A large pharmaceutical firm marketed its products in a country where the prices for its products were, to a large extent determined by regional governments. However, various regional governments were assessing numerous scenarios for reducing reimbursement prices for its products. In addition to changes within individual regions, there were interdependencies between their potential actions. For example, if one region would decide to change their reimbursement, other regions were likely to follow. The client did not have a way to quickly and reliably estimate the impact of all possible new regional reimbursement regulations.
EpiX Analytics developed a comprehensive quantitative Monte Carlo model to quickly and accurately assess the sales and bottom-line impact to the client of possible new regional reimbursement regulations. The model considered pricing changing in each region separately (plus interdependencies), including relevant SKU level information and also took into account the uncertainty in the timing of possible regulatory changes.
The client was able to quickly and accurately assess the impact of regulatory changes on various financial and non-financial results over a 3-year period. Since the model is easy to update, the client can also use the model for assessing the impacts of other potential regulatory changes that may arise in the future.