PHARMACEUTICAL STRATEGIC PRICING- AN ANALYSIS OF GLOBAL CROSS-SKU PRICING APPROACHES
Author(s)
Sogokon P1, Bustamante MM2, Park S2, Bastian A3
1fromerly CBPartners, London, UK, 2CBPartners, New York, NY, USA, 3INCYTE CORPORATION, Wilmington, DE, USA
OBJECTIVES: To evaluate the pricing approach of all oncology products that have received FDA and EMA approval between 2011-2016 to understand the existence of flat, curvilinear, and linear pricing in the USA, EU5 (Germany, France, Italy, Spain, Great Britain), Canada, Australia, and Japan. METHODS: Oncology drugs approved by the FDA and EMA between 12/01/2011 and 12/01/2016 were obtained from the official regulatory websites. Topical and transdermal preparations were excluded from the analysis. The ex-manufacturer prices for individual SKUs of each of these drugs were sourced from the IHS PharmaOnline International database. Pricing linearity was assessed by two methods. (1) B. Jönsson methodology which analyzed the highest and lowest SKU prices, strengths and prices/milligram. This method, however, was found to have deficiencies in recognition of curvilinear pricing strategies, therefore, a novel (2) CBPartners methodology was devised to analyze the price of all available SKUs, apply strict category definitions of “flat”, “linear”, and “curvilinear” pricing and utilize a process of elimination to ensure accurate categorization. RESULTS: Between 12/01/2011 and 12/01/2016 84 oncology products received FDA or EMA licenses. Of these, 70 products (83%) qualified for further analysis as per exclusion criteria. A total of 39 (56%) oral and 31 (44%) injectable drugs remained for analysis. Of the injectable products, only one product exhibited flat pricing and none had curvilinear pricing, resulting in linear pricing being almost exclusively employed. Oral products presented much more variance. Flat pricing was used in at least one market by 16 products, linear by 14 and curvilinear by 5. CONCLUSIONS: There is a clear difference in how different SKUs of oral and IV oncology products are priced, with IV products almost always pursuing a linear pricing strategy and orals varying between flat and linear pricing. Pricing trends demonstrate the existence of region-specific strategies employed and devised by manufacturers.
Conference/Value in Health Info
2017-05, ISPOR 2017, Boston, MA, USA
Value in Health, Vol. 20, No. 5 (May 2017)
Code
PRM55
Topic
Real World Data & Information Systems
Topic Subcategory
Reproducibility & Replicability
Disease
Oncology