...in the news for raising the price of prescription drugs. The price of Daraprim, a drug to treat toxoplasmosis, was increased by over five thousand percent. The increase has sparked people from both the AIDS and cancer organizations to reach out and attack the ethics of Chief Executive Officer, Martin Shkreli through social media. The increase in price may prevent hospitals from having treatment available for patients who need it. The practice of price gouging prescription drugs has now become an important political topic many candidates running for President of the United States in 2016 will be talking about. Significance of a Solution Recognizing that developing, manufacturing, and marketing pharmaceuticals is a very profitable business, the case of Turing Pharmaceutical’s purchase and marketing of the drug Daraprim spotlights a potentially serious issue with the way some companies “repackage” existing drugs to create higher profit margins. Daraprim (Pyrimethamine) was originally approved January 23, 1953 for the treatment of toxoplasmosis, an infection caused by a very common parasite (U.S. Food and Drug Administration, n.d.). Because most people never exhibit symptoms of this disease, sales of this drug were very small; and, no generic drug company ever bothered to duplicate the formula (Mayo Clinic, 2015). Seizing the opportunity to “corner the market” on this drug, Turing Pharmaceuticals purchased the rights and immediately raised the price from $13.50 per tablet to...
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...rP os t 4183 APRIL 14, 2010 JOHN A. QUELCH HEATHER BECKHAM op yo Metabical: Pricing, Packaging, and Demand Forecasting for a New Weight-Loss Drug In April 2008, after 10 years of testing and $400 million in research and development costs, Cambridge Sciences Pharmaceuticals’ (CSP) newest prescription drug, Metabical (pronounced Mehtuh-bye-cal), was about to receive its coveted Food and Drug Administration (FDA) approval. CSP was an international healthcare company with over $25 billion in sales in 2007. The company, based in Cambridge, Massachusetts, focused on developing, manufacturing, and marketing products that treated metabolic disorders, gastrointestinal diseases, and immune deficiencies, as well as other chronic and acute medical conditions. Metabical was part of a strategic initiative that would allow CSP to enter the $3.74 billion market for weight-control products in the United States.1 tC CSP’s chief marketing officer, Bernard Long, said of the new product: No Metabical is revolutionary. It will be the first and only prescription drug to receive FDA approval to meet the needs of the millions of individuals struggling with moderate weight-loss goals. Previous prescription weight-loss drugs had negative side effects that, in the agency’s judgment, outweighed the benefits provided to individuals who were not considered obese. Metabical will be approved for use by those looking to shed between 10 to 30 pounds. Initial reviews...
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...METABICAL CASE ANALYSIS Metabical is a prescription drug produced by Cambridge Sciences Pharmaceuticals (CSP) for weight loss, which was the first and only prescription drug to obtain FDA approval. The drug was developed to help aid people in the overweight segment to lose 10 to 30 pounds. Barbara Printup is the marketing director in charge of selecting a price for the new prescription drug. In a study CSP did with Metabical, people with a body mass index (BMI) of 28 to 30 had an average weight loss of 26 pounds over a 12 week period. At the same time, people with a BMI of 25-28 had an average weight loss of 15 pounds. This study found the new prescription drug to be useful and effective. Through research, Printup decided to target female consumers in the 35 to 65 age range with a college education. Metabical was also basing pricing and packaging compared to their main competitors in this particular market. CSP wanted to base their new product comparable to Alli, but felt Metabical could be priced at a premium due to the need of a prescription to get the drug, and the fact that they were the only FDA approved weight loss drug on the market. Pricing was a main concern with this product and several scenarios were run to try and project and forecast where the pricing would make the best return on investment (ROI). In order for the drug to be able to show positive results it is recommended that it should be taken daily for 12 weeks, without a single miss just like birth control...
