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Our Healthcare Pricing Credentials Pricing in Healthcare An introduction to our credentials and market context for global
healthcare pricing
December 2014
pricingsolutions.com
© Pricing Solutions Ltd. 2014 2 © Pricing Solutions Ltd. 2014
Offering full range of international pricing services
2 divisions: Pricing Research & Analytics and Strategy & Management
Our credentials in healthcare
Part I
Pricing Solutions Ltd.
An international consulting firm
specializing in pricing
Global product development planning
Product launch in international markets
Addressing pricing and market access challenges
Part II
Pricing Experience in
Healthcare
Capabilities Overview:
© Pricing Solutions Ltd. 2014 3 © Pricing Solutions Ltd. 2014
Pricing Solutions Ltd. is an international consulting firm specializing in pricing. Since our
inception in 1993, we have built our business by developing long-term relationships with
clients across industries and markets:
Proven superior record of attaining measurable results; Over 700 projects
completed
Senior pricing team with an implementation focus
Strategic orientation; We talk business, not numbers in a vacuum
“ Pricing is the moment of truth - all of marketing comes to focus in the pricing decision.”
- Raymond Corey
Harvard Business School
Pricing Solutions Ltd. Part I: Introduction to Our Firm
© Pricing Solutions Ltd. 2014 4 © Pricing Solutions Ltd. 2014
Our Mission
To dramatically improve our customers’ profitability by helping them achieve a World
Class level of pricing competency.
To accomplish our Mission:
We Are We Utilize We Do
Unique 360º
Capabilities
Change Management
Multi-Sector
Experienced
Worldwide & Multi-
Cultural
World Class
Methodologies Capabilities Transfer
Partner Relationship 10:1 ROI
Experts in
Pricing
50 Senior
Members
Implementation Focus
Participative
Approach
*At Pricing Solutions, Our Mission includes helping clients achieve a strong
return on their investment – typically 10:1
Our Mission Part I: Introduction to Our Firm
© Pricing Solutions Ltd. 2014 5 © Pricing Solutions Ltd. 2014
Strategy &
Management
Research &
Analytics
People & Organization
Systems & Tools
Pricing Function Set-Up, Global & Local Organizational Structure
New Product Strategy, Market Dynamics & Competitive Intelligence
Pricing Issue Resolution – Price Setting, Offer Structure, SKU Mgt
Systems & Tools
Development, Business
Intelligence
Pricing Governance &
Steering Committee,
Dashboard & Scorecard
Pricing Research for
Elasticity Modeling &
Optimization
Pricing Capabilities
Assessment and
Development
Systems Readiness
Projects, Building Internal
IS Capabilities
Job Description, Performance Evaluations
Pricing Transactional Analytics, Potential – ROI Measurement
Strategic Issue Resolution – New Product Pricing, Channel Mgt, Segmentation
Pricing Systems Assessment, RFI/RFP & Contract Management
Training & Coaching, Customized & Standard Modules
Cost to Serve, Products & Services Bundling, Trade Terms Optimization
Tool Development for Transactional and Value Pricing
Systems Program Management & Implementation Support
Results - Increase Revenues and Margins
3600 Expertise Part I: Introduction to Our Firm
© Pricing Solutions Ltd. 2014 6 © Pricing Solutions Ltd. 2014
Wold Class Pricing
ROS +2%-3%
ROS +1%-2%
ROS +1%-2%
ROS <1%
The Roadmap to World
Class Pricing
Pricing Solutions’ 5 Levels
was developed over 20
years of experience and
700+ projects. Today, the
framework is used by all
our clients.
In 2013, we published
World Class Pricing: The
Journey
Our Unique World Class PricingTM Approach Part I: Introduction to Our Firm
© Pricing Solutions Ltd. 2014 7 © Pricing Solutions Ltd. 2014
Pricing Solutions’ delivers an ROI on pricing projects
ranging from 10:1 to 20:1 across industries / markets.
Given the complexity of pricing research, our single
focus and core competency is pricing strategy
development.
Pricing Research
New Product Concept
Customer Satisfaction
U & A
Co
mp
lex
ity
Average time spent on pricing research &
pricing strategy development
Traditional MR Firms Pricing Solutions Ltd.
