11. Pricing Strategies (i.e. price skimming, penetration, etc.

)
Pfizer's pricing strategy is primarily customer-oriented, guided by the value that their innovative and
life-saving products bring to patients and society (Pfizer, January 2024) (Pfizer, n.d). They consider
the long-term impact of a medicine, as its benefits may manifest immediately or over months and
years (Pfizer, January 2024). Factors such as the unmet patient need, burden of the disease on
patients, their families, and caregivers, clinical outcomes of taking the medicine, and availability of
other treatments are taken into account (Pfizer, January 2024). They may also account for the
medicine’s potential non-medical benefits, such as returning individuals to work and daily activities,
lowering caregiver burden, and offsetting health care costs such as hospitalization (Pfizer, January
2024).
Unlike any other part of the health care system, medicines have a built-in price reduction mechanism
through the introduction of lower-priced generics and biosimilars/bioidenticals (Pfizer, January 2024).
When a medicine’s patent expires, multiple companies can offer generic or biosimilar versions, which
provide similar health benefits at lower cost while also supporting financial sustainability for health
care systems (Pfizer, January 2024). In 2022, Pfizer's list prices grew below the rate of inflation –
growing 3.7% on average – compared to the 6.5% inflation rate in the United States (Pfizer, January
2024). Looking ahead, the average change in list price growth is projected to be 0% to 3% per year
through 2027 (Pfizer, January 2024).

References:
Pfizer. (n.d.). Pfizer’s Approach to Medicine Pricing. Retrieved from
https://cdn.pfizer.com/pfizercom/The_Value_of_Medicines.pdf.
Pfizer. (n.d.). Prescription Value & Pricing. Retrieved from https://www.pfizer.com/about/programs-
policies/prescription-value-and-pricing.

11. Pricing Strategies (i.e. price skimming, penetration, etc.)

Pfizer's pricing strategy is primarily customer-oriented, but elements of both price skimming and
penetration pricing can be observed in their approach.
Price Skimming: Pfizer's innovative products often enter the market with higher prices, reflecting the
substantial value these products bring to patients and society (Pfizer, January 2024) (MBA Skool
Team, n.d). This is similar to a price skimming strategy, where high initial prices are set to recover the
costs of development and capitalize on the period of low competition (Reactev, 2021). However,
Pfizer's approach is more nuanced, considering factors such as the unmet patient need, burden of the
disease, clinical outcomes of the medicine, availability of other treatments, and potential non-medical
benefits (Pfizer, January 2024).
Penetration Pricing: Pfizer also demonstrates aspects of penetration pricing. They engage in complex
negotiations resulting in payment of fees and discounts to entities across the supply chain to secure
maximum affordable patient access (Pfizer, January 2024). They also offer patient assistance
programs for those who can't afford to buy their medicine (Pfizer, n.d). This approach is similar to
penetration pricing, where lower prices are set initially to gain market share.
In conclusion, Pfizer uses a blend of pricing strategies tailored to the unique circumstances of each
product and market. Their primary goal is to maximize patient access while also ensuring the financial
sustainability of their business (Pfizer, January 2024) (Pfizer, n.d).

References:
- Pfizer. (n.d.). Pfizer’s Approach to Medicine Pricing. Retrieved from ¹
- Pfizer. (n.d.). Prescription Value & Pricing. Retrieved from ²
- Reactev. (n.d.). The advantages of using a price skimming strategy in your. Retrieved from ³
- Pfizer. (n.d.). Lowering Medicine Prices. Retrieved from ⁴

Source: Conversation with Bing, 1/4/2024

(1) Pfizer’s Approach to Medicine Pricing.
https://cdn.pfizer.com/pfizercom/The_Value_of_Medicines.pdf.
(2) Pfizer Marketing Strategy & Marketing Mix (4Ps) | MBA Skool.
https://www.mbaskool.com/marketing-mix/products/16998-pfizer.html.
(3) The advantages of using a price skimming strategy in your ... - Reactev.
https://www.reactev.com/blog/advantages-applying-price-skimming-strategy-ecommerce.
(4) Prescription Value & Pricing | Pfizer.
https://www.pfizer.com/about/programs-policies/prescription-value-and-pricing.
(5) Global Vaccine Differential Pricing Approach - Pfizer.
https://cdn.pfizer.com/pfizercom/health/vaccines/PFE_Global_Vaccines_Tiered_Pricing_Approach_0
3MAR2018.pdf.
(6) Pricing - Pfizer 2018 Annual Review.
https://www.pfizer.com/sites/default/files/investors/financial_reports/annual_reports/2018/our-
business/understanding-external-environment/pricing/index.html?ref=home.