How do you monitor and manage the risks of price erosion and reference pricing in global markets?

1 Track and analyze price trends

To monitor the risk of price erosion and reference pricing, you need to have a clear and updated picture of the price trends of your product and its competitors across different markets and segments. You can use various sources of data, such as public databases, industry reports, market research, or third-party vendors, to collect and analyze the relevant price information. You should also consider the factors that influence the price levels and changes, such as the product life cycle, the market access landscape, the payer preferences, and the competitive dynamics.

2 Define and implement pricing strategies

To manage the risk of price erosion and reference pricing, you need to define and implement pricing strategies that align with your product value proposition, your market access objectives, and your stakeholder expectations. You can use different pricing approaches, such as value-based pricing, differential pricing, or outcome-based pricing, to reflect the value of your product in different markets and segments. You should also consider the potential impact of your pricing decisions on other markets and segments, and use tools such as price corridors, price bands, or confidential discounts, to mitigate the spillover effects of reference pricing.

3 Negotiate and contract effectively

To protect and enhance the value of your product in global markets, you need to negotiate and contract effectively with payers and other stakeholders. You can use various negotiation techniques, such as anchoring, framing, or bundling, to communicate the value of your product and justify your price expectations. You should also consider the trade-offs and incentives that can influence the negotiation outcomes, such as volume discounts, rebates, risk-sharing agreements, or market expansion clauses. You should also monitor and evaluate the performance and compliance of your contracts, and adjust them as needed.

4 Innovate and differentiate your product

To sustain and increase the value of your product in global markets, you need to innovate and differentiate your product from its competitors. You can use various innovation strategies, such as developing new indications, formulations, or combinations, to extend the product life cycle and create additional value for patients and payers. You should also consider the evidence and communication requirements that can support your innovation claims, such as clinical trials, real-world data, or health economic models. You should also leverage your product differentiation to justify your price premium and avoid commoditization.

5 Collaborate and coordinate with stakeholders

To optimize the value of your product in global markets, you need to collaborate and coordinate with internal and external stakeholders who are involved or affected by your pricing and contracting decisions. You can use various collaboration and coordination mechanisms, such as cross-functional teams, regional networks, or stakeholder engagement platforms, to share information, align objectives, and harmonize actions. You should also consider the perspectives and interests of different stakeholders, such as global, regional, or local teams, payers, providers, or patients, and seek win-win solutions.

6 Learn and adapt to changing environments

To anticipate and respond to the challenges and opportunities of price erosion and reference pricing in global markets, you need to learn and adapt to changing environments. You can use various learning and adaptation methods, such as market intelligence, scenario planning, or feedback loops, to monitor and evaluate the market trends, the policy changes, and the stakeholder behaviors. You should also consider the implications and risks of these changes for your product value and strategy, and adjust them accordingly.