Pharmaceutical Pricing and Merchandising Quiz

Medical and Pharmaceutical Merchandising

• The course is about Medical and Pharmaceutical Merchandising
• An exam will be held at St Petersburg University
• The exam is 100 marks total
• The continuous assessment is 50 marks
• The final exam is 50 marks
• Test 1 (13/11/2024) is worth 10 marks
• Test 2 (11/12/2024) is worth 10 marks
• Periodical quizzes are worth 15 marks
• Student presentations are worth 15 marks

What Does Pharmaceutical Industry Mean?

• Research and Development:
  • Includes research and development of new drugs and treatments
  • Involves complex scientific studies, clinical trials, and regulatory approvals
  • New technologies, like artificial intelligence, are being integrated into drug discovery and development processes
• Manufacturing and Distribution:
  • Manufacturing involves quality control and adherence to Good Manufacturing Practices (GMP)
  • Distribution ensures timely delivery of pharmaceuticals to healthcare providers and patients
• Marketing and Sales:
  • Marketing and sales are required to reach healthcare professionals and patients
  • Involves promotion, education, and outreach activities

Fundamentals of Medical & Pharmaceutical Merchandising

• Merchandising is crucial for effectively reaching healthcare professionals and consumers

Defining Pharmaceutical Merchandising

• Product Presentation: Pharmaceutical merchandising involves promoting pharmaceutical products to patients and healthcare professionals
• Customer Engagement: Effective merchandising strategies aim to educate customers, leading to informed purchasing decisions
• Value Communication: Evaluation of the value and benefits of pharmaceutical products to enhance patient outcomes

Understanding the Role of Merchandising

• Product Visibility and Awareness: Merchandising effectively takes attention of the customers
• Strategic Placement and Organization: Products should be positioned to maximize customer visibility and encourage purchases
• Information and Education: Merchandising delivers essential product information and educates customers on benefits and usage
• Customer Experience and Satisfaction: A well-designed merchandising experience enhances customer satisfaction and brand loyalty

Importance of Pharmaceutical Merchandising

• Enhanced Patient Outcomes: Effective merchandising promotes patient understanding of medications and treatment options, improving adherence and better health outcomes
• Brand Building and Loyalty: Consistent and high-quality merchandising creates a positive brand image, customer trust, and loyalty
• Increased Sales and Revenue: Attractive displays and engaging presentations can increase product visibility increasing customer purchases, which can increase pharmacy revenue
• Competitive Advantage: It differentiates the product from other competitors through innovative and customer-based strategies which attracts more customers

What to do to achieve effective merchandising

• Target Understanding: Understanding the needs of healthcare professionals and consumers is essential
• Product Differentiation: Highlighting unique product features and benefits
• Visual Appeal: Eye-catching displays and attractive packaging can influence purchase decisions
• Accessibility and Convenience: Products should be easily accessible and conveniently located for customers

Merchandising Strategies for Medical Products

• Strategic Product Positioning: Frequently purchased items at eye level and organize products by category to enhance product reach and discovery
• Comprehensive Product Information: Clear and concise product labels, including key features, benefits, and instructions for use. Use visual aids like diagrams or illustrations to enhance understanding.

Pharmaceutical Merchandising Tactics

• Prescription Management: Prescription refills and enhance patient satisfaction
• Product Bundling and Cross-Selling: Offer bundled discounts for related products, increasing sales
• Over-the-counter (OTC) Product Promotion: Highlighting popular OTC items through eye-catching displays
• Promotional Offers and Discounts: Attract customers with limited-time offers, coupons, or price reductions

Digital and Physical Merchandising

• Enhanced Customer Engagement: Digital tools like interactive displays and mobile apps provide customers with information easily
• Improved Product Discovery: Online resources, such as websites and social media, allow customers to research products and make informed decisions
• Increased Brand Awareness: Digital marketing can extend the product reach beyond the physical store, raising brand visibility

