Join us in Montreux. We're putting Life Sciences pricing in the spotlight.

3rd Annual European LIFE SCIENCES EPP Pricing & Profit Optimisation Forum:
Performing “Under Pressure”
5th & 6th June 2013 - Grand Hôtel Suisse-Majestic (Montreux – Switzerland)

The Life Sciences industry is evolving. Unprecedented market changes are pushing manufacturers to seek out new skills and insights and adapt their strategies and business models. Leaders are already investing in building capabilities that will ensure they meet both commercial & strategic objectives and are re-aligning people, functions and governance structures to that effect.

The Annual Pricing and Profit Optimisation Forum is in its 3rd year, and is the only event of its kind dedicated entirely to the Life Sciences industry. Delegates from across the spectrum of pharma, generics and medical technology come together to share, discuss and debate the best approaches to optimising pricing and profitability management.

Delegates can learn from high-level speakers such as:

Ø  Ray Almeida, VP Strategic pricing support & analytics – Boston Scientific
Ø  Heiko Visarius, Owner – VISARTIS Healthcare GmbH
Ø  Julie Spiesser, Global Strategic Pricing Senior Director – Sanofi Aventis
Ø  Thomas Buccholz, Partner – Simon Kucher & Partners
Ø  Janice Haigh, Practice Leader Market Access Europe – Quintiles
Ø  Harry MacDivitt, Director – Axia Value Solutions Ltd.
Ø  Prof. Mondher Toumi, Professor of Decision Sciences & Health Policies - university of Lyon
Ø  Madalina Lavinia Preda, European Pricing supervisor - Corning Life Sciences BV
Ø  Thomas K. Hauser, Chief Compliance Officer - Siemens AG
Ø  Mark Hill, Head of Market Access EU, Middle-East, Asia, Australasia – GILEAD Sciences
Ø  Nico Kleyn, Strategy director – Deloitte Consulting
Ø  And many more

See the final timed agenda on wwww.pricingplatform.eu  and see why all the life sciences leaders are attending. This agenda contains the invaluable experience and information that will put you ahead in 2013!

 9 reasons to attend:
1.       Meet high caliber of speakers and content
2.       Discuss actual pricing and profit optimisation challenges
3.       Get unique networking opportunities during the whole 2-day event
4.       Discuss, learn and challenge both strategic and tactical topics
5.       Get insight in best practices in pharma, biotech and medtech
6.       Engage in interactive discussions (formats)
7.       Learn how to eliminate risk and enhance revenue growth
8.      Reflect and design your personal action plan
9.      Join the unique evening networking event in the Montreux Casino*****

Who should attend?

From Market-leading Life Sciences, Biotechnology, Medtech, pharma, and Bio similar companies: CXO’s ,( Senior) Vice Presidents, Senior Executives, Heads, Directors:
Pricing / Finance / Payer Relations / International Trade & Policy / Business & Corporate Strategy / Parallel Trade / Reimbursement / Commercial Pricing / Pricing Strategists / Market Access
Sales & marketing / Regulatory Affairs / Governmental Affairs / Tendering / Revenue Optimisation
This 3rd Annual EPP Life Sciences Forum is organised in partnership with Model N and supported by Deloitte and HighPoint.
Practical information:
    • Date: 5th & 6th June 2013
      4th June 2013: pre-workshop organised by ModelN (free for Forum delegates)
    • Venue: Grand Hôtel Suisse-Majestic
      Avenue des Alpes, 1820 Montreux - Switzerland
    • Rates: € 1495,00 for non-EPP Participants
                  € 1346,00 for EPP Participants
Website for information or registration: www.pricingplatform.eu

For more information, e-mail  ilse.stevens@pricingplatform.eu


EPP welcomes new prime structural partner Roland Berger Strategy Consultants

The European Pricing Platform (EPP) is pleased to announce that Roland Berger Strategy Consultants will become a new Prime Structural Partner, exhibitor, and sponsor of The Pricing Maturity Indicator and Certified Pricing Management Program.

