Pharma Can Gain Control Over Pricing and Profits
The healthcare industry is facing public backlash for two recent controversial price changes, and the damage could be worsened depending on who makes it to the White House. After Turing Pharmaceuticals and Mylan increased the costs for their respective products, Daraprim and the Epi-Pen, the public was outraged. With this scandalous price gouging out in the open, pharma must figure out a way to control costs before the government, and the public, insist on legislated price controls.
Martin Shkreli, CEO of Turing Pharmaceuticals inflated the cost of Daraprim from $13.50 per pill to $750 and, more recently, Mylan also greatly increased the cost for the Epi-Pen. According to “Big Pharma Leaders Face Dilemma Over Rising Drug Prices,” posted by J.P. Donlon on ChiefExecutive.net, the price hikes were completely legal. While there are currently no laws limiting these types of price hikes in the pharmaceutical industry, Shkreli soon found himself in the headlines labeled as “the most hated man in America” and a shining example of greed in the pharma industry.
In response to these headline-making price changes, democratic presidential candidate Hillary Clinton indicated she would create an oversight panel to protect citizens from these types of extreme price hikes. Ian Read, Pfizer CEO, indicated her plan to lower drug prices would stifle innovation and price controls would make matters worse. Others suggest drug pricing is a product of a battle between pharma and insurance companies, each passing along increasing drug costs to consumers.
Back in the 1990s, after a similar pricing scandal and congressional hearings, nine pharmaceutical companies, including Merck, pledged to self-control price increases, keeping them at or below inflation. More recently, Allergan pledged a ‘social contract’ with patients to do the same, promising a balance between profit goals with investments in research and development to produce more life-saving drugs. Taking this proactive step now could deter government from getting involved after the next election and could also turn around the tarnished reputation of pharmaceutical companies.
Protect Pharma Profit Margins and Reduce Waste With ERP
Pharma can gain greater control and insight over financial processes, research and development costs, as well as marketing and advertising costs by deploying a robust enterprise resource planning (ERP) solution. An integrated ERP solution makes it easier to capture, analyze and use business data to control costs, reduce wasteful practices and spending, and protect profit margins. Contact AKA Enterprise Solutions for more information about controlling pricing and profits with ERP.
By AKA Enterprise Solutions, a Microsoft Dynamics CRM and ERP Partner for Life Sciences