Pitfalls in the Valuation of a Pharmaceutical Company

Abstract

We examine how pharmaceutical companies inform the public and financial investors on current and future market-access hurdles for new, innovative medications. Annual reports were explored for the relative attention paid to traditional primary registration data (e.g., efficacy, safety) compared to new data requirements (e.g., cost-effectiveness, budget impact). The results show that new criteria for outcomes and reimbursement policies are cited substantially less often in the annual reports as compared with classic criteria for registration. However, registration is no longer the sole factor for successful future sales, and reimbursement has become an important barrier to sales generation. Therefore, information on positive clinical trials results or registration should be considered positively yet cautiously, and the value can be assessed only after performing a reimbursement scan and sales forecasts modeling for key markets.