The Successful Launch and Diffusion of New Therapies - Innovation and Marketing in the Pharmaceutical Industry - page 201

products must consider several dynamic factors such as the discovery of new uses
for the drug, the drug's dosing, efficacy, and side effects, and the price of the drug.
Conjoint analysis can provide pharmaceutical companies with this type of
information.
Several studies have focused on conjoint analysis in the context of healthcare.
Kontzalis ( 1992 ), for instance, proposes a model to forecast the potential market
share of a new pharmaceutical drug for Sandoz Pharma AG. The model considers
physicians' decision-making process, taking into account their attitudes and needs
as well as the drug's clinical profile. In this paper, the author first identified the key
attributes physicians consider important in selecting drugs that treat certain condi-
tions, and then, using a conjoint analysis, measured the relative importance of each
attribute. Specifically, for the therapeutic category investigated in this study, the
attribute “low irreversible toxicity” was found to be 3 times more important than of
the attribute “low side effects,” while the latter was found to be 5 times more impor-
tant than of the attribute “easy to administer.” In the next step of the study, the author
simulated the therapeutic category market shares based on the clinical profile of the
new product and its competitors.
In another study, Kellett et al. ( 2006 ) used a conjoint analysis to investigate
patient preferences for acne vulgaris treatment. The conjoint analysis examined five
different attributes of such treatment: form, storage, product life once opened,
method of application and regimen. Although this research was conducted with the
purpose of enhancing patient compliance, it demonstrates the applicability of
patient-based conjoint analysis in predicting the adoption of new pharmaceutical
drugs.
Conjoint analysis has also been used to assess the tradeoffs young girls make
between various aspects of HPV vaccination, such as protection against cervical
cancer, protection duration, risk of side effects and age of vaccination (de Bekker-
Grob et al. 2010a ). De Bekker-Grob et al. ( 2010b ) have also looked at patients'
preferences for both labeled and non-labeled screening tests. Kruijshaar et al.
( 2009 ) examined the trade-off patients make between the burden of testing and the
expected health benefits in the context of regular endoscopic surveillance. Studies
such as these guide managers as well as policy makers in the pharmaceutical
industry.
If one of the product attributes affecting customer preferences is price, conjoint
analysis can assist pharmaceutical firms in assessing patients' willingness to pay
and thus provide them with a valuable tool in determining the price of a new drug.
Singh et al. ( 1998 ) have conducted a conjoint analysis among patients for growth
augmentation therapy. One of the five attributes they assessed was the yearly out-of-
pocket cost of the drug ($100, $2,000, or $10,000). Their findings suggest that cost
is among the most important factors in patients' preferences, outweighed only by
long-term side effects. Moreover, once the utility partworths are derived from the
conjoint analysis, the preference trade-offs among the different drug attributes can
be used to assess consumers' willingness to pay for different drug profiles, as well
as to simulate market shares given those profiles for different price levels.