"Businesses can still extract a lot of value by developing effective pricing strategies and then linking them with the right tactics and disciplined execution. Good pricing needs to be part of an organizational DNA to deliver growth rather than a set and forget exercise" said Chethan Sharma, Partner, UK. "Partnering with EPP puts us in a position to generate awareness and thought leadership on how to help businesses make this happen"

Roland Berger are renowned for applying creative strategies that work to solve a wide range of complex business problems including Marketing and Sales, Operational improvement, Corporate Performance, Corporate Finance and Restructuring.

 “Roland Berger  has been carefully selected to join our group of pricing experts worldwide because of their proven track record, experience, and pricing science methodologies,” said Pol Vanaerde, EPP president. “We are pleased to have Roland Berger included on our expert list, and look forward to working closely with them to better serve our participants.”

EPP serves as the first ‘Not-for-profit’ network for cross-industrial pricing decision makers in Europe. Through various on- and offline media, EPP is dedicated to develop and share pricing best practices, effective tools, methodologies and populate technological solutions assisting in successful definition and implementation of Strategic Pricing.

About Roland Berger
Roland Berger Strategy Consultants, are a top-tier, global consultancy with 250 Partners and 2,700 employees working in 51 offices across  36 countries worldwide. The firm has a track record of delivering results to a multitude of blue-chip clients in all major international markets.

About European Pricing Platform
The EPP offers your company to have the right pricing tactics in place to guarantee customer loyalty and deliver sustained margin growth to your business. Enhance your pricing know-how and be successful in it by joining this dynamic and yet resourceful pricing platform.

More information:                                                       

Britt Dejager                                                              
Project  Manager       
European Pricing Platform

M    +32/473.717.669
Tel  +32/ - Fax  +32/

Chethan Sharma
Roland Berger Strategy Consultants
6th floor | 55 Baker Street | London | W1U 8EW
Phone +44 203 075 1114 | Mobile +44 7788 391 769
mailto: chethan.sharma@rolandberger.com


Cross-Border pricing in B2B markets

Expert point of view : 

Neil Fryer’s professional experience spans over 20 years in the automotive replacement parts business, working for multinational companies such as TRW and Fiat Group Automobiles. Early on he learned the importance of optimal replacement parts pricing in delivering bottom line results and discovered that many companies have insufficient focus on this critical business process. He is convinced that concentration on pricing could help to eliminate risks and bring big benefits in a rapidly changing business environment with new competitors emerging. Neil will be discussing the impact of the online channel on parts pricing at the EPP Aftermarket Forum this year.

Cross-Border pricing in B2B markets

Automotive component manufacturers usually sell on a B2B basis in the aftermarket, utilising a network of distributors to get their products to the garages that serve the end consumer. Consequently, product price setting has to take into the account the margin requirements of different actors in the company’s distribution network.

Historically component manufacturers operated in Europe with semi-autonomous subsidiaries or importers in every national market. Each of these set prices for the company’s products on the basis of local market conditions, often leading to significant differences between countries for the retail price of the same article. Combined with market specific discount structures this meant that a first line customer in one country might be paying much less for a specific item than a counterpart in a neighbouring country.

This didn’t matter much when Europe had borders between national markets and few customers were aware of price differentials. But in the last 20 years the business environment has changed radically. Barriers to cross-border trade fell with the creation of the European single market in 1992 and the introduction of the Euro ten years later made it straightforward for customers to compare prices for the same item in different countries.

Many companies face margin risks where they sell a particular product to their first line customers at different prices in different countries, although there may also be an upside. This can only be assessed once existing price positioning across markets has been analysed.

As a first step it’s important to answer three questions:

1. How big are national price differences in reality?

Comparing a company’s prices in neighbouring markets shows how much risk there is if prices fall to the lowest common denominator. It also shows whether price positioning is consistent, which cannot be taken for granted as a company’s relative competitive strength in different markets may have influenced local price setting in the past. For example, many companies have higher prices in their home market than in countries where they are positioned as challengers.

