ABSTRACT
In the early 1980s, the standard approach to pharmaceutical pricing was to set the Price of a new product higher than the market leader and enjoy the revenue. The field of pharmaceutical pricing is complex, convoluted, and often ambiguous, but it is not unfathomable. The lack of market and competitive knowledge and the use of general assumptions have seduced many in the industry to assign higher levels of importance and Price sensitivity to several segments. These forces (product focus, lack of awareness of market and competitive issues, and a general lack of familiarity with pricing concepts) combine to bring about two "disorders" that must be corrected. These pharmaceutical pricing diseases are: Fear of Pricing and Managed Care Myopia. The pricing of pharmaceutical products, as with the pricing of any product or service, should be market based. The future of pharmaceutical pricing will be whatever the pharmaceutical industry allows it to be, through the actions and inactions of individual firms.