Digital Merchandising Approaches

• Early Websites: Simple online presence with basic product information
• E-commerce Platforms: Online stores allowing customers to purchase medications and health products directly
• Mobile Apps: Convenient access to pharmacy services, medication reminders, and health information
• Social Media Marketing: Engaging with customers, sharing health tips, and promoting pharmacy services online
• Personalized Recommendations: Product suggestions based on individual health needs and preferences

Measuring and Improving Merchandising Effectiveness

• Track: Monitor sales figures, customer engagement, and product visibility
• Analyze: Identify trends, areas for improvement, and successful strategies
• Adjust: Make changes to product placement, displays, or promotions based on data
• Evaluate: Regularly assess results

Key Players in Pharmaceutical Merchandising

• Pharmacists: Dispense medications, provide patient counseling, and ensure safe and effective medication use
• Sales Representatives: Promote products to healthcare professionals, building relationships and driving sales
• Marketing Professionals: Develop marketing strategies, create promotional materials, and manage brand image
• Retail Managers: Oversee pharmacy operations, profit, and implement merchandising strategies

Ethical Considerations in Pharmaceutical Merchandising

• Patient Safety: Prioritizing patient well-being by ensuring accurate information and appropriate medication choices
• Transparency and Honesty: Clearly communicating the benefits and risks associated with medications
• Respect patient decisions: The authority of the patients to make decisions about their health
• Social Responsibility: Considering the impact of merchandising practices on community
• Professional Integrity: Adhering to ethical guidelines and maintaining high standards of conduct

Fundamentals of Commodity Analysis in Pharmaceutical Merchandising

• Commodity analysis in the pharmaceutical industry examines the supply and pricing factors

Understanding the Pharmaceutical Supply Chain

• Raw Material Sourcing: Includes chemicals, APIs, and packaging components
• Manufacturing: Transforming raw materials into finished pharmaceutical products, with quality control standards
• Packaging and Labeling: Packaged products labeled with information ensuring product identification and safety
• Retail and Patient Access: Patients access medications through pharmacies, hospitals, and other healthcare providers
• Distribution: Products distributed to wholesalers, pharmacies, and healthcare facilities

Identifying Key Commodities and their Characteristics

• Active Pharmaceutical Ingredients (APIs): The core therapeutic components of medications, determining their effectiveness and therapeutic action
• Excipients: Non-medicinal substances added to formulations, aiding in stability, texture, and administration
• Packaging Materials: Containers and closures ensuring product protection, integrity, and safe handling

Supply and Demand Factors Affecting Commodities and Their Characteristics

• Supply Factors: Production capacity, raw material availability, manufacturing costs, regulatory approvals, technological advancements
• Demand Factors: Patient needs, disease prevalence, healthcare spending, insurance coverage, competition among pharmaceutical companies

Commodity Analysis in the Pharmaceutical Industry

• Commodity analysis in the pharmaceutical industry examines the supply and pricing factors such as production costs, competition, regulatory changes, and global market dynamics
• This approach is used to evaluate the industry's performance

The factors affecting the commodity analysis

• Supply: Analyzing factors influencing the production and availability of medical products
• Regulations: Understanding government regulations, approvals, and potential changes impacting the market
• Production Costs: Assessing the cost of manufacturing, including raw materials, labor, and facilities.
• Global Market Dynamics: Analyzing international trade patterns, currency fluctuations, and geopolitical factors
• Competition: Evaluating the presence of competitors and their market share

The Compliance with Regulatory Frameworks

• Good Manufacturing Practices (GMP): Ensuring quality and safety in pharmaceutical manufacturing processes
• Labeling and Packaging Requirements: Adherence to labeling and packaging regulations for accurate product identification and consumer information
• Drug Safety Reporting: Reporting adverse events and product defects to regulatory authorities
• Data Integrity and Security: Maintaining accurate and reliable data records