2. What are competitors doing?

Analysing the competition’s recommended retail prices will show how far they have harmonised pricing between different national markets, if at all. It will also show whether their positioning is consistent across Europe. Competitor action or inaction may prompt customers to pressurise all suppliers for price harmonisation: understanding the situation helps take control of the process and may show companies they can take the lead where there are benefits for their own business.

3. Are customers rational buyers?

Pride, rivalry and suspicion mean that most customers are unlikely to open up to each other and compare their purchase prices directly. But consolidation in a supplier’s customer base is a threat. A first line customer with operations in more than one country can readily identify national differences in purchasing costs for the same product. A rational buyer would seek to purchase products for all markets at the lowest price found in any one market, with an immediate impact on suppliers, and companies seeking post-merger or acquisition savings are likely to act rationally.

Different times, different measures

If answering these questions shows that there is risk then suppliers have to decide how to manage it. While decentralised organisations and pricing responsibilities were appropriate in the aftermarket of 20 years ago, they may not be appropriate in today’s more integrated circumstances. If customers have consolidated through cross-border merger and acquisition, or combined their purchasing power through international buying group co-operations, they need to be managed centrally, even when they retain separate national operations.

The question as to whether a company’s existing pricing organisation, processes and systems can meet the needs of the changed market is critical. Product pricing is central to delivering gross margin and profitability and the approach to a more integrated market may range from “light touch” international coordination with specific product pricing responsibility retained in each country, to complete centralisation with no local decision making responsibility. In the end each company has to decide what fits best with its business model, culture and available resources as it seeks to optimise pricing across Europe.

The EPP Aftermarket Forum

Join us at the EPP Aftermarket Forum on 19+20 June in Frankfurt, organised in partnership with PROS, and with the support of Simon-Kucher & Partners, to discuss the questions that arise from the survey results and look at ways for service parts companies to take their pricing strategy to the next level.  Share your experiences and learn from each other - that's what our pricing and profit optimisation excellence forums are all about !

The Strategic Spare Parts Pricing Masterclass

Although spare parts traditionally represent only 10% of a company’s revenue, it generates more than 50% of its profit. Add to it the fact that your performance on spares and services significantly impacts customer satisfaction and brand loyalty, then you have all the arguments you need to join us on 18 June 2013 in Frankfurt for the Strategic Spare Parts Pricing Master class presented by Marc Toussaint, European Sales Director at Accenture Product Life Cycle Optimisation.

Early bird special of € 1.100 for 2 full forum days, and €999 for the Masterclass ends on 18 April -- click here to register ! 


The Science, Art and Common Sense of Service Costing and Pricing

Expert Point of View: 

Interesting anecdotes, insights and pragmatic observations : Kevin Wheatland has worked with almost all aspects of technology services at junior, mid- and senior management levels and shares his thoughts with us in today's Expert Point of View : The Science, Art and Common Sense of Service Costing and Pricing.

Kevin has many years of practical director level experience in the computer and telecom services industries including roles such as head of Global Services, head of Strategic Planning and head of Professional Services Strategic Marketing in various Ericsson organisations. He has also been a visiting professor in High Technology Services Management at Liverpool John Moores University. Kevin is a Certified Field Service Manager and is ITIL accredited. Currently, he is Managing Partner and consultant with Service Pulse International specialising in advising service organisations to improve internal operational efficiency and external market effectiveness.


Being invited to write an article on the subject of pricing, aimed at people who work daily with such a critical task is indeed a humbling challenge. It is highly unlikely that there is anything I can say regarding the science of pricing which would bring anything new to the table. However, having worked with almost all aspects of technology services at junior, mid- and senior management levels, I have been able to pull together a broad range of empirical and anecdotal experiences relating, amongst other things, to the art of pricing. I have endeavoured here to put down a few personal reflections in the hope that the reader will gain some additional insights, based upon practical and pragmatic observations.


