Using Sensitivity Analysis to Drive Pricing Strategy

Analysis Group was asked by a major pharmaceuticals manufacturer to develop the launch pricing and payer contracting strategy for a new oral allergy medication in the U.S. and EU. This involved an extensive program of research with payers (managed care pharmacy directors at large national plans/insurers), physicians (GPs and specialists), and patients. Combining primary market research data with secondary plan-level information such as market share and formulary management, we developed a segmentation of payers reflecting the different price sensitivity and associated formulary management policies of high-control plans, low-control plans, and PBMs. Applying this segmentation, we modeled access and utilization under different market scenarios. Finally, we recommended an optimal pricing and managed markets strategy based on an integrated access-utilization model and sensitivity analysis.