Biopure Strategy Analysis Essay

Reimbursement minus the cost of for the transplant will ultimately define the profitability of the transplant program. The current reimbursement level of 140,000 per a case significantly effects the decision to use or not to use marginal cost pricing, as 140,000 per a case provide far greater revenue and helps allocate for the outlier cases. Currently if Boston is receiving $140,000 per a case with an average actual cost of $120, 000 Boston is making a profit, which helps to offset some of the outlier costs. With using total marginal cost the profit will decrease in variations of each fixed percentage scenario including of negative - $30,000 to -$50,000 in profit decrease. However,

When innovations are made, companies sometimes struggle with pricing. The innovations may or may not meet the consumers desires. Medi-cult developed In Vitro Maturation (IVM) technique of making women pregnant. However, the success rate is low. Furthermore, the women are reluctant to repeat the process once the first trial fails. It is also expensive. A major threat to Medi-Cult is the stiff competition by other pharmaceutical companies. Good pricing criteria should be adopted to compete effectively while improving on meeting consumers’ demands.

Finally, if any end-user customers were to adopt the activity-based pricing (ABP) system proposed by O&M, O&M could help hospitals better understand their costs and analyze their processes. This would improve efficiency and reduce waste due to loss, theft and expiration of sensitive medical supplies. O&M would reduce its costs by delivering only what is needed, and the hospitals would be buying fewer unutilized supplies.

There are multiple health concerns worldwide and more and more drugs are needed every day. Many drugs however, are extremely expensive to develop, test, and produce. According to the Tufts Center for the Study of Drug Development (2002), it costs up to $802 million to bring a new drug to the market. In 2002, pharmaceutical companies spent $34 billion in research and development (Center-Watch, 2003). In addition to the costs, the overall time from the discovery to approve and market the drug can take up to 15 years.

Pharmaceutical companies are provided with temporary monopoly rights on the production of new drugs which result in a higher cost on consumers. If competing companies were allowed to produce generic forms of those drugs, consumers will be able to afford those medications even in cases where those consumers have no insurance coverage. The company responsible for developing and inventing the original medication could be offered incentives to invent in the future by either obtaining tax breaks or NIH funding for future research. They could even be offered a percentage of the sales of the generic drugs. Economist Gary S. Becker advocates dropping many FDA requirements that, in his opinion, provide no additional safety measures but rather delay the development of new drugs.[12] Betamethasone, for example, has been part of the standard prenatal care in Europe since the late 1970’s while it got adopted in the U.S. after 1997. On many occasions, the FDA ignores all scientific evidence concerning certain drugs because the manufacturer did not follow their mandated bureaucratic standards.

Cellular respiration: C6H12O6  +  6O2 →  6CO2  +  6 H2O  +  36 or 38 ATP

Questions for the Harvard case “Metabical: Pricing, Packaging, and Demand Forecasting for a New Weight-Loss Drug”

Extremely risky drug discovery and development, lengthening development times which increase development cost, return on investments, and generic competitors.

The MSRP for Allround suggested retail was $5.29, according to the PharmaSim case study, “The manufacturer’s suggested retail price (MSRP) for Allround is relatively high with volume discounts ranging from 25–40%, not including promotional allowances”. Our pricing decision for the PharmaSim simulation we felt was important because consumers have alternatives to choose from and are better informed. Our initial retail price of $5.45 was an increase from the suggested retail of $5.29 to adjust with inflation rate of 3.1%, which boost sales from $355.3 million to $434 million totaling $78.7 million in sales growth. We purchased survey data to help establish the price. Consumers perceived our product being the most effective in cold relief which allowed Allstar to raise the price incrementally and consumers were still willing to purchase the product.

Lowering price as Datril did in the test markets resulted in it capturing almost half of the acetaminophen market. Furthermore, margin per unit revenue (see Exhibit 2) at a retail price of $1.85 and a trade price of $1.05 was still positive, with the introductory retailers deal at $0.70 - cost-plus price. This strategy involved an advertising costing $6 million over 6 months. If Tylenol matched Datril’s price apart from the price war, the advertising campaign would be moot and if changed, require additional expense.

Littlefield Laboratories has opened a new blood testing lab. This laboratory uses the same process as the lab encountered in your prior assignment, Capacity Management at Littlefield Labs—neither the process sequence nor the process time distributions have changed. The lab began operations with a raw materials inventory of 160 kits and $1,000,000 cash. Customer demand continues to be random, but the expected daily demand will not change during the lab’s life span. Expert advisors know that demand will end abruptly on Day 268 and the lab will no longer be necessary. Any remaining machinery or inventory will be useless after Day 268, and thus have no residual value.

There has been a debate if Oxyglobin release should be delayed by two years as it might jeopardize the sales of Hemopure. The concern here is that the estimated price of Oxyglobin ($150 per unit) might not allow Hemopure to be released at a higher estimated price as $600 per unit. As per my analysis this should not be a major concern as the advantages of releasing outweighs this concern. Here are the reasons why Oxyglobin should be released soon in the market:

The central issue at this time was the determination of the list price to hospitals for the heater/blower unit and the plastic blanket. The price set for the Bair Hugger Patient Warming System would influence the rate at which prospective buyers would purchase the system since the market was price-sensitive to alternative methods. Also, price and volume together would influence the cash flow position of the company. Before the company prices this system, several considerations are required in terms of organizational objectives, demand for the product, customer value perception and buyer price sensitivity, the price of competitive offering, and direct variable costs.

According to the Biomimicry Institute,”[Biomimicry] seeks sustainable solutions to human challenges by emulating nature 's time-tested patterns and strategies. The goal is to create products, processes, and policies—new ways of living—that are well-adapted to life on earth over the long haul.” To achieve this goal, industry and science have to come together to decreases toxins, decrease net greenhouse gas emissions, provide multi-use structure, find sustainable sourcing, and use returning logistics to monitor their work all while decreasing overall cost. Unfortunately this is a task even more complicated than it sounds, but with the help of The Biomimicry Institute as well as the majority of other Biomimicry organizations founded by Janine Benyus, Biomimicry is making its presence known more and more in our world today. Going beyond being the founder of multiple organizations, Janine Benyus is also an American natural sciences writer, innovation consultant, and author that recognized the forgotten genius in the natural world. To help others see what she saw, she took the concept of biomimicry and turned it into three key elements: Ethos, Reconnection, and Emulation. She then applied it to everything she could until it grew into the popular movement it is today.

Since the Medi Cult is the “First Company” in this business, they expect they have two or three years advantages by being the first to market. Therefore, the Medi Cult could implement the Monopolistic Power” in the market. The Price discrimination could be applied to this case is the “Third Degree Discrimination”.