Delivering a High Return on your Research Investment Part I: Introduction to Our Firm
© Pricing Solutions Ltd. 2014 8 © Pricing Solutions Ltd. 2014
Strong Experience in Healthcare Part I: Introduction to Our Firm
Developing long-term partnerships with many leading organizations in Healthcare,
Pharmaceuticals and Medical Devices.
Select Client Examples (1 of 2):
© Pricing Solutions Ltd. 2014 9 © Pricing Solutions Ltd. 2014
We also believe in the cross-fertilization of pricing best practices across industries. For 20+ years Pricing Solutions has conducted projects and built relationships with leading organizations, helping them achieve World Class Pricing success.
Select Client Examples (2 of 2):
B2B
B2B2B
B2C
B2B2C
Experience Across B2B and B2C Markets Part I: Introduction to Our Firm
© Pricing Solutions Ltd. 2014 10 © Pricing Solutions Ltd. 2014
We provide local project service and management
Multicultural, multi-language team understands different
market, cultures and customers
Global network of trusted healthcare fieldwork agencies
Long-term working relations with executive partners in
healthcare, providing added-value services in markets
around the world
Paul Hunt
President,
Global
Greg Thomas
Vice President
Research &
Analytics
Kirk Jackisch
Vice President
Strategy &
Management
Tony Hodgson
Managing
Director, UK
Dominic James
Principal
Consultant, APAC
Ramon Ricoy
Managing
Director, LATAM
Fernando
Ventureira
Vice President,
Europe
Global Leadership Team
Global Network of Offices Part I: Introduction to Our Firm
© Pricing Solutions Ltd. 2014 11 © Pricing Solutions Ltd. 2014
Paul Hunt, MBA, President, 25+ years research & pricing experience
As a pricing strategist, Paul has developed a vast array of proprietary methodologies that go straight to the heart of
the problem. He has helped clients with such pricing issues as: bundling/ unbundling, competitive pricing, customer
categorization, new product pricing, perceived value, price complexity vs simplification, pricing policy, price
structure, price wars, price/volume relationship, and value-added pricing.
Paul has a particular interest in helping pharmaceutical companies implement the cultural changes necessary for
them to become more effective value-based pricers.
Greg Thomas, M.Sc., Vice President Research & Analytics, 15+ years research & pricing experience
Greg leads the pricing research practice at Pricing Solutions. In that capacity, he leads pricing research projects
from start to finish. Greg has worked with leading organizations in pharmaceuticals, medical devices, OTC, software,
medical and financial services.
The typical payback on a pricing research project is at least 10:1. Greg consistently achieves these types of return
by bringing a unique blend of experience in research, pricing, economics, sales and finance to bear on clients’
pricing problems.
Peter Winters, B.Sc., MRS Dip, Senior Research Consultant – Healthcare, 20+ years
Peter has extensive research experience, working in many pharmaceutical therapy areas right across the product
lifecycle. Peter’s recent pricing & market access experience includes projects supporting orphan drugs (both in the
US and Canada); in primary and specialist markets and OTC; and with hospital products and hospital information
systems. Peter has in-depth understanding of the payer environment in North America, particularly in Canada.
Projects typically involve conducting both qualitative and quantitative phases with groups such as payers,
pharmacists, KOLs and HCPs. Peter is a strong proponent of triangulation; comparing evidence from different
research sources to understand their real meaning and their significance to pricing decisions.
Healthcare Experience
Ben Brazier, Senior Consultant, 8+ years
Ben project manages and consults on projects that develop innovative pricing strategies for clients and optimise
their profits and market share. Ben has carried out launch pricing research with 6 of the world’s 10 largest
pharmaceutical companies. He has worked on P&MA strategy for numerous orphan products focusing on the US
and EU5. Ben is particularly knowledgeable about the payer environment in the UK. Ben is a member of the
Professional Pricing Society, and keeps up to date with the latest techniques and developments in the pricing,
marketing & strategy consulting industry.
