#costbased

Role of Pharma Pricing Strategy in the Industry

First, we need to understand the function of pharmaceutical pricing strategies. Advanced analytics for demand forecasting and powerful pricing strategies (used by businesses to appropriately price their products/services, taking into account the costs of manufacturing, packaging, shipping, marketing, adding margins, etc.) methods) can help companies win. The industry can greatly improve its understanding of what drives customer purchasing decisions. Our pharmaceutical clients implement value-based benchmarking of drug prices to maximize profitability using data-driven insights.  

Types of Pharmaceutical Pricing Strategies:

Value-based

Cost-based

Competition-based

Price skimming-based

About the Client

The customer is a well-known German-based European API manufacturer that is well-known for producing pharmaceuticals that are biologically active. It is also a well-known name on the list of API producers worldwide. The client, which was founded shortly after World War II, has over 70 patent APIs under its name.

Despite having large internal teams, the customer wanted to improve the development of their pharmaceutical drugs, so they contacted our specialists to see what they might do.

Business Impact

The customer was able to determine the appropriate price for their product as a consequence of including pharmaceutical pricing strategy solutions, hidden elements driving price, and price bench marking into their decision-making process.

The road to benchmark medicine prices also triggered a quick transformation in corporate culture, moving workers from a value-oriented to a sales-oriented perspective.

New Post has been published on http://autoinsurance.media/virginia-reminds-insurers-rates-rating-rules-must-be-cost-based-2/amp/

Virginia Reminds Insurers: Rates, Rating Rules Must Be Cost-Based

Virginia Insurance Commissioner Jacqueline Cunningham has issued an administrative letter this month reminding insurers to review the rate standards outlined in Virginia Code § 38.2-1904 to ensure compliance.

The administrative letter also indicates that so-called “price optimization” techniques that raise premiums for policyholders who are considered unlikely to search for a better deal have not been permitted in Virginia.

The administrative letter (Re: Compliance with Statutory Rate Standards in File-and-Use Lines of Insurance) was issued on April 15 and was addressed to all insurers and rate service organizations licensed to write property/casualty insurance in Virginia.

“The primary focus of the letter is to remind insurers of the rate standards in Virginia and that rates and rating rules must be cost-based,” said Katha Treanor, a spokesperson for the Virginia State Corporation Commission and the Bureau of Insurance.

In Virginia, insurers’ filings are reviewed to determine that they comply with the statutory requirements before the Bureau of Insurance acknowledges them, Treanor said. The compliance review includes identifying provisions within the filing that may be in conflict with the rate standards or other statutory requirements in Virginia. If any are noted, the items are addressed and remedied during the review process.

Cunningham said in the administrative letter that in recent years, Virginia has received rates and supplementary rating information in filings that utilize increasingly complex pricing mechanisms, such as predictive models.

Cunningham said some filings have included pricing mechanisms that are inconsistent with the rate standards outlined in § 38.2-1904, particularly subsection A 3. (The subsection A 3 states “No rate shall be unfairly discriminatory if a different rate is charged for the same coverage and the rate differential (i) is based on sound actuarial principles or (ii) is related to actual or reasonably anticipated experience.”)

The commissioner noted that in order to comply with the rate standards, “any rate differentials for the same coverage” must be based on differences between expected losses and/or expenses.

She said examples of practices that have been determined to be inconsistent with the provisions of § 38.2-1904 A 3 include, but are not limited to, the use of:

• Characteristics specific to a particular policyholder to predict and assign pricing components unrelated to losses or expenses incurred during the policy period;

• Pricing components related to an insured’s predicted long-term profitability over time, based on an insured’s likelihood to renew; and

• Price optimization techniques intended to maximize overall retention, profitability, written premium or market share based on how much of a premium increase an individual policyholder is likely to tolerate before seeking coverage with other carriers.

New Post has been published on http://autoinsurance.media/virginia-reminds-insurers-rates-rating-rules-must-be-cost-based/amp/

Virginia Reminds Insurers: Rates, Rating Rules Must Be Cost-Based

Virginia Insurance Commissioner Jacqueline Cunningham has issued an administrative letter this month reminding insurers to review the rate standards outlined in Virginia Code § 38.2-1904 to ensure compliance.

The administrative letter also indicates that so-called “price optimization” techniques that raise premiums for policyholders who are considered unlikely to search for a better deal have not been permitted in Virginia.

The administrative letter (Re: Compliance with Statutory Rate Standards in File-and-Use Lines of Insurance) was issued on April 15 and was addressed to all insurers and rate service organizations licensed to write property/casualty insurance in Virginia.

“The primary focus of the letter is to remind insurers of the rate standards in Virginia and that rates and rating rules must be cost-based,” said Katha Treanor, a spokesperson for the Virginia State Corporation Commission and the Bureau of Insurance.

In Virginia, insurers’ filings are reviewed to determine that they comply with the statutory requirements before the Bureau of Insurance acknowledges them, Treanor said. The compliance review includes identifying provisions within the filing that may be in conflict with the rate standards or other statutory requirements in Virginia. If any are noted, the items are addressed and remedied during the review process.

Cunningham said in the administrative letter that in recent years, Virginia has received rates and supplementary rating information in filings that utilize increasingly complex pricing mechanisms, such as predictive models.

Cunningham said some filings have included pricing mechanisms that are inconsistent with the rate standards outlined in § 38.2-1904, particularly subsection A 3. (The subsection A 3 states “No rate shall be unfairly discriminatory if a different rate is charged for the same coverage and the rate differential (i) is based on sound actuarial principles or (ii) is related to actual or reasonably anticipated experience.”)

The commissioner noted that in order to comply with the rate standards, “any rate differentials for the same coverage” must be based on differences between expected losses and/or expenses.

She said examples of practices that have been determined to be inconsistent with the provisions of § 38.2-1904 A 3 include, but are not limited to, the use of:

• Characteristics specific to a particular policyholder to predict and assign pricing components unrelated to losses or expenses incurred during the policy period;

• Pricing components related to an insured’s predicted long-term profitability over time, based on an insured’s likelihood to renew; and

• Price optimization techniques intended to maximize overall retention, profitability, written premium or market share based on how much of a premium increase an individual policyholder is likely to tolerate before seeking coverage with other carriers.