The role of pricing research in assessing the commercial potential of new drugs in development

Pricing research has an important role to play in the go/no-go decisions taken to finance the progress of new drugs in development. There is a hierarchy in decision-making when it comes to determining the price of new drugs. Many different audiences (government, HMOs/insurance companies, formulary committees, physicians and patients) play a role in determining the price of new drugs. The questions then are when should we start pricing research, who should we talk to and what techniques should be used? This paper explores the role of pricing research throughout the eight- to ten-year development life cycle of new drugs. We examine the various pricing research approaches tailored to suit the different decision-marking audiences at the appropriate milestones in assessing the clinical and commercial potential of new drugs.