Pricing Decision : Pharmaceutical executives not only should balance price between customers and competitors, but also

should deal with prescribers & health authorities, deal with pricing authorities & reimbursement authorities, deal with independent health-economic advisors and a host of other stakeholders. Many companies are using smarter, more sophisticated tools to formulate and value pricing strategies than before. At present, pharmaceutical executives face a whole plethora of strategic questions related to pricing, the nature of which changes significantly throughout the life cycle of their products. Pricing over the product life cycle: The basic premise of the product life cycle is that a product, or in some cases a brand, passes through a number of identifiable stages after its introduction. Following introduction, growth is characterized by rapidly accelerating sales, the introduction of product variations, and product improvements and the emergence of profit. Maturity is characterized as intensely competitive, with customers knowledgeable about the product which is often labeled a shelf item. The growth in sales slows and levels out. Maturity is followed by decline where sales have started to diminish, because the product has been displayed by newer introductions and/or changing market requirements. As a product moves through life cycle, the basis of competition shifts from performance that provides product differentiation to product standardization and customer service. Product standardization, plus long production runs and experience in manufacturing, will usually result n lower manufacturing costs. However, in turn, greater competition will place downward pressures on price and increase the expenditure of funds for marketing and related services.

FIMOXYL life cycle stage: Fimoxyl is a low dose antibiotic and is the most widely sold product of Sanofi Aventis Pharma. It is now in the early Maturity Stage of the product life cycle. Its growth rate has slowed down to 5-7%. At present, Fimoxyl is facing more challenges from a number of competitors available in the market. So, the pricing decision for Fymoxyl will be same as the maturity stages pricing decision,which includes: 1. Shift the focus away from price

2. 3. 4. 5. 6.

Adapt product proposition to maintain sales Price setting against generic products Implement defense strategies Develop an understanding of causes of price deviations. Implement plan to reduce/eliminate price deviations.