Revenue Optimization: Coming Soon to a Big Drug Company Near You

Large brand-name drug companies – Big Pharma in the common vernacular – are not exactly known for competitive pricing or razor-thin margins.  For 2008 the industry was ranked third most profitable in the U.S. according to Fortune magazine, with average profit-to-sales margins of 19.3%.  That’s a pretty fat comfort zone compared to the scorched-earth landscape of many other industries…or is it?  Until recently Big Pharma was pretty consistent at the #1 spot in those rankings. A look under the microscope reveals some troubles bubbling up in the hitherto happy world of magic molecules and blockbuster brands.  These days the whole country seems transfixed by the subject of healthcare, and no matter what does or does not come out of the legislative sausage factory this year, some major trends are afoot that have potentially far-reaching consequences for Big Pharma and may influence the normally lackadaisical approach drug makers have exhibited to the prices they charge for their brand-name drugs – in particular when those drugs reach the end of their exclusivity protection period and go off patent. Read the rest of this entry »

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