Pricing strategies in the pharmaceutical activities

Sartbayeva Yerkezhan

Resident of General Surgery in Kazakh-Russian medical university

There are different ways of price formations in the large economy [1]. In general, all methods of pricing can be classified into three main groups: methods, based on cost accounting, pricing, based on analysis of competitors' prices, as well as client-oriented pricing. As a certain method from the first category, some researchers emphasized the approach to pricing, associated with the calculation of breakeven point of goods [2]. In this interpretation, all pricing methods can be divided into four main groups:

- on the basis of the identification of the breakeven point;

- on the basis of cost analysis («rate of return» methods);

- based on the determination of competitors’ price level;

- on the basis of the perceived drug value (requiring market research).

In practice of industrial and commercial organizations, the most effective pricing strategy, according to the researchers, should be a combination of these methods [3].

An important issue in the development of pricing strategies is the selection of the object of management: the basic product price or additional increase [4]. As a mechanism for individual pricing, the cascade system of discounts was proposed: for the volume of the nonrepeat order, for the monthly order, for timely payment [3]. The variant of combination strategy included squaring of prices individually with each customer important for the trade organization; small customers make purchasing decisions based on the generated total price list [2]. Most published works, dealing with pricing in pharmacy, were oriented on the retail pharmaceutical market [1]. Some authors indirectly lit pricing issues in the distributor's organizations as an integral part of the chain “manufacturer - the final customer” [3].

These studies, in particular, showed the influence of the purchasing prices level in wholesale organizations on the final price of medicines in pharmacies, and offered the modeling scheme of changes in the value of goods at each stage of the chain. To improve the attractiveness of the price quotation in pharmacy organizations different approaches were described in the literature. One of the offered methods could highlight the use of different strategies to the formed price groups (loss leaders, basic goods, flow goods, complementary goods, new goods, etc.). Further commodity groups were allocated from the overall mix, for example, drugs and dietary supplements; pharmacies were classified into "walkable" and "sleeping".

Each pharmacy, category and price segment established its pricing strategy, stressing the importance of continuous monitoring of the pharmacies’ economic efficiency. Similar approaches to pricing in the retail pharmacy organizations are presented in a number of other works [1]. Thus for example, one of the authors, in addition to the price segmentation and monitoring of the competitors, from all commodity nomenclature offered to highlight the product mix core and provide individual pricing policy in respect of goods that are included in the core. Algorithm for the definition of the tracer commodity is presented at fixed prices in other works, according to which the consumer makes a conclusion about the general level of prices in the pharmacy [3].

The importance of evaluation of seasonal fluctuations was shown in the pharmaceutical market and a pricing forecasting technique was developed for seasonal products, allowing the pharmacy organization to take countermeasures in advance to a possible price changes by competitors. Some publications were devoted to price regulation of the discounts for goods, offered by retail pharmaceutical organizations [2]. Researchers developed the methods for the efficiency estimation of discount programs, the inadvisability of some discounts, which were common practice in the retail trade, was also shown. A number of published works was devoted to the study of the demand elasticity in the retail trade and the possibility of determination of the "indifferent zone" in the product price for the end customer. It may be noted that the information about the elastic and inelastic goods, given in some sources, was not confirmed by statistical treatment, and therefore was unproven and thus often contradictory.

According to expert opinion, the elasticity of demand with sufficient accuracy can be established only experimentally in each specific case with the use of iteration steps. Information about undertaken studies on the pricing "indifferent zone" and the elasticity of demand in the wholesale pharmaceutical market in the literature were absent. In general, research in the field of strategic management of wholesale pharmaceutical company almost did not cover issues of optimality of the offered decisions, including ones associated with the characteristic aspects of the market. The described problems were a prerequisite for the development of optimization strategy to improve the efficiency of the wholesale pharmaceutical companies.

List of used literature:

1. Kulik, V.V. Otsenka assortimenta lekarstvennykh sredstv i razrabotka marketingovoy kontseptsii aptechnogo predpriyatiya / V.V. Kulik, T.I. Kabakova, N.G. Kondrashkov // Novaya apteka.– 2006.– №7. S. 63 - 68.

2. Kurivchak, I. Skol'ko mozhno zarabotat' v farme? / I. Kurivchak // Katrenstil'. Zhurnal dlya sotrudnikov aptechnykh uchrezhdeniy.– 2012.– № 3.– S. 16-20.

3. Levik, O. Sovremennyye aspekty upravleniya assortimentom / O. Levik // Yezhenedel'nik Apteka.– 2007.– № 31.– S. 92-95.

4. Lindblom, A. Taktika kategoriynogo menedzhmenta: analiz kontrolya proizvoditeley / A. Lindblom, R. Olkkonen // Upravleniye kanalami distributsii.– 2008.– № 3.– S. 242-253.