • Fastest indication to market not always best • e.g., Anti-TNFs - RA vs. Crohns vs. Psoriasis • Timing of market introductions can be important
  18. 18. 4. Discipline is Essential • Ever increasing global price transparency ... trend only likely to accelerate • Impact of reference pricing • Rigorous, coordinated approach to pricing and access globally is essential • Pricing should not undermine value proposition
  19. 19. 5. Don’t Overlook Distribution Strategy As Key Component of Value • Distribution solution can help maximize clinical outcomes in the real world • Particularly critical for Specialty / Biotech products • Distribution partners are struggling to demonstrate their value and eager to collaboration
  20. 20. 6. Alternative Pricing Strategies Still Developing • Risk Sharing • Coverage with Evidence Development
  21. 21. Some food for thought ... ✤ Managing the transition to the new Evidence/Value environment ✤ How much evidence is enough? ✤ When is it needed? ✤ How do we make coverage, reimbursement and access decisions in the absence of sufficient data ✤ Who bears the cost and risk of developing all of the new evidence of value? ✤ How do we “value” incremental innovation? ✤ How do handle individual patient preferences and patient variability?
  22. 22. Thank You! ✤ Questions???? ✤ RWerner84@gmail.com

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