Optimizing price for new competitor launches

A top-10 pharma company was launching a product within a new therapy class treating rheumatoid arthritis. The class represented a clinical improvement over current treatments on the market, so accurate value based pricing research was vital.

The client wanted to know whether it could increase revenue by pricing lower to gain access to earlier lines and pooled patients who have not yet progressed to advanced therapy.

In order to understand how optimizing price could increase revenue, the client also wanted to know what was driving value for its product versus the competition.


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Objective 1:

Set optimal pricing strategy and get demand estimates

Key customer insights required

Understanding the market potential, including the following:

  • Optimal price recommendations.
  • Final market share forecasts.
  • Forecasts of brand uptake rates.

Challenges

There were some key uncertainties surrounding the product launch environment that could change the product’s prospects:

  • Whether the product would launch first within the new class, or a rival product would launch before it. This would affect optimal pricing strategy (depending on the competitor’s price) and market share.
  • Biosimilars of the standard-of-care treatment were launching, affecting treatment prices in the therapy area and the product’s pricing prospects. The future price of biosimilars at the product’s launch was unknown.

Objective 2:

Set optimal product positioning strategy

Background

The client wanted to know whether it could increase revenue by pricing lower to gain access to earlier lines and pooled patients who have not yet progressed to advanced therapy.

The client also wanted to know what was driving value for its product versus the competition.

Key customer insights required

  • Understanding pricing prospects and potential demand across each treatment line.
  • Understanding product attribute contribution to product value for the rheumatoid arthritis market.

Challenges

  • The product’s label was not yet finalised (e.g. severe patients only or moderate and severe patients; combination only or mono and combination).
  • Price-demand curves and market share estimates had to be estimated across the different possible labels, as well as across the different lines; a level of segmentation that traditional conjoint struggles with.
  • The exact product profile was not yet finalised so it was necessary that price-demand curves and market share estimates were able to be adjusted to account for changes after the research phase was complete.
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