Price Precision

Medical device companies, consumer healthcare enterprises, and pharmaceutical firms frequently encounter the challenge of setting accurate prices for their products and services. This entails making strategic decisions on establishing prices fairly and competitively, considering factors such as production costs, market demand, and competition.

Size of the Problem

• According to a market report, the global medical devices market is estimated to reach $543.9 billion by 2021 (1).
• A study conducted in the pharmaceutical industry revealed that 82% of executives consider pricing to be a critical factor for the success of their company (2).
• A report on the consumer healthcare market highlights that inaccurate or unclear pricing is one of the primary barriers for consumers when purchasing personal care and health products (3).

Price accuracy in medical device companies, consumer healthcare enterprises, and pharmaceutical firms is crucial for several reasons:

■ Competitiveness: Establishing precise and competitive prices is essential to thrive in an increasingly competitive market. Customers compare prices of different products and services before making a purchase decision.
■ Profitability: Setting the correct prices enables companies to gain profits and maximize their profitability. Too low a price can result in losses, while too high a price can deter customers and decrease sales.
■ Perception of value: Accurate and fair pricing helps consumers perceive the value of products and services. If prices do not align with the quality or benefits they offer, customers may lose trust in the company.

1. Data Analysis:

Artificial Intelligence (AI) can analyze large volumes of data, such as production costs, market demand, and competition, to assist companies in establishing more accurate and evidence-based pricing.

2. Price Segmentation:

AI can help segment customers into specific groups based on their willingness to pay, enabling companies to offer customized prices to different market segments.

3. Speed and Flexibility in Price Adjustment:

In the digital age, speed and flexibility in adjusting prices in response to market fluctuations are critical. AI continuously monitors the market environment, including competitors' actions, regulatory changes, and global or local economic trends. This allows companies to adjust their pricing strategies in real-time to respond to unforeseen events or to capitalize on emerging opportunities (4).

4. Pharmaceutical Price Optimization Assistant with AI:

In this case, a conversational assistant specialized in pharmaceutical price optimization has been trained using a comprehensive database from SISMED in Colombia (4). This assistant can analyze historical and current trends, identify patterns, and anticipate changes in market behavior that may influence pricing decisions.

• Competitor Price Database: A database that stores information about prices of products and services offered by direct competitors. This would enable the pharmacy to stay informed about market prices and competitively adjust its prices.
• Sales History Database: This database would record past sales of the pharmacy's products and services. It would help identify demand patterns and adjust prices based on the historical performance of products.
• Production Cost Database: It would store information about the products and services production costs. This information would be essential for setting prices that cover costs and generate profits.
• Customer Preferences Database: This database would contain information about customers' preferences and buying habits. It would allow the pharmacy to adjust prices based on what customers value and are willing to pay.
• Market Trends Database: It stores information about current and future trends in the pharmaceutical market, including changes in demand and prices of similar products. This would help the pharmacy anticipate and adapt to market fluctuations.