Throughout my career as a service director, as a university lecturer and as an advisor to the global services industry, I have never ceased to be amazed at the relative lack of involvement by C-level executives in strategic pricing issues.  Typically, they are consulted, probably according to policy, when a sales team needs to offer a larger-than-mandated discount to a particularly demanding customer.  Otherwise they are seldom involved. Further, few top managers can tell you exactly how much of the total marketing spend is allocated to pricing.  Many C-levels I have discussed this with, proudly and rightly express that they are advocates of delegation, but I often sense that it is more a question of abdication when it comes to pricing.  Nothing is more pivotal to profit generation than the act and process of pricing.  By definition, pricing is therefore a strategic issue of the highest order that should be a permanent item on the agendas of the corporate executive committee and even the board of directors.  There are perhaps readers that do not recognise this scenario. In that case, congratulations - you work for insightful organisations! But I can assure you that this lack of attention from the top is highly prevalent.  In my consulting work,  I became so concerned with this situation, that I recently researched the matter among members of the prestigious Institute of Directors in London to check if I was alone in making such observations – or was it  that just my clients and my experience were narrow? Happily for me but also quite shockingly, there was considerable consensus among the respondents (all C-level and board members) that pricing is generally beyond the competence and understanding of the majority at the very top!   So the moral here is to engage and even educate top management. They don’t have to become experts, but they do need to understand the underlying, short- and long-term consequences of pricing practices.


In every one of my recent pricing assignments, one common denominator has been consistent among my clients.  They do not know their true costs-to-serve! (Note we are talking about complex services here). Thus profit becomes an accident - albeit a fortunate one - rather than a deliberately designed outcome.  It seems then that inefficiencies and the lack of costing data are priced into their services to compensate  for miscalculations or margins of error. In effect, this means that some customers are inevitably subsidising others.  Let’s hope the customers remain ignorant of which is which – but we do know they talk to each other so this can only be a short term rationale!  Interestingly, when we started to dig deep into service costs, all clients have openly expressed how difficult and complicated it is to conduct thorough and detailed analyses.  Of course it’s difficult – otherwise we wouldn’t need pricing experts. We customised complex mathematical simulation models for our clients, but most said that they lack reliable input data. So then we played with the numbers to assess the sensitivity of the many various input parameters in order to arrive at a reasonable appreciation of total cost. Yet still in every case, the clients said they wanted “easy solutions” and were not inclined to allocate resources to get into pricing in a systematic and meaningful way.  In more than one instance, clients just wanted to visit the issue once a year in what appeared to be a mechanical exercise! In spite of this, the lesson we learned is that interesting things can start to happen with your margins only when costing is fully understood and controllable!


The comments on costing above leads conveniently on to the subject of Big Data. The challenge of Big Data is to make sense of the vast amount of micro-information we collect so that smart, real-time decision making-is facilitated.  We strongly recommend that you pay careful attention to the design of your Field Service Orders / Job Sheets in order to ensure that the data necessary for effective management at each individual customer level is easily recorded and collated. Numerically codifying many of the inputs into a few standardised parameters (e.g. for billing, the codes might be 1-chargeable, 2-contract, 3-sales support, 4-product warranty, 5-service warranty, etc., or for work types: 1-Installation, 2-corrective maintenance, 3-preventive maintenance, 4-updating, 5-upgrading, 6-moves and changes, etc., or for work analysis: 1-symptom code, 2-cause code and 3-resolution code, etc.,) enables easy collation and analysis of data at aggregated or individual levels. Crucially, simple codification also makes it easy for the field engineers to remember and use. Again this promotes the manageability of costing and pricing and appropriately used data will provide crucial inputs to not only pricing, but also to  the design of new products and services, including more efficient service methodologies, etc., all aimed at increasing competitiveness.


It is an interesting phenomenon that only about 3-5% of service organisations are able to assess the true profitability of each individual customer aggregated yearly or preferably on a rolling basis. (Trends can be changed, history can’t!) Herein lies the proof of the generalisations made in costing and pricing discussed above, since corporate profit should normally be expected to be the aggregation of each customer’s profit. Yet we don’t seem to approach accounting in this detailed bottom up way. Again this underscores our tendency to fatten margins to compensate for the lack of real-time manageability at the product, customer and activity levels. However, imagine the consequences of being able to price a service contract on the basis of empirically-assessed, likely costs-to-serve (for new contracts) and historical cost data for each client (for contract renewals). Customers that utilise a service more frequently can expect a price increase next year. (If they don’t want to pay, you are rewarded with less cost). Customers who use a service less have a reasonable right to expect a lower cost next year.  This is not a discount but a generator of fair, repeat business, which is equal to loyalty, the profitability of which is extremely well-researched and published. Certainly such pricing practices will enable you to avoid the downward price spiral that is the mark of commodity markets and your brand will be enhanced through the word-of-mouth voice of the customer..


