Talking Value in Pharma in Geneva

Talking Value in Pharma in Geneva:
from Axia Value Solutions by admin

Harry on tour! – Part 1
Another week and, in this instance, another conference.  Harry was in Montreux for the 2^nd Annual Pricing & Profit Optimization Forum on Life Sciences hosted by the European Pricing Platform (while I was in Stokenchurch!)
It was a great opportunity to learn about pricing challenges in pharma in particular, and compare these with the challenges we are finding elsewhere.   There is no doubt it is a really tough market and needs very high level skills indeed if companies are to be successful.

It's a tough life but someone's got to do it! Lake Geneva from the bedroom window!

So what are the pricing issues in these industries?
Once more, commoditization reared its ugly head.  Ugly in pharma particularly because – at least to our way of thinking – driving the prices of such important products and technologies down to the lowest possible level cannot be in the interest of the industries concerned.  Or for that matter public interest.  A key question for pharma is how does a company optimize its profit streams given the regulatory complexity, intense competition, generics, and the vagaries of reimbursement?
In the plenary discussion at the end of Day 1 delegates wanted to talk about Value!  This industry sees Value as the way forward.
What did they want to discuss?

•  Building value into product ideation and development – rather than leaving it to the commercialization stage;
• Ensuring that when products are launched there is a clear and compelling value proposition;
• Kill non-value oriented products long before they get to market…even at development stage;
• Bring in pricing at a much earlier stage – even thinking about it at the stage of concept generation;
• Communicate value more effectively at all stages, but especially at the go-to-market phase;
• Moving from selling products (on features and price) to value.

Just how many of these are common to your own business?
So what about the role of Sales?
One of the things that was both interesting and surprising was the relative absence of discussion of the role of sales and product management.  The conference was all about pricing, of course, and there were lots innovative ideas explored…but they were about optimizing returns from largely cost or competition based approaches.  We can create a really clever pricing strategy and plan it to the tenth decimal place.  But ultimately products have to be marketed and sold. If they are not sold correctly, these strategies will crash and burn, products will fail to achieve anything like their potential and companies will be discouraged from developing new products.
So perhaps the time is fast approaching when sales needs to be recognised as a key component in the pursuit of a value approach to both selling and pricing.  They need to have the skills and capabilities, and the support, to be able to explore the customers perceptions of value, feed those back accurately to the organisation and subsequently communicate the value of the solution back to the customer.  More than anything, they need the skills to move away from the “Discount Default” to the “Value Default”.  They cannot do it on their own.