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...from the Los Angeles Times, it is estimated that 100 people die every day from drug abuse or overdose. Abuse or overdose being defined as taking more medicine than a doctor prescribes, or taking medication not prescribed to the victim. These totals don’t even include deaths related to side effects from other prescription drugs, and those reach over one hundred thousand people annually. These numbers have alarmed the Centers for Disease Control and Prevention (CDC), but rightfully so because from the years 2000 to 2009 the report states, “The percentage of poisoning deaths among those aged 15–19 years with prescription drugs as a contributing cause increased from 30% in 2000 to 57% in 2009.” There are many different speculations that would drive such a rapid climb, such as music and lifestyle, accessibility to the drugs, and affordability for many teenagers. Agencies like the CDC and US Food and Drug Administration (FDA), are working together with the White House to reside this issue by improving education of healthcare professionals, using state prescription monitoring programs, and proper disposal of controlled substances by business trade and the public. I agree with Obama in that there are steps that need to be taken to help end this recent issue in society. Although, I believe there are other ways to go about it and the first is to federally decriminalize marijuana. Prescription drug abuse has been recognized since the 1980’s, but it hasn’t received as much attention...
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...because of the revenue brought it. An economist would increase the cost of alcohol through additional taxes and would reduce availability of alcohol. Therefore, one solution to the problem is to make the long term objective into raising the prices of alcohol through taxation. It is not possible to charge taxes solely on alcohol abusers. According to Hein “tax increases will cause welfare losses for moderate drinkers through a reduction in consumers' surplus. If moderate drinkers have lower medical care costs, medical insurance premiums will be lower for abstainers, resulting in a positive externality for nondrinkers. That insurance consequence, plus the loss in consumers' surplus, makes the calculation of the social cost of alcohol abuse alone inappropriate for evaluation of increased taxation.” Studies show that the price of alcohol is an influencing factor among youths and young adults drinking alcohol, it reduces drinking and driving in all ages, it lowers the frequency of diseases, injuries, and deaths related to alcohol use and abuse. 2. The rise in costs of prescription medicines affects all sectors of the health care industry, including private insurers, public programs, and patients. Spending on prescription drugs continues to be an important health care concern, particularly in light of rising...
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...Ethical Responsibility in Pharmacy Practice Robert A. Buerki, Ph.D. Professor Division of Pharmacy Practice and Administration The Ohio State University Louis D. Vottero, M.S. Professor of Pharmacy Emeritus Ohio Northern University American Institute of the History of Pharmacy Madison, Wisconsin 2002 Acknowledgments: Pages 208-10: "Principles of Medical Ethics" and "Fundamental Elements of the Patient-Physician Relationship," reprinted with permission from the Code of Medical Ethics, American Medical Association, © 1994 and © 2000. AMA logo reprinted with the permission of the American Medical Association. © 2002 American Medical Association. Usage of the AMA logo does not imply an endorsement of the non-AMA material found in this book. Page 211: "Code of Ethics for Nurses with Interpretive Statements," reprinted with permission from the American Nurses Association, © 2001 American Nurses Publishing, American Nurses Foundation/American Nurses Association, Washington, D.C. Pages 212-15: "A Patient's Bill of Rights," reprinted with permission of the American Hospital Association, © 1992. Pages 216-17: "Pharmacy Patient's Bill of Rights," reprinted with permission of the National Association of Boards of Pharmacy. On the cover: The "triad of medical care" has been the basis for the ethical relationship between the pharmacist, the physician, and the patient for centuries. In the background, an early depiction of the triad from Book 7 of the encyclopedia...
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...Case Study: Merck Acquisition of Medco Professor Daniel Weiss FI561 January 23, 2011 DeVry University Case Study: Merck Acquisition of Medco Abstract The purpose of this case study is to determine whether it would be beneficial to merge Merck Corporation with Medco Containment Services Incorporated. The merger and acquisition between the world’s largest drug manufacturer and the largest prescription benefits management company (PBM) and marketer of mail order medicines in the United States would result in a successful campaign to take over the drug industry if handled appropriately. As Chairman and CEO of Merck Corporation, I have to consider all sides of the arguments, financially, marketing and cultural wise and come to a conclusion as to whether this merger would be a good idea for the company. Like any other investment and merger, there are risks, and I have to decide what would be best in the interest of this company. The details as to whether the decision to acquire or not acquire Medco will be described in this paper. Along with data that helps make that final decision. There are a few things one must take into account before making a decision. You have to look at the long term run, whether or not the merger and acquisition will be successful. You also have to take synergy into account; it is the most important reason why there are a lot of mergers and acquisitions. Synergy would be when two companies join forces to create additional value and cut costs...
