One such company is LIDERM, the Spanish leader in the prevention and treatment of skin pathologies. In 2010, Jorge Serna, who was the general manager of LIDERM, had to make a hard choice about the company’s Micoderm product. Micoderm was made to help prevent and treat diaper rash in both babies and adults. This product was losing money due to a lack of government-mandated price increases. Because the government controls prices, LIDERM couldn’t raise its prices to cover the costs of making its products. Jorge thought about a number of options, such as taking Micoderm out of the Spanish Social Security Reimbursement System (SSRS), asking for a second price increase, or continuing to sell Micoderm at a low price that was set by the government.
The way the government controls prices has put pressure on Spanish labs, especially those that make low-margin products like Micoderm. This has forced these companies to come up with new ways to make money and stay in business. LIDERM could think about raising the price of its product, which would allow the company to make more money per unit sold. Even though this could cause a drop in sales, LIDERM could make up for it by doing more marketing and getting its products into more places.
An increase in selling price would benefit LIDERM and other pharmaceutical companies in several ways. First, it would help them get back their production costs and make enough money to pay for research and development projects, which are important for staying competitive in the market. Second, it would let these companies invest in new technologies and equipment, which would help them make new products and improve their manufacturing processes. Lastly, a price increase would help level the playing field for labs that make low-margin products, making sure they can stay competitive on the market.
Even though raising the price of LIDERM would be good for the company, there are worries that it would hurt consumers. However, this is not necessarily the case. In fact, consumers might actually benefit from a lack of government-mandated price increases. For one thing, a rise in the selling price doesn’t always mean that the final price paid by the customer will go up. This is because pharmacies and distributors are free to set their own prices, and they often do so based on factors such as competition, demand, and supply.
In the end, laboratories in Spain, especially those that make low-margin products like cosmetics and medicines for preventing and treating skin diseases, should raise their prices to stay competitive on the market. LIDERM’s experience with Micoderm highlights the challenges that these companies face, but it also shows that there are solutions available.
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