Value-Based Pricing


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Value-Based Pricing

A method of pricing a product in which one estimates the value of the product to the customer. That is, rather than considering the cost to the company and marking up according to some formula, value-based pricing looks at factors such as how many customers want the product, how badly and how often they want it, and determine the price from these data.
References in periodicals archive ?
The psychology of value-based pricing comes into play when potential participants can judge a difference among programs.
But the biggest problem with value-based pricing isn't how to make the calculations--it's how to explain them to clients.
Value-based pricing makes multi-domain MDM financially feasible
The lab will play a key role not only in gathering and providing relevant data on comparative effectiveness, but also in using it to help develop value-based pricing based on cost and outcomes.
The consultant's recommendations included two alternative pricing strategies to address this issue: product-cost unbundling and value-based pricing.
Figure 1 illustrates valuable insights derived from a value-based pricing experiment with private payers in the United States.
Step 3: Supporting your value-based pricing approach with customized optimization models.
It recommended replacing the current PPRS, where companies can set the initial prices of drugs under a maximum level of profits, with a "patient-focused value-based pricing scheme".
Western European nations also use many different methods to mitigate increases in pharmaceutical expenditures, including reference pricing, parallel trade, profit controls, and value-based pricing.
The study recommends that the current pricing scheme, in which companies are free to set their own prices within very broad profit constraints, is replaced with a "patient-focused value-based pricing scheme" in which the prices the NHS pays reflect the benefits they bring to patients.
Lesser trends identified were value-based pricing and price competition and greater use of the Internet, remote monitoring and scheduling.