The Price of Lescol's Success
Executive Summary
Sandoz’s pricing strategy on Lescol, discounting it 50% to market leaders, seems to have been far more successful than Sandoz executives expected. Is this the model for new product introductions in the future?
Sandoz’s pricing strategy on Lescol, discounting it 50% to market leaders, seems, in at least one sense, to have been far more successful than Sandoz executives expected. Originally projecting around a 10% share for the fourth drug in the category, Lescol’s share is already over 13%.
This early success has come before Lescolhas really had a chance to penetrate the managed care market; Lescol is tapping into price-conscious consumers who are making the decision in conjunction with their doctors; it isn’t in general gaining exclusive positions on HMO formularies.
Is this the model for new product introductions in the future? Sandoz officials are reportedly exploring the possibility. But Sandoz’ corporate chiefs are reportedly dismayed that while market share is up, revenues are lower than promised by its American marketers. But for drug companies in the future, this trade-off between profitability and market share may become a universal problem.