A pharmaceutical company in Utah recently released a new and expensive anti-ulcer drug in the market. The company justifies the high price of the drug by claiming that it is highly effective for treating all kinds of ulcers. The company also claims that the new drug will help bring down the need for invasive surgeries, an additional benefit for patients. Which of the following pricing strategies is the pharmaceutical company most likely using in this instance?
A) target pricing
B) markup pricing
C) cost-based pricing
D) value-based pricing
E) break-even pricing

Question

Quizplus · Accepted Answer

The pharmaceutical company is most likely using value-based pricing as they are justifying the high price of the drug by claiming its high effectiveness and additional benefits for patients. This pricing strategy is based on the perceived value of the product or service to the customer, rather than its production or distribution costs.

A Pharmaceutical Company in Utah Recently Released a New and Expensive