Part I: Introduction to Our Firm
© Pricing Solutions Ltd. 2014 12 © Pricing Solutions Ltd. 2014
Greg Thomas, M.Sc. Vice President, Pricing Research & Analytics
Greg has 15+ years of Pricing & Value Research and Analytics experience, including:
Pricing Analytics & Modeling:
• Extensive experience developing pricing strategy insights from market research & analytics
• Extensive experience developing innovative pricing research methodologies & predictive simulation models & dashboards
• Firm believer in the importance of these research methodologies, analytics and models in understanding customers’ willingness to adopt,
and their tradeoffs between value and price
Pricing Research:
• Committed to helping companies successfully implement pricing strategy insights
• Experienced at understanding client needs and translating them into a research program & study design
Greg’s experience in pharmaceuticals, medical devices, OTC and medical & financial services includes helping clients achieve a typical
payback of at least 10:1 on their pricing research project
Greg has also spearheaded hundreds of client projects in food service, consumer goods, manufacturing, high tech, professional services
and software, applying his unique blend of research, pricing, economics, sales and finance experience to client’s pricing challenges
He is an active member of the Professional Pricing Society, Market Research & Intelligence Association and ESOMAR World Research
Previous roles included Director of Sales & Marketing, responsible for revenue management and pricing
Education
• M.Sc Econ
University of Guelph
Functional Experience
• Pricing Research
• Pricing Analytics
• Market Research
• Behavioral Economics
Industry Expertise
• Healthcare, Pharma & Medical Technology
• B2B & B2C
• Food Services & Restaurants
• Professional Services & Software
• Consumer Goods & Beverages
• Technology & Manufacturing
Languages
• English (Fluent)
© Pricing Solutions Ltd. 2014 13 © Pricing Solutions Ltd. 2014
Peter Winters, B.Sc., MRS Dip Senior Research Consultant - Healthcare
Peter has 20+ years of Healthcare and Pricing Research experience:
Healthcare Research:
• Foremost, Peter’s experience is in healthcare research. Based initially in the UK and more recently from Canada, he has led hundreds of
healthcare projects. Peter has a global network of research contacts to co-ordinate studies in both developed and developing markets.
• Peter has experience of a wide range of qualitative and quantitative methodologies with a diverse range of healthcare target audiences;
such as clinicians (KOLs, specialists, nurses, pharmacists), patients and payers. His primary experience has been in ethical
pharmaceuticals and has worked in many therapy areas. He also has worked with OTC products and medical devices / technologies.
• Peter has strong ‘hands-on’ expertise with SPSS and a passion for data analytics. Peter is a strong proponent of triangulation; comparing
evidence from different research sources to understand their real meaning and their significance to pricing decisions.
Pricing Research:
• Peter’s recent pricing & market access experience includes projects supporting orphan drugs (both in the US and Canada); in primary
and specialist markets and OTC; and with hospital products and hospital information systems. Peter has in-depth understanding of the
payer environment in North America, particularly in Canada.
• Peter has a long term perspective of how drug pricing has evolved, and continues to evolve, in line with changing pharma business
models and payer landscapes. Peter presented at the 2013 Canadian Institute Drug Pricing conference, using case study material to
show how drug pricing has evolved over time, and the importance of getting the pricing right to stimulate drug innovation.
Is a member of the following professional bodies - EphMRA, the Market Research Society, ISPOR and ESOMAR
Education
• B.Sc, St. Andrews
University, Scotland
• Market Research
Diploma (MRS Dip.)