Analyzing Supply and Demand Dynamics

• Raw Material Availability: The availability of ingredients and active pharmaceutical ingredients (APIs) affects production
• Manufacturing Capacity: Production facilities need to be able to scale up or down production
• Distribution: Efficient distribution and transportation crucial for delivery
• Consumer: Patient needs, disease prevalence, and market influence the use of specific medications
• Pricing Policy: Government regulations and healthcare insurance coverage impact medication affordability

Ethical Pharmaceutical Distribution Channels

• Manufacturer
• Distributor
• Wholesaler
• Hospital Pharmacy
• Retail Pharmacy
• Customer

Major Pricing Strategies

• Customer Value-based Pricing
• Cost-based Pricing
• Competition-based Pricing
• Good-Value Pricing
• Added-Value Pricing
• Cost-Plus Pricing
• Break-even Pricing

Customer Value-Based Pricing

• Customer Value-based Pricing strategy determines the price of a product or service based on the value it provides to the customer
• It considers customer willingness to pay for benefits and value received
• Good-value pricing and Added-Value pricing are examples of this

Cost-Based Pricing

• Cost-based pricing strategy sets the price of a product or service by adding a specific percentage or amount to the cost of producing it
• This ensures production costs and profit margin are covered
• Cost-Plus-Pricing and Break-Even-Pricing are two examples of this

Competition-based Pricing

• Competition-based pricing strategy sets prices based on competitors' prices rather than internal costs or customer needs
• Three strategies exist for this approach:
  • Pricing below competitors to attract price-sensitive customers
  • Pricing at the same level as competitors for competition on other factors like quality or service
  • Pricing above competitors to position the product as a premium offering

Fixed and Variable Costs

• Fixed Costs (Overhead): Costs that do not vary with production quantity (e.g., rent, salaries, insurance)
• Variable Costs: Costs that change with production quantity (e.g., materials consumed, commissions on sales, packing expenses)
• Total Cost is the aggregate of Variable and Fixed Costs

Coding of Medical and Pharmaceutical Products

• Accurate coding is crucial for identification, tracking, and management of medical products, ensuring patient safety and compliance with regulations

What is a Barcode?

• Barcodes are visual patterns of lines and spaces (bars and spaces) representing encoded data

Purpose of Barcodes in the Pharmaceutical Industry

• Product Identification: Unique identification of pharmaceutical products for tracking and preventing counterfeiting
• Patient Safety: Preventing medication errors and ensuring patients receive the correct drug
• Inventory Management: Effective stock tracking, enabling timely replenishment in pharmaceutical supply chains
• Traceability: Full traceability of pharmaceutical products from manufacturing to distribution, enhancing accountability and safety

Challenges in Coding Products

• Multiple Ingredients: Accurate and detailed information required for products with multiple ingredients
• Dosage Forms: Different dosage forms (tablets, capsules, injectables) require specific coding
• Combination Products: Coding of combination products that combine drugs or devices
• Specialized Packaging: Precise coding for packaging with unique features
• Regulatory Complexity: Staying updated with regulations and coding standards

Barcode Structure and Elements

• Quiet Zone: Empty spaces on either side of the barcode for accurate scanning
• Start/Stop Character: Special patterns marking the beginning and end of the encoded data
• Data Bars: Alternating bars and spaces representing encoded information
• Check Digit: The last digit used to verify barcode accuracy

Best Practices for Barcode Placement and Readability

• Clear and Accessible: Place barcodes on a flat surface, free from obstructions
• High Contrast: Ensure sufficient contrast between the barcode and background
• Adequate Size: Choose a barcode size suitable for scanning technology
• Correct Orientation: Ensure barcodes are printed straight and level

Barcode Scanning and Data Capture

• Scanner Activation: Activating the barcode scanner, either manually or automatically
• Barcode Alignment: Aligning the scanner with the barcode for optimal scanning
• Data Capture: Scanner reading and decoding the barcode information into a digital format
• Data Transmission: Transmitting captured data to a connected system, like inventory management software