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How Pricing Can Be Vital to a Drugmaker’s Profitability | The Motley Fool

Game-changing efficacy and safety will undeniably allow any drugmaker to dominate an indication, but when drugs match up nicely to each other, price can be the key differentiator.

In this clip from The Motley Fool’s Industry Focus: Healthcare, host Kristine Harjes and Motley Fool contributor Todd Campbell discuss pricing strategies used by companies to rack up revenue for investors using the hepatitis C brawl between Gilead Sciences (NASDAQ: GILD) and AbbVie (NYSE: ABBV) as an example.

A full transcript follows the video.

This video was recorded on March 7, 2018.

Kristine Harjes: Our third factor of competition that we wanted to talk about today is price. This one is, I think, slightly less obvious than the others, and in particular it needs to be balanced with the other two, meaning efficacy and safety, because price alone isn’t going to cut it if you have a drug like, say, Sovaldi. Sovaldi was able to price itself very high compared to what was on the market because it knocked it out of the park on safety and efficacy. But, as it turns out, that wasn’t the end of the story. Eventually it did face competition from other hepatitis C drugs in this next generation wave of more safe and more effective drugs, based on price.

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How Pricing Can Be Vital to a Drugmaker’s Profitability — The Motley Fool.