Model N 2013 annual Global Price Management Survey - Life Sciences

©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL

2013 Annual Survey – Global Pricing in Life SciencesIndustry Benchmark Report

©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL | www.modeln.com/rainmaker©2013 Model N, Inc. PROPRIETARY & CONFIDENTIAL2

First Annual Global Pricing SurveyEXECUTIVE SUMMARY

• In general Global Pricing teams are able to work with the governance and processes they have in place, however there are significant areas of improvement when it comes to operationalizing these processes

• Companies are equipped with systems and tools allowing “blocking and tackling” activities of Global Pricing, but are underequipped when it comes to collaborating well and making fast data-driven decisions based on advanced analytics

• Many respondents report a lack of automation, ease-of-use, maintainability– Legacy home-grown applications are common place, and more than 1/3

of companies use Excel for Data Management, Reporting and Analytics

• More than 50% of the companies plan to invest in order to fix systems that hamper good decision-making


First Annual Global Pricing SurveyTo Understand How to Best Fulfill Industry Needs

12

10

6

7

Russia

Denmark

Italy

Belgium

France

Switzerland

Germany

United Kingdom

United States

Survey Objectives• Better understand industry needs

and priorities• Continuously improve software and

services• Share a benchmark with the pricing

community

44 global respondents


First Annual Global Pricing SurveyDemographics Match Desired Industry Representation

Series1

Local affiliate RegionGlobal HQ

Series1

<500M 500M - 1B1B - 10B >10B

Alcon Institute StraumannAlexion InterMuneAmgen LEO PharmaAstraZeneca MedtronicBasilea MenariniBiogen Idec Merck KGaABioMarin Merck MilliporeBMS NovartisBoehringer Ingelheim PfizerCovidien Regeneron Eisai RocheEli Lilly Sandoz Ferring The Medicines CompanyGrunenthal Threshold PharmaGSK UCBDouble Helix Kantar HealthKamedis Conseils Market Access Solutions

PwC

35 individual companies represented Respondent distribution(vendors excluded)


Global Pricing Today


Top of mind Global Pricing challengesTeam Bandwidth, Tenders, LoE are most experienced challenges

Lost price due to inaccurate/ out-of-date data

Inaccurate or late price reporting to MoHs

Lost price due to lack of IRP anticipation

Lost price due to inadequate launch sequence

Lost price due to lack of global collaboration

Parallel trade as a result of wide price corridors

Lost too much price at loss of exclusivity

Lost price due to tenders coupled with IRP

Struggled with too many price change requests

0 0.1 0.2 0.3 0.4 0.5

<500M500M - 1B1B - 10B>10B

Q: Among some of the Global Pricing challenges below, which 3 have you most experienced recently?

40%20%


Industry Practices Today - GLOBAL PRICING REPOSITORY Gaps in the areas of Integration, Collaboration, Basic Reporting

Integrates all necessary data sources

Collaborative calendar of events

Audit trail

Easy reporting/ dashboards

Enables notifications, approvals

User-friendly and admin-friendly

Fast access worldwide

Single global pricing database

Have and satisfactory Have but not satisfactory Do not have

Q: How would you describe your current GLOBAL PRICING REPOSITORY across the below components and characteristics?


Industry Practices Today - GLOBAL PRICING PROCESS & ORG.Domains with most satisfaction today

Data ownership & update process

Role-based user rights and responsibilities

Launch sequencing process

Price change process

Governance


Q: How would you describe your current GLOBAL PRICING PROCESS & ORGANIZATION across the below components and characteristics?

Process OK, hence slide 5 suggests issues in price

change process operations


Industry Practices Today - INTERNATIONAL REFERENCE PRICING Many gaps, especially in Scalability, Automation, Launch Sequence

Easy to add functions, pages, workflows

I/O integration with other systems

Launch sequencing optimization algorithm

Easy scenario visualization/ comparison

Easy-to-use interface

Price change impact analytics

Flexible and detailed reference rules


Q: How would you describe your current INTERNATIONAL REFERENCE PRICING tool across the below components and characteristics?


Industry Practices Today – Global Pricing System LandscapeIndustry still relies heavily on Excel! Less than 25% vendor systems

Q: Which types of software solutions are in use in your organization in the following categories?

Scenario analytics & Optimization

Reporting

Global collaboration and processes

Reference rules and price events

Database of global prices

0 10 20 30 40 50 60 70


Global Pricing Tomorrow


Areas for improvementHigh need for improvement esp. on collaboration and analytics

Very important, current setup is inappropriate/ incomplete

Important, current setup hampers making good deci-sion

Quite important, we have key areas of improvement

Not too important, setup is fine most of the time

Not important, current setup is what we need

Q: Overall, how important is it for your team/ organization to improve on the following…

123 4


Global Pricing ServicesHelp needed to complement skill set, bandwidth and system

Other

IRP rules 'as a service': Initialization & re-curring updates

Product-specific strategies to best work with/around International Pricing rules

Validation of accurate application of IRP rules in country affiliates

Assess and design Global Pricing system and organization strategy

International Reference Pricing (IRP) industry benchmarking

IRP scenario analytics (price change, launch sequence, genericization, etc)

Q: Which third party consulting services do you think your organization could need?


Take-AwaysInvestment needs to tie back to identified gaps and most value add

• 40+% have areas for improvement hampering good business practice in Pricing Collaboration

• 50+% have areas for improvement hampering good business practice in Price Simulation

• Improving capabilities in ‘13/’14 is medium or high priority for 55%

Price change process

Price & launch simulation

Price events database

Reporting & dashboards

Reference rules management

Local/ global collaboration

Global pricing database

Competitive price database

0%20%

40%60%

80%100%

Yes Considering No

Investment areas in next 24 months

Where will you invest in the next 24 months?


Arnaud Grunwald

Senior Director Global Pricing Strategic Initiative

[email protected]

+ 1 650.610.4656

Contact Information:


2014 Annual Survey – Global Pricing in Life SciencesIndustry Benchmark Report

Coming soon ..


How Model N solution helps

COLLABORATION

PRICE REQUESTS

WHAT-IF PRICE SCENARIOS

SCALABILITY / FLEXIBILITY

INTEGRATING DATA SOURCES

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Model N 2013 annual Global Price Management Survey - Life Sciences