Functional Experience
• Qualitative
• Quantitative
• Analytics
• Triangulation and meta data
analysis
Industry Expertise
• Pharmaceuticals
• OTC
• Medical devices
• Medical technologies
Languages
• English (Fluent)
© Pricing Solutions Ltd. 2014 14 © Pricing Solutions Ltd. 2014
Ben Brazier, M.Eng Senior Consultant, Pricing Solutions UK
Ben has launch pricing experience with 6 out of world’s 10 largest pharmaceutical companies:
UK Pricing & Market Access Expert:
• In depth knowledge of the UK commissioning processes, which have changed significantly since the April 2013 reforms
• Experience of pricing drugs that will be reviewed by NICE, NHS England CRGs (clinical reference groups) and CCGs
• Recommended prices for a number of innovative oncology products that were funded through the Cancer Drugs Fund
Healthcare Launch Pricing Research:
• Extensive experience in conducting in-depth qualitative interviews with payers, pharmacists, physicians, nurses and patients
• Extensive experience in designing and fielding quantitative surveys to capture behavioral insights using techniques such as Van
Westendorp, Gabor Grainger and/or conjoint analysis
• Experience of managing research projects covering the major EU5 markets (France, Germany, Italy, Spain, UK), the US & Japan with a
high level understanding of their commissioning challenges
Active member of the Professional Pricing Society
Has a strong implementation focus, helping a number of clients to develop improved price management processes & capabilities
Brings industry experience of working for Babcock International Group before moving into consulting
Education
• M.Eng Mechanical
Engineering
University of
Nottingham, UK
Functional Experience
• Pricing Research & Analytics
• Pricing Strategy
• Price Management
• Customer Segmentation
• Pricing Software & Tools
Industry Expertise
• Technology & Manufacturing
• Healthcare, Pharma & Medical Technology
• B2B & B2C
• Professional Services & Software
Languages
• English (Fluent)
© Pricing Solutions Ltd. 2014 15 © Pricing Solutions Ltd. 2014
2013 INFORMS Revenue Management & Pricing Practice Award Winner
‘Practice Award’ recognizes the outstanding application of revenue and pricing
management techniques
Pricing Solutions , MolsonCoors Canada and Queen’s School of Business
selected for developing Price & Promotional Planning Model TM.
Model currently in use by MolsonCoors; Canada & UK. Further international
expansion is planned
Pricing Solutions joins previous award winners Hewlett Packard (2012) and
Marriott International (2010)
2013 Nominated for MRIA Excellence in Research Award for ‘Best Multinational
Project’
Nominated by our client for work in new product pricing in the healthcare
technology sector across 6 key markets: USA, UK, France, Germany, Japan,
Saudi Arabia
Client team won an internal award for Best Collaboration: across multiple
business units and with research & consultant partners
Recent Awards & Nominations
Pricing Management
Pricing Research
Part I: Introduction to Our Firm
Pricing Solutions is an active member of several professional associations, including:
Our Healthcare Pricing Credentials Pricing Experience in Healthcare Part II
© Pricing Solutions Ltd. 2014 17 © Pricing Solutions Ltd. 2014
Understanding the Subtleties of Pricing in Pharmaceuticals Part II: Pricing in Healthcare
Doctor treatment protocols
Patient journeys
Payer decision-making
Understanding the decision-
making process
We have experience
recruiting, interviewing and
surveying all KOLs
• GPs, GPOs, Advocacy
Groups, Bio-med
• Nurses, Hospital management
& administrators, Specialists,
Pharmacists, Physicians, Technologists
• Managers, Payers, Patients on co-pay
• Travel Clinics
• National/Regional/Local commissioners
& insurance companies
Essential to consider specifics of
each pricing project
• Molecule or biotech
• Patients’ quality of life
• High or moderate cost
• Patient segmentations
• Primary or secondary care
• Acute or chronic treatment
• OTC or prescription
• Collaborative payer opportunities
• Health economic arguments
• Superior value delivery
• Higher success rates
• Reduced side-effect profile
• Other measureable benefit
I was very impressed with the work Pricing Solutions did on
our brand, and appreciated the insights & additional perspective aimed to
enhance our commercial success. It does underscore
an important role of the HCPs in shaping our customers/
patients purchasing decisions /choices.”
