Do you know the key drivers of price sensitivity for pharmaceuticals?

By Gary Johnson and Sam Johnson, expert trainers of The Pharma Pricing Course.
 

While Price Elasticity is a precise quantitative measure of how price affects demand, Price Sensitivity is a more qualitative concept about how important price is to customers.

In pharmaceutical markets, many factors determine how price sensitive customers are. 
For example, price sensitivity tends to vary according to:

1. The chronicity of a disease (whether it is acute or chronic)

2. Symptomatology (whether the disease is symptomatic or 'silent'); and

3. The setting in which a disease is treated (hospital or retail)

Generally speaking, and all other things being equal, price sensitivity for pharmaceuticals varies as follows:

Of course, this is a gross generalisation and it is far more complex in the real world. In the process of setting the price of a pharmaceutical, specific research techniques are required to assess the Price sensitivity of a pharmaceutical for physicians, payers, etc.