Price positioning

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Case Studies: Prescription Drugs Positioned on Price

While there is no pre-existing information to fully answer your question, we've used the available data to pull together the following key findings.

Name brand prescription brands often invest serious amounts in obtaining marketing approval — up to US$2.6 billion, which is why these drugs are significantly more expensive than generics. Prices of drugs in the US are much higher than in other developed countries due to the country's unique healthcare system and regulation, though patients of infectious diseases have started finding alternative routes to obtain cheaper medication — such as buyers clubs.

Below you'll find an outline of our research methodology to better understand why information you've requested is publicly unavailable, as well as a deep dive into our findings.

METHODOLOGY
In order to answer your query, we started by researching case studies of marketing and brand positioning for prescription drugs in the US, focusing on those that have made price the center of their strategy. We first started by looking at drugs for HIV and infectious diseases, but when it did not yield any satisfactory results, we expanded our search to all prescription drugs.

However, and despite extensive search through both medical whitepaper databases, such as the US National Institute of Health, the International Center for Pharmaceutical Economics and Policy or the US National Center for Biotechnology Information, and specialized and generalized media, such as Quartz, Medscape, AIDS Info, Newsweek, Forbes, Fortune or Reuters, case studies for prescription drug brands that have positioned themselves in terms of price are not available. One explanation for this could be, as it is explained in more detail below, that it is hard to beat generics in terms of price, and pharmaceuticals choose to follow a different path in terms of marketing — namely, as it is explained below, identifying their brand with the disease it treats, and not with its competitors.

Below we have included some information on what goes on the price of a brand name prescription drug and why it is so different from generics, why the price of drugs is so high in the US and what are patients doing to find more affordable treatment.

USEFUL FINDINGS
Marketing is a huge expense for pharmaceutical companies, and one of the main reasons why brand name prescription drugs are so much more expensive than generics. According to a study by The Tufts Center for the Study of Drug Development, reproduced by the Huffington Post, the cost to develop and gain marketing approval for a new drug can go up to US$2.6 billion.

Generics are the most affordable option for Americans, and have saved them US$1 trillion in the last decade, and over US$1 billion every other day — which can explain why no brand-name prescription drug positions itself on price, as it would be hard to beat generics.

Prices of drugs in the US are hard to control as well, due to the unique nature of the US healthcare system and the regulation behind (unlike the European system, where drug prices are very tightly controlled). Under US law, drugs can increase in price at exorbitant rates — such as 6,000% in a short time.

The FDA also does not require effectiveness comparison in order to approve a new drug, which keeps potential competitors in the dark and gives the first developer to approach the FDA an advantage and unique position to set a price.

Pharmaceutical marketing and brand positioning, therefore, is largely product-oriented. Pharmaceutical companies emphasize their marketing in raising disease awareness and introducing their product as the solution — thus identifying their brand as the cure. Therefore, disease awareness builds brand awareness. Drugs are marketed exclusively in relation to the conditions they treat, not in relation to their competitors.

Americans have started to find ways around these high prices — such as buyers clubs, which put in touch patients of infectious diseases such as HIV and hepatitis with online prescription drug sellers from abroad, often at a fraction of the price.

"While regulators warn that buying drugs online is risky, scientific data presented at a recent medical conference suggest that treatment arranged through buyers club can be just as effective as through conventional channels," writes Ben Hirschler at Reuters.

CONCLUSION
To wrap up, while there is no pre-existing information to fully answer your question, we've used the available data to pull together the following key findings: name brand prescription brands often invest serious amounts in obtaining marketing approval, which is why these drugs are significantly more expensive than generics; prices of drugs in the US are much higher than in other developed countries due to the country's unique healthcare system and regulation; and patients of infectious diseases have started finding alternative routes to obtain cheaper medication — such as buyers clubs.
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Sources