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...Marketing Assignment YP53B – Metabical Price M. Ray Akbar Mutalibov 29115113 For the case study of Metabical Price, I would recommend Option 2 ($125 in 4-week supply) as the price recommendation. This recommendation decision was mostly made of target return pricing, but combined with a little bit element of value-based pricing and psychological pricing. The reason I would choose the target return pricing as a main tools to pick the price is because the CSP’s Metabical informed us that they wanted to achieve a minimum 5% ROI within five years of the new product’s launch. Thus, target return pricing was picked since this kind of pricing would set a price based on the achieved target of ROI. The reason why I include value-based and psychological pricing would be explained later in paragraph below. Based on the calculations from Metabical Worksheet, I get several different results of ROI in 5 years, based on different method and different manufacturer gross margin. For the ROI’s manufacturer gross margin of $24,8, I have 210% (Method 1) and -26% (Method 2). For the ROI’s manufacturer gross margin of $58,13, I have 627% (Method 1) and 74% (Method 2). For the ROI’s manufacturer gross margin of $74,8, I have 835% (Method 1) and 124% (Method 2). There were 2 different method in my worksheet calculation, the first one is Method 1 which taken the US’s overweight population who actively trying to lose weight and comfortable using diet pills into potential customer. The second one...
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...Marketing Strategies of Pharmaceutical Company: A Study on The ACME Laboratories Ltd. Abstract In the modern world, Bangladesh’s pharmaceutical industry plays a vital role. For pharmaceutical company there are some limitations on product promotion through the mass media, such as radio, TV and/or News paper. Thus, the total marketing system depends on marketing team. This paper presents the findings of the study conducted on the ACME Laboratories Ltd. to examine the marketing system. This study reveals that the ACME Laboratories Ltd.’s products are consumed allover the country and also globally. Their motive is to maintain the quality of the product to cope up with the existing competition. Their objective is to treatment the disease, they also set a reasonable price by considering the middle class people to get some benefit from the ACME Laboratories Ltd. They follow all possible distribution channels to make their product available to the customers and at a comfortable place. The ACME Laboratories Ltd. has also endeared to strength its network in international marketing operation to export products abroad. The company provides some motivational tools to the internal sales team. The company provides fringe benefit to these people. It is the most successive tool for the company. From the study we find that the ACME Laboratories Ltd. is a socially responsible company, and practice ethical values. From the study it has appeared that the ACME Laboratories Ltd. is facing some minor...
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...will remedy their success on the management strategies that they have managed to employ in the success of their business. Strategic management is the interpretation and presentation of management techniques and strategies by managers in utilization of resources, enhancing the external and internal environments and ensuring a company market share so as to maximize on profits. We shall evaluate the strategic management of Johnson and Johnson. Through the analysis, major market and business strategies of the company shall be evaluated with the current external and internal business environment. Table of Contents Johnson and Johnson Strategic Management Analysis 1 Contents 1 Chapter 1 3 1.1 Executive Summary 3 1.2 Scope of the Case Study 3 2.1 Company Background 4 2.2 Vision and Mission Statements 5 2.3 Strategies 6 3 TASK A: External Environment 8 3.1 Specific Environment 8 3.1.1 Porters Five Forces 8 Figure 1 9 3.2 Generic External Environment 12 3.2.1 Pestel Analysis 12 3.3 Impacts on the industry: Threats and Opportunities 13 4 TASK B: Internal Environment 16 4.1 J&J SWOT analysis 16 4.2 Summary of Strengths and Weaknesses 17 5 Financial Analysis 19 5.1 Profitability Ratio analysis 19 Liquidity Ratios 21 6 Data Analysis 22 7 Recommendations 23 References 25 Chapter 1 1.1 Executive Summary The strategic management analysis of Johnson and Johnson Company is looking to analyze at the strategic performance...
