TO GET THE RIGHT PRICE – A DECISION SUPPORT METHOD TO OPTIMIZE MANAGERIAL DECISIONS ON PUBLIC FUNDING PRICE TO APPLY FOR

Author(s)

Wilk NM1, Kloc K21Arcana Institute, Krakow, Malopolskie, Poland, 2Arcana Institute, Krakow, malopolskie, Poland

OBJECTIVES: In challenging economic times public funding decision makers are getting tougher, so the managers have to be smarter to choose the right price and optimally justify it. The objective is to present our method which rationally supports managerial decisions on pricing in public funding. METHODS: The decision support method consists of the following steps: 1) identify all arguments relevant to different price levels – e.g. based on prices of similar drugs that were accepted by public payer or related to prices of the drug in other countries; 2) calculate maximum price that may be justified with each piece of an argument; 3) sort arguments in price ascending order; 4) rank arguments in a pairwise manner against their impact on probability of public funding acceptance using 5-point Likert scale; 5) plot all arguments on a graph with price level on X axis and cumulative impact on probability of acceptance on Y axis; and 6) calculate first derivative to identify local maxima. The seventh step is the manager’s decision on choosing the right price from the subset of local maxima. Local maxima represent the price levels for which a relatively large increase in price associates with a relatively small decrease in acceptance for public funding. RESULTS: The decision support analysis results in a subset of price levels that the manager is recommended to choose the right price from. The final choice may depend on acceptance/avoidance of risk or necessity to achieve a specific turnover. All arguments that justify the chosen and higher prices may be used to justify this price to public funding decision makers. CONCLUSIONS: To ensure a pricing success to their companies and their own career development Market Access managers should use the presented decision support method to make possibly best informed choices concerning official prices of their drugs.

Conference/Value in Health Info

2011-11, ISPOR Europe 2011, Madrid, Spain

Value in Health, Vol. 14, No. 7 (November 2011)

Code

PRM10

Topic

Economic Evaluation

Topic Subcategory

Cost/Cost of Illness/Resource Use Studies

Disease

Multiple Diseases

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