The Strategic Pricing of Pharmaceuticals

Citation

Alkhateeb, F.M. and Adkins, R. (2012), "The Strategic Pricing of Pharmaceuticals", International Journal of Pharmaceutical and Healthcare Marketing, Vol. 6 No. 3, pp. 279-280. https://doi.org/10.1108/17506121211259430

The Strategic Pricing of Pharmaceuticals is designed to inform the reader of the strategies implemented to price products in the complicated market of pharmaceuticals. The author outlines the steps in pricing pharmacy products and how these decisions are made in such a different field compared to others. With medications having a “negative value” assigned to them from the consumer, there are definitely issues that have to be considered when pricing the products. The author, E.M. (Mick) Kolassa, is considered internationally as the top expert in pharmaceutical pricing. The book has seven contributors, including Kolassa, who are all employed at the global firm Medical Marketing Economics, which focuses on value based strategies for pharmaceutical and biotechnical companies.

It is laid out in 292 pages and divided into 17 chapters which are:

1. 1.

   Why is pharmaceutical pricing different?

2. 2.

   Basic pricing principles.

3. 3.

   Pricing flow and terminology.

4. 4.

   The role of value in the pricing of pharmaceuticals.

5. 5.

   The role of price in medical decision making.

6. 6.

   Patient and disease characteristics.

7. 7.

   The role of reimbursement in pricing.

8. 8.

   Competition.

9. 9.

   Public relations and policy.

10. 10.

    Company needs and abilities.

11. 11.

    Pharmaceutical pricing research.

12. 12.

    Managing the pricing function.

13. 13.

    The process for new product pricing.

14. 14.

    Generic markets.

15. 15.

    Pharmaceutical contracting basics.

16. 16.

    International pharmaceutical pricing.

17. 17.

    The future of pharmaceutical pricing.

Each chapter begins with bold subheadings throughout each chapter, keeping the subjects organized to easily find an area of interest. The core of the book is black and white text with various tables and figures throughout outlining different examples of how and why a medication is priced the way it is. There are even a couple of sample checklists included in the book to show what is used when making the decision to assign a price to a product. Each chapter begins with a quote from a recognizable leader or individual that links in with the content of that chapter. This little insert gives the reader a glimpse into what they are about to read and serve as interesting interleaves as well. There is a table of contents in the beginning that displays each chapter as well as an index which is helpful if the viewer has a certain subject they would like to review.

The writing style is in very simple terms so that even readers who are not in the healthcare field should have a relatively effortless time reading and understanding. One chapter, “Pricing flow and terminology,” even breaks down some pharmaceutical pricing terms that the average person may not be aware of the meaning, like “actual acquisition cost.” The author uses many modern day comparisons to get points across that make it more interesting to read. All in all it is an intriguing book even to those that may not have been interested in the pricing of products, because the author creates such an easy flow throughout the text.

This book would be useful for any reader interested in knowing the strategies used to price products, especially those in a complex market like pharmacy. It would be a great text for those attaining a dual degree in pharmacy and business (Dual PharmD/MBA Program). It would also be helpful in an elective course at any pharmacy or business school that focuses on subjects such as marketing, especially for those seeking an MBA in pharmaceutical or healthcare marketing. The only weakness observed is the lack of visual interesting effects such as color or more eye‐catching figures that may break the text up more to keep it intriguing. Besides this, the book serves as a fun and enlightening read into the world of pharmaceutical pricing. It proved to be very insightful and should be considered a must read for anyone involved in the pharmaceutical industry to further their knowledge about pricing.