Every manager I have spoken to on the subject  agrees that we don’t actually want every customer, yet we don’t really know in required detail which ones they are. As alluded to above, I never recommend ever saying “no” to a customer. Let the price speak for itself to such customers that do not deliver a reasonable profit for you – and not forgetting to condition the sales teams to collaborate in this matter. Sales commissions are often important, but if we could link part of the commissions to contract profitability, a lot of poor sales practices based on self-interest would be eliminated. Likewise, as a policy starting point, I never recommend discounting service contracts. It conditions the customer to expect rebates for the entire life of the business relationship. All too often I have heard sales people complain that the service price is too high, yet when asked for context, (i.e. too high in relation to what), they seldom have an answer; a clear indicator of poor sales qualification when they accept the customer’s position without further analysis – even if the price really is too high! (By the way, let’s not forget it is the buyer’s absolute responsibility to get the best deal possible). Further, giving away future cash-flows in multiple year contracts, especially when future costs-to-serve are liabilities that are more often than not difficult-to-calculate, is simply unsound business practice.  It is far better to adjust the Service Level Agreement’s performance parameters and/or the service contents (of the various modules that make up the total service.) in order to reach a price that  is agreeable to the customer. In this context, it is also worth noting that only 1-in-6 to 1-in-8 product sales persons are able to successfully make the transition into services and solutions selling. On the subject of bundling, in the past, whole conferences have been focused the packaging of services.  The services industry, and in particular the IT-Services community has bundled various service modules into the total offering either in order to avoid later (and costly) up-selling, or to facilitate internal cross-subsidisation of  less efficient or attractive modules.  These have then been dressed as “total value packages”. Today, customers are smarter.  They are interested only in specific service modules that deliver specific and tangible benefits and are increasingly allergic to bundled solutions. Yet again we see the need to understand modularisation to create meaningful packages for customers where each component of service has a real, justifiable value proposition.  Failure to do so can so can eliminate us from the competitive race since our focus would appear to remain more on internal considerations, rather than external customer needs.


As partially demonstrated above, pricing has many facets, implications and consequences. It permeates far more than the pricing or marketing processes. An costly investment in pricing expertise and infrastructure can easily be negated by poor selling and discounting practices.  Several years ago, when I was a service executive in a global A-listed company, I was invited to lecture in Service Management at a UK university. I immediately became humbled and  less full of myself and said to the professor, “But I don’t know anything – it’s just common sense!”  He replied “Yes! And common sense isn’t very common!”  So my final piece of advice is to invite the reader to think of himself as the buyer.  Every one of us has a vast experience of being a buyer every day of our lives. We know what we like and what we don’t like. We have an acute sense of what is fair and when we are being taken advantage of. In extreme cases, we decline to buy if we have a choice and resent the seller’s organisation if we don’t! Pricing is thus part of the relationship equation.  So after building on both the science and art of pricing, follow through with a little common sense so that your price can be easily justified with reason and clarity. If we make things too complicated, we can hardly explain things internally, let alone to customers.  Einstein said, ”Everything should be made a simple as possible, but not simpler!”  He also said “If you want to wear the shoes of another, you must first take off your own!” Solid advice from the master who didn’t even have a business orientation!

Kevin Wheatland is an internationally recognised thought-leader on technology services and will be speaking on Life-Cycle Value at the upcoming EPP Aftermarket Forum in June. 

To take advantage of Early Bird registration at 1.100 Euro for the 2 forum days, please contact Nicolene.Barnard@pricingplatform.eu.