1. Client Overview

• ^Industry: Pharmaceutical Wholesale and Retail Support
• Business Size: $3.4B+ annual revenue with extensive pharmacy network operations
• Location: Australia-wide, servicing independent pharmacies, hospitals, and healthcare facilities
• Client Context:
  Sigma operates in a low-margin, high-volume sector. Despite scale advantages, pricing remained heavily reliant on outdated cost-plus models, supplier-led promotions, and generic KVI strategies. The business faced EBITDA margin pressure with gross margin sitting at 7%, well below the 12% levels achieved by peers such as EBOS and Symbion. Strategic pricing structures and capability needed urgent overhaul.

2. Challenge / Problem

• Symptoms Observed:
  
  • Cost-plus pricing dominated internal logic, ignoring SKU-level value differentiation
  • Promotions were largely supplier-funded and not consumer-led, reducing pricing flexibility
  • Existing rebate and wholesale contract structures were exposed to cherry-picking and daily undercutting
  • No clear price pack architecture (Budget, Good, Better, Best) across OTC and FOS ranges
  • Margin leakage between wholesale pricing and retail shelf pricing with limited pharmacy engagement tools
• Strategic Impact:
  
  • Ongoing margin erosion masked by top-line growth
  • Weak price governance and lack of price-to-value integrity in channel pricing
  • Missed EBIT contribution estimated at $25M–$75M annually
• Executive Commentary:
  “The internal pricing capability is not aligned to what we need. We're playing defence on pricing when we should be playing offence with data, models, and strategy.”

3. Objectives of the Engagement

• Quantify and deliver $25M–$75M in EBITDA improvement opportunities
• Build robust pricing strategy, structure, and operational capability within 12 weeks
• Transition from cost-plus pricing to algorithmic value-based pricing at SKU level
• Enhance channel price integrity and Sigma’s value proposition to its pharmacy customers
• Establish internal pricing muscle for long-term margin control and growth

4. Our Approach

• Phase 1: Diagnostic Assessment
  
  • Reviewed historical pricing behaviour and benchmarked against industry best practices
  • Evaluated margin structure across FOS & OTC ranges and supplier-driven promotion mechanics
  • Conducted internal stakeholder interviews and pricing maturity assessments
• Phase 2: Quick Wins & Strategic Design
  
  • Mapped out pricing value logic by SKU, category and pharmacy business model
  • Introduced architecture for price packs (Budget, Good, Better, Best) and price point relativity
  • Developed shelf-to-channel price logic and pricing models for independent pharmacy margin uplift
• Phase 3: Execution Planning
  
  • Created roadmap to rewire override approvals, rebate return on investment (RROI) structures, and margin analytics
  • Defined capability roadmap for algorithmic pricing and value-based governance
  • Designed initial playbooks for sales, merchandising, and category pricing teams

5. Key Actions Taken

6. Results Achieved (Within 10–12 Weeks)

7. Client Feedback

“We needed a pricing engine that matched our size and ambition. The diagnostic gave us a roadmap and the confidence to act. It wasn’t theory—it was a margin blueprint grounded in our data.”
— Head of Merchandise & Marketing, Sigma Healthcare

8. What This Means for Similar Companies

In regulated, rebate-driven industries like pharma and wholesale, margin recovery requires more than tweaks—it demands a complete pricing architecture. Sigma’s journey shows that even legacy systems and commercial inertia can be overcome with the right model, roadmap, and mindset.

9. Contact Us

To discuss how your business could recover up to 900 basis points of EBITDA through strategic pricing resets, get in touch: