Pricing Assessment and Strategy

Case Study

Challenge:

  • A biopharma company acquired a product that had enjoyed extremely favorable market share and payer access, but which was arguably launched at too low a price, and likely faced more intense competition in the 2-3 year time horizon
  • Putnam was asked to develop a pricing strategy that would better capture product value, and boost revenue while preserving market share

Putnam Approach:

  • Carried out extensive quantitative consultations with payers to test product coverage under varying future pricing and competitive scenarios
  • Analyzed contracting arrangements within category and performed share shift analysis to establish pricing and contracting thresholds
  • Conducted primary physician and patient research to gauge responses to potential formulary changes
  • Forecasted expected product coverage under discrete scenarios taking anticipated competitive responses into account

Impact:

  • Final recommendations were well received by the brand team and served as the blueprint for the frequency, size and timing of price increases
  • The client executed on the tactical plan by increasing prices by a greater number than it would have done previously
  • Putnam’s strategy facilitated increase in revenue for the product while maintaining market share

Strategy for the Life Sciences