- Senior Customer Director, Fortune 500 Pharma, 2013
“
© Pricing Solutions Ltd. 2014 18 © Pricing Solutions Ltd. 2014
Not all methods are equal in Healthcare. In pricing research especially, methodologies are
Good some of the time, others are Bad at times, and some are Ugly all the time:
THE GOOD
Discrete Choice/Tradeoff
Analysis
Multivariate Regression
Analysis
In-Market Tests
Price Value Measurement
Monadic Testing
Defection Analysis
(Won/Lost Analysis)
Financial Value
Measurement
THE UGLY
x Direct Questioning
x Brand Price Tradeoff
Analysis (BPTO)
THE BAD
Van Westendorp
(Price Sensitivity Meter)
Price Laddering
Full Profile Conjoint
Analysis (rating & sorting)
Methods of Collecting Pricing Research Data
The Good, the Bad and the Ugly Part II: Pricing in Healthcare
© Pricing Solutions Ltd. 2014 19 © Pricing Solutions Ltd. 2014
Qualitative Includes Pricing Solutions’ Price + Value INSIGHTSTM. This method is
designed to assess the customer’s:
• Perception of value relative to price
• Reaction to alternative prices
• Perception of key value drivers
• Value & feature importance
Includes: In-depth interview, online focus groups, in-person focus groups,
bulletin board discussions, online surveys & virtual rooms
Employing a Full Range of Methodologies for Healthcare Pricing Research Part II: Pricing in Healthcare
Quantitative Includes Pricing Solutions’ Price + Value OPTIMIZERTM method. This survey
method is designed to assess a product’s:
• Market penetration + profit potential
• Optimal launch price
• Price sensitivity by KOL
• Assess how different product configurations impact demand
• Test what product features deliver the most value to HCPs
Includes: Advanced analytics, cluster analysis, discrete-choice,
experimental design, low-incidence samples & monadic tests
© Pricing Solutions Ltd. 2014 20 © Pricing Solutions Ltd. 2014
Helping You Develop Pricing INTELLIGENCETM
Part II: Pricing in Healthcare
Our methods and tools are customized to address our clients’ specific needs:
Price + Value INSIGHT TM
Price vs. product attribute importance
Key value drivers
Competitive positioning
Focus groups
IDIs
PVM research
Price + Value OPTIMIZER TM
Price elasticity
Sales and financial forecasts
Competitive dynamics
Attribute importance
Conjoint methodologies
Segmentation analysis
TURF analysis
Monadic tests
Power + Decision INFLUENCE TM
Identify decision makers
Price sensitivity by segment
Segmented sales and financial forecasts
Purchase decision insight questions
Conjoint methodologies
Segmentation analysis
Price Perception IMPACT TM
Price awareness
Price expectations
Price fairness and thresholds
Price importance
Revenue impact
Price sensitivity meter
Monadic tests
Conjoint methodologies
Pricing
INTELLIGENCE TM Dashboard
© Pricing Solutions Ltd. 2014 21 © Pricing Solutions Ltd. 2014
Discrete Choice Trade-off Analysis Part II: Pricing in Healthcare
Adaptive Choice Based Conjoint To test many product attributes, identify the optimal product
configuration/offer
Choice Based Conjoint Estimate price sensitivity of different products, test 3-5
product attributes
Menu Based Conjoint Test bundle vs. a la carte offers, add-on features
© Pricing Solutions Ltd. 2014 22 © Pricing Solutions Ltd. 2014
Illustrative Example
Medical Technology Example:
High price sensitivity for Medical Technology organization
A price of $1.2MM could lead to a drop in demand of 20%
A price of $750k could push the sales but erode revenue and profitability
Measuring Willingness-to-Pay & Price Sensitivity Part II: Pricing in Healthcare
© Pricing Solutions Ltd. 2014 23 © Pricing Solutions Ltd. 2014
Illustrative Example
Pharma / Biotech Example:
Scenario of new product gaining both private & public insurance coverage
Considering price sensitivity of target patients (with varying arrangements for co-pay)
Private + Public Coverage
31% 30%
27%
26% 22%
$1,322
$2,300
$2,988
$3,728 $4,021
$0.80 $1.20 $1.60 $2.10 $2.60
Price per day
Choice Share Revenue
Legend:
*Base: target patients, n=300
**Share of prescribing choice for indication
***Revenue in thousands of dollars
Measuring Choice Share & Revenue Part II: Pricing in Healthcare
© Pricing Solutions Ltd. 2014 24 © Pricing Solutions Ltd. 2014
Product Lifecycle
Stage Stage 1
Exploratory
Stage 2
Detailed
Planning
Stage 3
Market Entry
Stage 4
Maturity
Stage 5
End of Product
Life
Pharmaceutical
business model
Phase I-II
Pricing exploration to
assist in
understanding the
business potential of
different indications
and value
propositions
Phase III to
