OBJECTIVES: To develop a quantitative model that can determine the effect of segmentation and positioning on revenue generation based on different variables, health economic considerations and pricing scenarios, creating a tool which is easy to use for the first evaluation of options. METHODS: Literature review and interviews with industry experts were conducted followed by the development of qualitative framework, logic and the subsequently a quantitative model. The model was tested and validated using real life examples. RESULTS: A qualitative model was developed which presents an iterative strategy to align stakeholders’ interest with different scenarios of segmentation. From a given asset base of active ingredients, the pharmaceutical company defines therapeutic areas for a component and determines segments within them, evaluating both attractiveness and specific propositions for patients, payers and prescribers in comprehensive scenarios. For the payer’s perspective in particular, health economic benefits of the proposed segmentation approach must be contemplated. Following this analysis, objectives and strategies for the chosen segments are developed and a holistic value proposition can be delivered to the market. Ideally, the process should be initiated early during development in order to design clinical trials according to the segmentation strategy. The process should also be monitored throughout the marketing and sales process in order to make improvements, and to react to changes in healthcare policies or the competitive landscape. Following the qualitative analysis, a quantitative model was developed in Excel that captures the effect of multiple variables such as age, gender, disease severity, co-morbidities, insurance type and multiple price points on revenue generation, positioning and pricing of pharmaceuticals. The model was tested and validated using the example of bipolar disorder (BPD) in women with childbearing potential. A new product with lower teratogenic risks was evaluated along different segmentation scenarios in order to determine improved overall cost-effectiveness when compared to conventional treatments. CONCLUSIONS: Segmentation is an important tool that could lead to better revenue generation from the company’s perspective and is accepted positively by payers due to optimized budget impact with better health outcomes.