Pricing in Healthcare An introduction to our credentials ... · Senior Research Consultant -...

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. 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


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


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


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’ 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


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):


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


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


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


Greg Thomas, M.Sc. Vice President, Pricing Research & Analytics

[email protected]

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)


Peter Winters, B.Sc., MRS Dip Senior Research Consultant - Healthcare

[email protected]

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.)


• Qualitative

• Quantitative

• Analytics

• Triangulation and meta data

analysis

Industry Expertise

• Pharmaceuticals

• OTC

• Medical devices

• Medical technologies

Languages



Ben Brazier, M.Eng Senior Consultant, Pricing Solutions UK

[email protected]

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


• 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



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


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

“


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


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


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


Segmentation analysis

Price Perception IMPACT TM

Price awareness

Price expectations

Price fairness and thresholds

Price importance

Revenue impact

Price sensitivity meter

Monadic tests


Pricing

INTELLIGENCE TM Dashboard


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


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


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


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


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


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

http://www.pricingsolutions.com/index.php/en/publications/pricing-solutions-pricing-reseachers/140-pricing-value-research-in-healthcare

http://www.pricingsolutions.com/images/pdf/pharmaresearch2011v2.pdf

http://www.pricingsolutions.com/images/pdf/Pricing Research for the Changing Pharma Sector.pdf

http://www.pricingsolutions.com/images/pdf/Canadians more active in healthcare_ Pricing Solutions Feb 19 2013.pdf


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

mailto:[email protected]

http://ca.linkedin.com/pub/greg-thomas/7/869/989

http://www.pricingsolutions.com/

https://twitter.com/Pricing_Experts

mailto:[email protected]

http://uk.linkedin.com/pub/tony-hodgson/1/2bb/326

http://www.pricingsolutions.com/

https://twitter.com/PricingUk

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