IRP launch analysis report

A top-10 pharma company was launching a new medical device and wanted to understand the impact of international reference pricing on its product’s list price development. An IRP launch analysis report communicated a recommended launch strategy to optimize pricing prospects.


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Objective 1:

Investigate the impact of IRP on the list price development

The vast majority of European countries, and many other countries around the world conduct IRP. More than 40% of countries with IRP implemented as price setting mechanism extend IRP to medical devices.
The client wanted to include 35 countries, worldwide, with a strong focus on the European market. The client also needed to validate the requested launch pricing feasibility based on IRP rules.

Key customer insights required

  • Impact of IRP on list prices in all countries.
  • Feasibility of requested launch prices.

Challenges

Modelling over 1100 referencing interactions with more than 20 different types of referencing methodologies in the research countries required a model with referencing algorithms for all known referencing effects. Evaluating the feasibility of request prices required a simulator that could test many different product packaging sizes.

Objective 2:

Optimize launch sequence to maximize revenues

The client had a launch sequence strategy in place, which did not take into account impact of international reference pricing.

International reference pricing can impact prices at launch as well as post launch, therefore the rules needed to be incorporated into the analysis.
The client also wished to investigate whether there is an alternative launch strategy which would improve overall revenues.

Key customer insights required

  • Which countries should be launched first.
  • In which countries the launch should be delayed.
  • Whether not launching in a country would be beneficial.

Challenges

Manually testing impacts of different launch sequence strategies is slow and impractical as it needs to take into account prices, international reference pricing rules and volumes for a large number of countries.

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