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Medi-Cult, a Danish biotechnology company that developed and manufactured a cell culture media. The innovative new media developed was for In Vitro Maturation (IVM) vs. In Vitro Fertilization (IVF). There are considerable differences in the two media primarily in side effects and discomfort to the patient and in the cost of hormones. Medi-Cult now encounters two decisions to deliberate, upon the launch of IVM. First, the pricing strategy to be utilized, skimming or penetrating. Second, the pricing design to contemplate between, multinational, regional, or global pricing. In reviewing and analyzing the data given by the experts, it has been determined that regional pricing would be the best for Medi-Cult. One price for the United States,…show more content…
If the pricing is too high, the volume of patients to be served may decrease, thereby, effecting profitability and availability to all those who need it. Exhibit 4 of this case provides data from experts in the various countries on volume and low, medium, and high pricing. The data clearly indicates that the US market is not price sensitive and volume does not change regardless of pricing. The skimming strategy and pricing in the US at the highest end ($2200/dose) would maximize profit and provide a perceived prestige of the new product. Medi-Cult has a 2-3year timeframe, where it is the pioneer of this product and there are no competitors in the market. If after 2-3 years, competitors enter the market in the US, Medi-Cult has the option of reducing pricing without harm as the profits have possibly covered research and development expense by that time. Since insurance reimbursement varies across the nation and is low, this is not a key factor in making this decision. In addition, the US may have higher shipping costs, expense in complying with FDA regulations and the difference in currency. However, Denmark, France and the UK have varying price sensitivities, free treatments and insurance reimbursement seem superior in these countries. They have more uniform currency with EU. There are 3 scenarios to consider: Pricing such that there is maximum profit in each country, pricing such that there is maximum profit in the region with less cumbersome pricing strategy and third global pricing which may reduce profitability in general. Choosing regional pricing of $1167/dosage does not change the volume for the UK or Denmark and may only slightly change volume for France. This pricing may keep competitors from entering the market quickly as perhaps, it is not as attractive. $1167/dose is the maximizing profit level for the UK and the least impact on

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