PTR Calculator
What is the Pharma PTR Calculator?
The Pharma PTR calculator is a financial tool used to calculate the profitability potential of a drug. It measures the PTR ratio, which is the ratio of a drug's estimated annual revenue to its total development costs. The PTR ratio is used to evaluate the potential profitability of a drug and helps pharmaceutical companies decide whether to invest in a particular drug development program
Why is the Pharma PTR Calculator Important?
The Pharma PTR calculator is an essential tool for pharmaceutical companies because it helps them evaluate the profitability potential of a drug. Developing a new drug is a risky and expensive process, and pharmaceutical companies must be confident that their investments will yield returns. The Pharma PTR calculator helps companies make informed decisions about which drugs to invest in and which to abandon.
The PTR ratio is an important metric because it helps companies compare the profitability potential of different drugs. A drug with a high PTR ratio is more likely to be profitable than a drug with a low PTR ratio. However, the PTR ratio is not the only factor that pharmaceutical companies consider when evaluating a drug's profitability potential.
How does the Pharma PTR Calculator Work?
The Pharma PTR calculator is a straightforward tool to use. It involves inputting two key pieces of information: the estimated annual revenue of the drug and the total development costs. Once these figures are entered, the calculator will automatically calculate the PTR ratio, which is the estimated annual revenue divided by the total development costs.
| MRP | MRP stands for Maximum Retail Price. It is the maximum price that a manufacturer or supplier can charge for a product or service that is sold to consumers. In many countries, including India, it is mandatory for manufacturers and suppliers to print the MRP on the products they sell. This helps consumers make informed decisions about the products they purchase and also prevents the retailer from overcharging the customers. In other words, MRP serves as a price ceiling or a price limit beyond which the retailer cannot charge. |
| PTR | PTR means Price to Retailer. It is the price at which Retail pharmacy will purchase any medicine from the pharma stockists. It is exclusive of GST. |
| PTS | PTS means Price to Stockist. It is the price at which any pharma company will give its goods to pharma stockists or distributors. It is exclusive of GST. |
P.T.R = (MRP – Stockist Margin) ÷ (100+GST)*100
P.T.S (If Stockist Margin is 10%) = PTR-10%
To calculate the estimated annual revenue, the Pharma PTR calculator uses market data to estimate the number of patients who would use the drug and the price at which the drug would be sold. The market data is based on the disease the drug is intended to treat, the prevalence of the disease, and the current treatment options available.
The total development costs include all the expenses associated with developing the drug, including research and development costs, clinical trial costs, and manufacturing costs. These costs are significant, and they can easily run into the billions of dollars for a single drug.