OnDemand WTP Pricing Research

Pricing to Value – Gilead Shows the Way | Strategic Pricing Solutions

In late 2013, Gilead Sciences released Sovaldi, a drug that can cure Hepatitis C in 90 days when used in combination with other anti-viral drugs.  The initial price was more than $1,000 per day, and the total cost of treatment could exceed $80,000.  In spite of a 90% cure rate for a disease that previously had low cure rates with longer treatments, many editorials, blogs, and TV segments castigated Gilead and other biotech and pharmaceutical companies as price-gouging profit mongers.   Antitrust suit accuses Sovaldi maker Gilead of price-gouging and Gilead is accused of Price Gouging but is There Really a Legal Argument?

Recently a study by a panel of doctors and medical experts who help insurers set policies has determined that the drugs are worth the price – Gilead Pills at $1,000 a Day Are Found Cost Effective.  In other words, the patients and insurers get more value from the drugs than they pay for them.  Sovaldi is one of the highest selling drugs in the world after just one year.  In addition, insurers are expanding the range of patients who can be treated with Sovaldi, further demonstrating that value pricing works.

When customers, insurers and other constituencies complain about your prices and make derogatory statements about your company, it can be unsettling.  Nobody really wants to be called names or have their character questioned.  Those things also raise fears that sales will be lost and prospective customers will satisfy their needs elsewhere.  However, companies that truly engage in value pricing, will have thoroughly quantified how their product adds economic value to each segment of customers and prospects.  Those companies will have confidence their prices are appropriate and customers will pay for the value.

Read complete article here:

Pricing to Value – Gilead Shows the Way.

Post a Comment

WP-SpamFree by Pole Position Marketing