By Gary Johnson, expert-trainer of the How to Price Better than Your Competitors for Successful Market Access 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:
- The chronicity of a disease (whether it is acute or chronic)
- Symptomatology (whether the disease is symptomatic or 'silent'); and
- 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.
Learn more about this topic at the following short duration course(s):
How to Price Better Than Your Competitors for Successful Market Access
Essential Insights, Principles & Techniques
With Gary Johnson & Sam Johnson
