E-Commerce Retailer Suffers Million Dollar Loss In Transportation Accident

Case Overview

This case involves a manufacturer of eco-friendly facial products sold by an e-commerce retailer. The e-commerce company hired a logistics firm to transport and distribute at least $1 million worth of facial products from Canada to California. While en route, the cargo was destroyed due to a temperature control issue. As a result of the incident, the e-commerce retailer had to cease operations due to the loss. An expert in pharmaceutical pricing and supply chains was sought to discuss the sequential markups on the price of such products from the point of manufacture to the end user.

Questions to the Pharmacy expert and their responses

Please briefly describe your work in pharmaceutical pricing.

I am a pharmaceutical industry executive with 23+ years of experience including recent senior roles at a Fortune 100 company. I joined this entity back in 1993 when it held pricing positions through a deal and then after it was acquired by its current parent company. In my last position, I served as the vice president of finance for gross margin planning and strategic pricing. In this role, I was in charge of strategic pricing for $100 billion in annual revenues. I worked with a large range of drugs, including topical products such as creams. I am very familiar with the economic model and what we referred to as the flow of funds, the margins at each part of the value chain. I led negotiations with everyone on the supply side.

How would you describe the sequential markups on the price of such a product from the point of manufacture to the end user?

I can talk about pricing at manufacturers, distributors, PBMs, payers, members, and other stakeholders.

About the expert

This accomplished expert has more than 30 years of experience within the global pharmaceuticals, healthcare, pharmacy benefits management and manufacturing industries. He earned his BA in Accounting & Business Administration and his MBA in Finance from Rutgers University. He previously held positions as the Vice President of Finance, Gross Margin Planning and Strategic Pricing with Express Scripts, among other executive positions. He is currently a Consultant with an Independent Pharmaceutical Firm based out of New York.