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This paper seeks to clarify the use and limitations of the IMS National Disease and Therapeutic Index database, which is frequently used by scholars and courts to provide insights into pharmaceutical markets. Specifically, the paper aims to discuss appropriate and inappropriate uses of the data and details the limitations as a means of drawing generalizable conclusions.

The paper takes the form of a literature review and critical evaluation of data and its uses.

The IMS NDTI can provide useful insights into pharmaceutical markets, and also provide indications of potential trends or behaviors, but cannot be relied on for conclusive evidence of such phenomena in the marketplace. The NDTI has limitations that result from sampling and design issues, as well as the specific method by which the data are collected and coded. Although IMS is clear and forthright in addressing these limitations, many researchers have apparently chosen not to heed these cautions and have drawn unsupportable conclusions from NDTI data.

The implications of drawing inappropriate conclusions from the NDTI database can range from the development of a crucial misunderstanding of the market by pharmaceutical marketers, the establishment of erroneous theories or assumptions into the literature or even the miscarriage of justice when the data are used as the basis for a legal judgment or claim. Users must be cautious when drawing any conclusions from these data.

The price of a product or service must reflect and capture the value delivered, but the bulk of attention paid to the area of value determination is to methods of calculating value. This approach ignores the less tangible but equally or more important aspects of value that often drive decision-making, aspects that don’t lend themselves easily to the metrics many believe are essential to solving the pricing puzzle. Pricers, to be effective, must understand how to identify these nonmetric aspects of value and incorporate them into their pricing decisions. This chapter provides a foundation for determining the sources of value of a product or service, tools and models that can be used to determine and understand value, and commentary on ways to capture this value through pricing.

In terms of the life cycle, pricing certainly would be considered a young and emerging discipline, only a few decades old. Even marketing is only 50 years old as a business discipline; Jerome McCarthy of Michigan State University introduced the Four P's classification (product, promotion, price, and place-distribution) in 1960. Peter Drucker's influential The Practice of Management hailed the twentieth century as a “marketing revolution” in 1954, but mentions pricing fewer than a dozen times, even then only in passing.

George E. Cressman, Jr. is President and Founder of World Class Pricing, Inc. George spent 30 years in industry, and has been consulting in marketing strategy, competitive strategy, and pricing for 15 years. George provides marketing and pricing solutions for global business-to-business and business-to-consumer firms. George has been named Marketer of the Year by the American Marketing Association, and is a frequent speaker in management education programs.