SETTING THE SCENE
This is it. Your Global Price Management and Tender Management tool has finally been deployed based on your global and local requirements. Your data is integrated from various sources ranging from enterprise resource planning (ERP) to finance to publicly available sources. Your users are trained; roles and responsibilities are clearly defined; processes outlined and communicated; and management expectations are aligned. So, what’s next?
Let’s look at the benefits of going through such an implementation.
Besides the obvious advantages of grouping all price related functions under a single application, think about the added benefit of a central repository and global access. There are also more subtle benefits an organization can gain from:
- More autonomy - your Market Access team can run their own analysis using the Launch Sequence Optimization (LSO) module. Giving the decision power back to your organization
- Shortening the process- all tools are available in-house; reduced turnaround time between the analysis and approval process.
- Tracking the effect of financials for each pricing event. Pricing Managers, subject to price threshold validation, can easily assess the effect of cross country revenue, prices deemed to be too low can be flagged, and the review and approval process escalated.
- Data integration in all modules from Price Governance to Tender Management means less maintenance and standardized approval workflows for pricing events (e.g., gross to net).
Realizing the strategy, tools, and control mechanisms ultimately helps you reach your goals.
Why does it matter? How can the benefits be realized?
Company wide data coming from different sources has been integrated into the tool, improving the accuracy of the information. This allows users from different areas of the company to easily access common information. A user in one country can access the official exchange rate of another to compare prices at pack level, while users in Market Access can measure the effect of reference pricing during a launch phase. The tool supports a control mechanism to monitor list and net prices, allowing you to achieve sustainable and long-term revenue development.
All of your modules are in one place, ranging from pre-launch activities to periodic reviews, managed by price guideline principles.
From a business process perspective, additional benefits can be achieved:
Optimizing launches – The Market Access team can validate their original pricing assumptions and launch a plan throughout the launch cycle from the first country to the last. Our experience has shown that the tool has helped with:
- Flagging suboptimal prices by allowing the company to compare the optimal list price to the actual list price for previously launched countries.
- Identifying incomplete or outdated International Reference Pricing (IRP) rules, constantly increasing the accuracy of rules and improving the quality of the analysis.
- Identifying data gaps (e.g., missing prices for already launched countries). By expanding the database content, each analysis can be refined and will improve its quality and accuracy.
- Users can anticipate the product data setup and country allocation in order for the system to be ready when market authorization arrives. This allows countries to enter their pricing and reimbursement information autonomously. In turn, the quality of information is enhanced (e.g., for IRP analysis), the information is also accessible to the entire organization
Minimizing IRP risks and impact – As is common in most companies, the set of available list prices can be limited and does not always allow for a full IRP assessment. The implementation of a reference table allows users to overcome this issue by offering the flexibility to define which list prices to capture in any IRP analysis as the database content increases.
Governing prices – The high-level guidance has been approved by management; target and/or floor prices are implemented from List to Net, by price type, and by sales channel.
The main benefit is a flexible email notification solution that’s linked to a dedicated approval workflow to control not only the list prices but also tender and contract price implementations. This avoids any revenue leakage, and addresses tender management and IRP risks. This also ensures the correct decision-makers are getting the right information with the appropriate level of detail, in a timely manner. The solution is also making post-implementation changes easier for those who get a notification and with what content and for which event (from Price Launch to Price Change to Price Deactivation). Adapting it to the company, post implementation, is easy. As a result, the approval process can be constantly standardized, harmonized, and improved.
Accessing information – The tool offers standard Global reports which provide all the information needed by most users. More specific reports are designed to address the needs for functions or roles (e.g., LSO/IRP output). Various reports are available pre- and post-go-live and have identified gaps and inaccuracies in areas such as:
- User configuration, harmonizing data access across the organization as global and regional roles are redefined. This enables the company to identify the business coverage gaps, such as lack of user assignment to countries.
- Product hierarchy alignment identifies and understands regional differences and undertakes corrective actions, where appropriate, to allow for easier use of the tool. For example, all the right packs are selected for the IRP analysis thereby simplifying the pricing decisions. The alignment also allows for reporting and regional price comparisons at the brand level.
- IRP rule variances between Initial Reference Rules used for LSO and Re-referencing Rules used for IRP, allow the users to keep the data synchronized and up-to-date throughout the product lifecycle.
- A detailed account of the Price Governance data makes it easier to keep the alignment with management recommendations, and identifies the products that need attention.
- Additional reports improve turnaround times, such as monitoring the time needed for price approvals and keeping control of the process. The users can accurately plan the workload and proactively contact the approvers for pending price requests.
Are you Ready to Start the Journey?
Is the journey worth it? Starting with careful planning for a new product launch through complex reference pricing may affect a mature portfolio. The tool guides/helps/assists the company throughout the pricing journey, providing answers to make informed, strategic decisions faster.
Are you planning to start the journey? Do not hesitate to contact us. We can help.