Earlier Involvement of Drug Pricing Teams

June 28, 2011
Laura Mortkowitz

According to a recent study, more than half of drug companies are getting their pricing teams involved by Phase 2. And 15% are even involved during pre-clinical stage.

More than half of drug companies get their pricing teams involved by Phase 2 of drug development, according to a study by Cutting Edge Information released Tuesday.

The 57% of companies surveyed are involving the pricing department earlier so they can maximize the drug’s value and address reimbursement issues. The Pharmaceutical Pricing Strategy also reported that 15% of companies may involve their pricing department as early as the pre-clinical stage.

"Pricing work conducted in the early lifecycle can identify unique product benefits, helping to prioritize investments and guide clinical endpoints," Adam Bianchi, chief operating officer of CEI, said in a statement. "These decisions help to ensure the best possible return on investment."

The report also stated that 52% of companies are continuing to involve pricing throughout the drug’s second year on the market. However, early involvement is becoming more important because of a increased demand from payers for pharmacoeconomic and health outcomes data.

"The most effective teams initiate early discussions with payers to help ensure that the product meets both financial thresholds required by payers and clinical endpoints required by regulators," Bianchi said.

According to CEI, pricing's elevated role in the drug lifecycle reflects the growing importance of pricing strategy. In particular, pricing teams have to be aware of setting prices in multiple countries and maintain a sense of the floor and target prices.