Price Management

Driving Effective and Profitable Pricing

Creating an effective pricing strategy is a challenge for life science manufacturers when there is insufficient data to reveal which strategies have succeeded and which have failed. In addition, the complexity of commercial and government pricing guidelines increases the risk of miscommunication and confusion within the field sales organization.

Delivering the right price at the right time is never straightforward when customers can purchase against multiple contracts. Ineffective pricing causes revenue leakage in the ordering and settlement processes, and may lead to government compliance exposure. For pharmaceutical manufacturers, these problems are amplified by the dynamic pricing methods commonly used on customer contracts.

Model N Price Management

Model N Price Management is designed to solve the problems associated with the pricing life cycle. The software simplifies the creation and management of corporate pricing and discount structures, allowing managers to create and distribute specific guidelines and thresholds for different customer or product segments. These guidelines are tied into the contract creation and management process preventing price erosion and inadvertent best price (BP) violations during offer development.

The software acts as the definitive resource for price information. It uses business rules to determine the correct price for any product, date, and customer combination — regardless of contract pricing complexity, dynamic pricing methods, or overlapping contracts.

Using Information to Drive Better Pricing

Model N’s analysis tools offer insights into sales trends and contract performance.
This information can be used to refine pricing strategies. The software supports the creation and publishing of price lists and price floors offer pre-approved pricing levels, as well as approval thresholds, to use in contract creation. When an offer is created, if prices are offered below the allowable thresholds, or if a price is below a published government price such as BP or FSS, alerts are triggered and approvals are required, ensuring pricing enforcement in the field.

Once a contract is implemented, the software gives users the ability to quickly look up prices for customers and products on any specified date. When there are multiple competing contract options, resolution rules determine how the system will select the correct price. To prevent revenue leakage in the settlement and order-to-cash cycle, the software contains a sophisticated price engine which provides real-time pricing information to ERP systems and other applications that require accurate and unambiguous pricing.

Price Management at a Glance