Pricing Study for New Diabetes Product

A major pharmaceutical company with a new diabetes product retained Analysis Group to develop a launch pricing and contracting strategy by estimating the share and utilization of the product under different pricing and market assumptions. Since the new drug would be the fourth entrant in the market, the project involved demonstrating the pricing approach that would be most effective for a product with limited clinical differentiation relative to other drugs in the category. The Analysis Group team, including Vice President Anjali Oza, developed a pricing and contracting model to simulate the competitive landscape of a new entrant in a relatively crowded market for diabetes drugs. The team conducted qualitative and quantitative market research with payers to determine the impact of product attributes and price on formulary access and possible restrictions. The team also conducted quantitative research, including conjoint analysis, with physicians to identify the impact on clinician therapy decisions in the context of formulary access and restrictions. The research supplied the inputs of a pricing analysis model designed to take into account competitive dynamics related to potential market entrants, demand for the product across different patient profiles, and the impact of reimbursement on prescribing the new product to patients. As a result, the client took into consideration Analysis Group's recommendations in formulating its global strategy for product launch.

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