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Emerging Trends in Pharmaceutical Marketing

Emerging Trends in Pharmaceutical Marketing. Pricing Strategy Workshop. Some History…. The ODB froze the 1993/94 formulary prices Québec and Saskatchewan have policies where they need to have the best available price Resulted in almost no drug price inflation until 2003. But….

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Emerging Trends in Pharmaceutical Marketing

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  1. Emerging Trends in Pharmaceutical Marketing Pricing Strategy Workshop

  2. Some History… • The ODB froze the 1993/94 formulary prices • Québec and Saskatchewan have policies where they need to have the best available price • Resulted in almost no drug price inflation until 2003

  3. But… • Price difference between U.S. is increasing • Cross-border shopping has become a sizeable problem • Manufacturers are looking for solutions

  4. PricesCanada vs. International Canadian prices are lower Prices at par Canadian prices are higher Source: Annual Report, CEPMB, 1999-2004

  5. PricesCanada vs. International Canadian prices are lower Prices at par Canadian prices are higher Source: Annual Report, PMPRB, 1999-2004

  6. PricesCanada vs. International Canadian prices are lower Stronger currencies Prices at par Canadian prices are higher Source: Annual Report, PMPRB, 1999-2004

  7. PricesCanada vs. International Canadian prices are lower Weaker USD Prices at par Canadian prices are higher Source: Annual Report, PMPRB, 1999-2004

  8. PricesCanada vs. International • When compared to the U.S., U.K. and Switzerland, Canadian prices (patented drugs) are lower • Affected by exchange rates – lower Canadian dollar since 2002 (36-month average) is reversing trends • The difference with the U.S. is increasing Increasing Internet sales Pressures to reduce the difference

  9. PricesCanada vs. International New Products Launched: • Prices “at par” internationally Existing Products: • Price increases • Restricted by the PMPRB – bending the rules • Restricted by the provinces ?

  10. Formulary IncreasesBy provinces

  11. Formulary Increases and TimingBy provinces, BOTOX (UNIT DOSE VIAL) April 2004

  12. Formulary Increases and TimingBy provinces

  13. Formulary Increases and TimingBy provinces

  14. Are formularies the last answer? • Private Drug Plans are ±40% of the National drug market • Only few have managed formularies • Most are price takers, even with adjudication system

  15. Price Increases – Private Data2003-2004 • Sample of 1200 DINs (72% of all Ontario private drug plan claims – July 2005) • Approximately 200 price increases on brand products form Jan. 2002 to July 2005 • Approximately 25 price increases on generic products form Jan. 2002 to July 2005 • 30 manufacturers • Most increases • 3%-6% (brand products) • 2% to 300% (generic products)

  16. Brogan Price IndexPrivate Drug Plans January 2002 = 1

  17. Brogan Price IndexVersus Inflation June 2003 = 1

  18. Price Increases – Conclusions • Depends on who is paying • Timing is everything – especially when the PMPRB is concerned • What is the reaction of all stakeholders?

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