Pricing: Pharma's "Forgotten Element?"

Pricing is the forgotten element of the drug marketing mix, and nowrequires new strategic thinking, says a new study from Datamonitor, available through the Marketletter's offices.

Pricing has largely been ignored since the industry's early development, given that companies have thrived in a protected market where customers had very limited scope to shop around for better value, it says. But cost-containment measures have impacted directly on prices, and are modifying considerably the industry's relationship with its customer base.

Also, says Datamonitor, the correlation between costs and prices has been minimal. Rather, prices have depended largely on demand-side considerations and been set by the market's perception of products. But as customers become increasingly cost-conscious and company profits come under greater pressure, the industry will have to develop new strategies if it is to maintain past profitability levels.