5. Model N, Inc. Proprietary and Confidential 5
Widespread Use of ERP/IRP
Out of 31 countries….
29apply IRP
and
23as the main
systematic criterion for
pricing*
*Source: (2015) Overview of External
Price ReferencingSystems in Europe
6. 6Model N, Inc. Proprietary and Confidential
IRP is becoming a
dynamic policy tool…
In a sample of 38 different markets, 58% have
changed their IRP framework in one or more ways
since inception. Interestingly, countries having
introduced IRP more recently appear just as likely to
have made subsequent modifications as those having
implemented it earlier in time
- The fifty shades of grey of IRP (20/2/2015)
7. Model N, Inc. Proprietary and Confidential 7
Movement towards increased IRP
SOURCE: Future of global pricing - BRAVE NEW WORLD - PMA Conference
Asia
LATAM
Eurasia
Russia: For innovative imported products, price is based on a
basket of 20 EU countries including Greece
Turkey: Pricing based on basket of 5 EU countries including
Greece
Brazil: International referencing used for innovative drugs offering advantages
over existing products in terms of efficacy, side effect profile or treatment cost, or
with new modes of administration
Mexico: International price comparisons are used by CCNPMIS as a starting point
for negotiations
Colombia: New National Pharmaceutical Policy aims to tackle poor
implementation of existing pricing controls with international referencing
included among the measures
China: NDRC beginning adoption of international reference pricing
India: Proposed a new pricing policy referencing public procurement prices
adjusted for differences in per capita income
Thailand: Thai NHSO considering adoption of international reference pricing
Vietnam: Introduced a referencing system whereby prices are evaluated based
on cost, insurance, freight prices in other countries in the region with similar
incomes
10. Model N, Inc. Proprietary and Confidential 10
China – Tendering Environment
• All 31 provinces in China will (have to)
use a tender process
• Winning the tender is a ticket to sell
into the Hospitals
• Tender mechanisms will vary from
province to province
• National price referencing between
provinces
• Product groupings under challenge
• Quality & Compliance matters
11. Model N, Inc. Proprietary and Confidential 11
2014 EU Directive emphasises M.E.A.T concept
12. Model N, Inc. Proprietary and Confidential 12
Global Tender Management Challenges
Published RFP
RFP
Screened
Evaluated
RFP
Missed
opportunities
all along the
tender funnel
2
Suboptimal
decision making
based on poor
data
Poor analytics not
enabling proper
competitive
intelligence
3
Missing documents
for Tender Package
and no harmonized
Templates
Lost Revenues Tender Strategy
Lost Revenues
Awareness & Planning Evaluation & Decision Response Fulfillment
1 4
6 - 12 months before
Based on your tender planning
cycle – before the RFP is
published
The RFP is published
and on your table
Ready for bidding Reflect the
outcome
Monitor the
success
Approval Process Prepare Bid Contract DurationRFP Bid Award
Optimal Bid Price
Tracking
Source: (2016) Tender Management Benchmarking Survey, HPS
13. Model N, Inc. Proprietary and Confidential 13
Global Pricing is a Worldwide Team Sport
Central teams cannot sail
the ship alone….
…. Especially in rough seas
Worldwide, coordinated
teamwork and
collaboration is required…
… with critical
collaboration across
countries, regions and HQ
14. Model N, Inc. Proprietary and Confidential 14
From Reactive to Proactive Management
~ 10 – 15%
Querying source
systems and
extracting data
Exchanging office
documents
Emails and
telephone calls
Coordinating and
validating data
Manual
transaction
processes
~ 65-85%
Decision
Analysis &
Reporting
Decision
Analysis &
Reporting
• Internal and external data automation
• On-line collaboration and audit trails
• Email and mobile device integration
• Workflow driven processes and approvals
• Complete data and document repository
• Adhoc and reactive
• Time consuming to
simulate
• Limited number of
variables and scenarios
• In-built risk simulation
• First and second level
effects
• Price impact forecasting
• Multiple event scenarios
inc launches
• Launch and market
access activity tracking
• In-built reports and self-
service design
TODAY TOMORROW
19. Key Statistics
• 70 + countries engaged
• 90 product families in many SKUs
• > 4,000 price changes / approvals per year
• +300 stakeholders involved in pricing
decisions
19
20. AstraZeneca / ModelN journey
20
Evaluation
of AZ’s
needs
Selection
of vendor
Launch of core
GPM ModelN
– launch jointly
in all markets
Launch of
competitor
module
Launch of
Simulation
module
Q2/Q3
2013
Q4 2013 June 2014 Jan 2015 Jun 2015