Decision I: At what initial price should Angiomax be offered to the market? Which segments should be targeted first? Why?
In order to successfully market Angiomax, The Medicines Company must look at the different segments that may use the drug, and what the value Angiomax could offer to the buyer and to the end user..
Biogen, the company that created Angiomax, studied a number of angioplasty patients during its …show more content…
To buyers, the factors above would also work to reduce their price sensitivity. However, we should have a solid rationale behind our strategy to show the fairness of our pricing, to deliver not only the good reputation but also financial benefit to the hospitals, and to gain a win-win situation for both buyers and the company.
In the case, there are 1,300 medical centers performed angioplasties, 700 of which were responsible for 92% of all angioplasty procedure. The following calculation is for these 700 centers we are going to target.
In Exhibit 2, for we calculate the difference of the cost of complications by using Heparin or Angiomax. For very high risk patients undergo angioplasty a year, by using Heparin, cost of complications is $110,252,800, Angiomax is used, cost of complications is $40,185,600. Total saving for complications is $70,067,200. Divided by 700 centers, each center can save $100,096.
To breakeven the price of Angiomax, in Exhibit 3, for very high risk patients, we use equation is as following:
Cost of Heparin X dose of Heparin/per patient X patients number + cost of complications due to use of Heparin =
Cost of Angiomax X dose of