The document summarizes the key lessons and conclusions from an executive briefing on pricing pressures in the life sciences industry. It identifies six shifts occurring in the market access environment that require companies to adapt, including understanding value, global heterogeneity, polycentric networks, systems knowledge, information technology, and focusing on new product development, supply chain management, or customer relationship management. The briefing concluded that companies need to optimize access and returns, develop innovative contracting agreements, and pursue responsible and sustainable pricing to thrive in response to changing selection pressures.

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EPP Life Sciences Executive Briefing
conclusions
March 31, 2016

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Closing Remarks from the Moderator
What Are the Key Lessons
Learned ?
Conclusions and actions from
the day…

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Changing selection pressures in the market access environment
require life sciences companies to adopt a range of responses
Shift Required Action
Value shift Understand multi-dimensional, customer-perceived value and
create context-specific value
Global shift Understand market heterogeneity and deliver broad value to
global segments
Holobiont shift Establish polycentric networks that aggregate capabilities and
manage risk
Systeomic shift Translate systems knowledge into an improvement in returns or a
reduction in risk
Information shift Adopt or adapt information technology to improve returns and
reduce risks
Trimorphic shift Focus strongly on NPD, SCM or CRM

4. How should the industry apply evolutionary theory to market access?
• The six shifts are happening simultaneously, presenting enormous challenges
to life sciences companies.
• Companies may be able to occupy more than one peak at a time, but they are
unlikely to be equally successful in all of them.
• The future of the life sciences industry is speciation and extinction.
• “Genetic engineering” is needed for market access excellence.
• The industry generally does an outstanding job of applying science to practice.
However, market access leaders need to be as willing as their scientific
colleagues to apply real, rigorous management science to developing market
access and pricing capabilities.
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5. Will the industry respond positively to pricing selection pressures?
• Launch sequencing to mitigate the impact of external reference pricing
still appears to be considered the “gold standard” for price
maximisation.
• This strategy does not lead to profit optimisation, successful customer
engagement or a sustainable business.
• Notwithstanding major selection pressure changes, new approaches are
conspicuous largely by their absence.
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6. The industry needs to address capability gaps in three critical areas
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Optimising the area under the curve
• Delays in access will reduce peak sales.
• Return mix optimisation is critical: target margin in some segments, volume in others.
Developing innovative contracting agreements
• In commoditised categories, tendering, competitive bidding and exclusive contracting are
becoming much more common.
• Contracting must include term sheets, not just pricing.
• The challenge is not to secure reimbursement through discounts, but to secure volume
commitments and drive usage.
Pursuing responsible and sustainable pricing
• Launch sequencing must be ethically responsible.
• The challenge of tiered pricing is not to set prices low enough to be affordable in low-income
countries, but to be willing to walk away from wealthy markets that refuse to make a fair
contribution to R&D costs.

7. Can the industry turn adversity into opportunity?
• Social, economic and
technological change will
transform the healthcare
environment in the coming
decades.
• Life sciences companies
collectively have an
opportunity to influence
the changing environment.
• Individual companies need
to take action to ensure
that they are organised
not just to survive—but to
thrive.
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8. Look out for the email with this executive briefing’s
presentations. Or become a participant at
www.pricingplatform.eu for access to the largest pricing
knowledge database in Europe.
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Thank you for attending the
EPP Life Sciences Executive Briefing
The Executive Briefing is made possible as a collaboration with

10. We look forward to seeing you at the
6th EPP Life Sciences Forum 2016 in
Montreux.
September 20-21 2016.
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