Launch For the defined TPP,
and evolving clinical
/ other data,
understand the likely
uptake amongst key
segments at various
price points, and
develop an optimal
pricing strategy
across countries
Market Access &
Reimbursement At a national,
regional and local
level, provide
compelling pricing +
value propositions to
various payer groups
in order to negotiate
‘the fourth hurdle’
most effectively
Post-Launch
Monitor pricing of
competitors, and
incentives to
distribution agents,
with an eye on the
competition and
prescribing
environment
Patent Expiry
Manage the pricing
at known patent
expiry date
compared to
generics or
biosimilars (SEBs);
particularly by
working with
established brand
equity
Alternative
healthcare
business model
(without fixed-
term patent
protection)
Scope Value
Proposition Understand the
basis of how the
healthcare product
creates value, and to
whom - in order to
make a ‘go’ / ‘no go’
decision regarding
development
Define Pricing
Proposition Develop a detailed
pricing plan based
on appropriate
pricing research and
pricing models with
an approach which
would ideally create
barriers to entry for
competitive products
Deploy Launch
Sequence Identify the relevant
consumers and
payer groups and
deploy a launch
sequence for market
entry
Market
Monitoring In an environment
without patent
protection; monitor
pricing pressures,
competitive threats
and relevant
technology
developments
Obsolesce &
Transition The end of product
life can be quite
unpredictable (if it
happens at all) and
pricing research can
help manage the
transition to the next
generation of
products
Pricing Research Through 5 Critical Stages of the Product Lifecycle Part II: Pricing in Healthcare
© Pricing Solutions Ltd. 2014 25 © Pricing Solutions Ltd. 2014
The business forecast, and
intended price strategy, can
evolve substantially over the course of
product development
A key challenge for global planning is the
need to update pricing and forecasts
following on from the initial TPP in light of
updated clinical information, and other data
(e.g. competitive pricing, payer requirements
etc.)
The pricing and value positioning of the
product need to be very closely aligned
Price + Value INSIGHTS in Global Planning for Pharma Part II: Pricing in Healthcare
“ To inform the final launch pricing of (our drug) in the US, we recently utilized and had a great deal of
success with the Pricing Solutions team. While their expertise spans multiple industries their healthcare
experience is impressive and they seemed to have a solid grasp of the nuances in US Orphan
markets. Interviews with payers and physicians were very well moderated, and their final deliverable
gave us a high degree of confidence in our decision around (our drug) pricing.”
- Senior Director, Fortune 500 Pharma, 2014
Stage Stage 1
Exploratory
Stage 2
Detailed
Planning
Pharmaceutical
business model
Phase I-II
Pricing exploration to
assist in
understanding the
business potential of
different indications
and value
propositions
Phase III to
Launch For the defined TPP,
and evolving clinical
/ other data,
understand the likely
uptake amongst key
segments at various
price points, and
develop an optimal
pricing strategy
across countries
© Pricing Solutions Ltd. 2014 26 © Pricing Solutions Ltd. 2014
Active in the Healthcare Industry: Publications and Resources Part II: Pricing in Healthcare
Download your copy: White papers, conference presentations & articles
White Papers: Canadian Healthcare Payers (2011)
Presentations: Canadian Institute ‘Drug Pricing’ conferences
Articles based on mix of desk research, primary research
and pharmaceutical client input
Building community of pharma pricing professionals
LinkedIn Pricing Solutions Club
In-person forums & training events
Members of Canadian Association of Healthcare
Reimbursement (CAHR)
International perspectives through attendance at …
EphMRA 2013 Conference, London
EVIDEM: Evidence and Value: Impact on Decision-Making,
Montreal
ISPOR 2014, Montreal
*Click image to download
Global Pricing &
Value Research in
Healthcare
Canadian
Healthcare Payers
Pricing Research for
the Changing
Pharma Sector
A more active role in
paying for
healthcare
© Pricing Solutions Ltd. 2014 27 © Pricing Solutions Ltd. 2014
Greg Thomas
Partner, Vice President Pricing Research & Analytics
Email: [email protected]
Telephone: +1 416 943 0505 Ext. 120
Web: pricingsolutions.com
Learn More:
Tony Hodgson
Managing Director, Pricing Solutions UK
Email: [email protected]
Telephone: +44 207 323 5059
Web: pricingsolutions.com