OnDemand WTP Pricing Research

Pay what you want – a product pricing experiment | London Business School

Pay what you want for blood tests

“I had read an article about new types of pricing models and how they might influence companies, especially in the digital world,” explains Roche’s Jan Schreiber. And around the same time, I had a discussion with a colleague about a diagnostic product they wanted to launch in Germany, where they were worried about how to price it. So when I talked to my team members, we had this crazy idea – why not test a pay-what-you-want model in a diagnostic setting?”

The diagnostic product in question was a point-of-care blood test for two issues related to the body’s cardiovascular system: lipid levels and average glucose levels (HbA1c) for a three-month period. In Germany, these tests traditionally involved the GP taking blood from a vein and sending it off to a lab for testing. Now, using a new device to prick the patient’s finger, a blood sample is taken and the results are ready 15 minutes later.

While it’s a neat innovation, getting doctors to adopt it has been difficult – not least because of the limited financial incentives. Health insurance covered the costs of lab tests, but small devices like these received small reimbursements. “The GP industry in Germany wasn’t interested, so we planned to target pharmacies and the growing market of people looking after their own health with an innovative pricing concept,” explains Schreiber.

Roche’s team identified 10 suitable pharmacies in Germany and appointed two sales reps to train the pharmacists in how to use the new device for blood tests. Letting people know they could choose what to pay for the test was fine. But the pharmacists were asked never to describe the test as a free service.

Read complete article here:

Pay what you want – a product pricing experiment | London Business School.

Post a Comment

WP-SpamFree by Pole Position Marketing