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...MK501E INTERNATIONAL CONSUMER ------------------------------------------------- BEHAVIOUR ------------------------------------------------- CASE STUDY N°1 I. Introduction Cambridge Sciences Pharmaceuticals (CSP) is an international health care company that focus on developing, manufacturing, and marketing products that treat metabolic disorders, gastrointestinal diseases, imm une deficiencies, and other chronic and acute medical conditions. The company captured over $25 billion in sales in 2007. CSP created Metabical, what would be the first prescription drug approved by the FDA specifically for overweight individuals (those with a BMI of 25 to 30). Its compounds produce dramatic weight loss for overweight individuals. It works on a low-dose formulation, therefore reducing damages to heart and liver functions. Negative effects of the drug occurred when taken while consuming high levels of calories and fat. Metabical is intended to be taken during a 12-week treatment. The estimated retail price for the drug would be approximately $3 to $5 per day, so that would sum up to $1,800. Many health care insurance companies don’t cover weight-loss drugs in their plans. Direct competition includes over-the-counter (OTC) drug Alli (a reduced-strength version of the prescription drug Xenical), approved by the FDA for weight-loss use. There are a number of liver damage reports of people who have been taking Alli and Xenical being currently investigated by the FDA. ...
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...Cost of Prescription Medications Jill Stanley Seattle Pacific University Health Care Delivery Models NUR 4944 July 19, 2014 Most everyone knows that the United States has the leading role when it comes to health care spending and pays out almost one thousand dollars per person per year on pharmaceuticals (Paris, 2014). Sadly, while the financial burden is high for the average family, many Americans are not taking their recommended medications because of the high costs. One in five Americans skip doses because of the cost (Paris, 2014). While there are many things nurses can do to enhance prescription medication compliance, understanding costs and helping implement ways in which patients can control costs, while promoting better outcomes, is critical. The United States spends almost 800 dollars a unit per population on prescription drugs, more than any other country and almost twice the average of 401 dollars per capita (OECD), (Ginsburg et al., 2009, p. 28). Prescriptions account for 17% of all privately insured health care costs and 25.4% of out of pocket spending according to Health Care Cost and Utilization Report (HCCI): 2011. Brand name or patented drugs have increased in price by 17.7% from 2010 to 2011 and generic drugs have actually decreased in cost by -7.2% for the same years from the same HCCI report. Generic drugs have had an increase in utilization from consumers’ while brand name has decreased and this is why pharmaceuticals have raised prices on the...
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...Prescription of Drugs [Name of the Writer] [Name of the Institute] [Name of the Supervisor] The growing epidemic of addiction to prescription drugs is now the new one. Throughout North America, this problem affects people of all ages, all backgrounds and all income. However, despite the attention it generates, it is often difficult to determine the existence of a problem. Unlike illegal drugs sold on the street, prescription drugs are generally safe, and they can be very useful when a doctor prescribes and monitors their use. Doctors recommend medicine to treat a wide range of physical health and psychological problems. More than 50% of drugs are not prescribed, dispensed or sold as it is and half of patients do not take their medicines properly. Excessive consumption, inadequate or incorrect medication is harmful to people and squanders resources. More than 50% of countries do not implement basic policies to promote rational use of medicines. In developing countries, less than 40% of patients in the public sector and less than 30% in the private sector are treated according to clinical guidelines (Colliver et al., 2006). Although some drugs have serious adverse side effects, doctors prescribe when the benefits outweigh the risks (Cohen, 2000). If taken as prescribed, medication can help relieve chronic pain and other health problems, enabling people to live a normal and productive life. When a person undertakes short-term counseling, physiotherapy or other...
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...visit. * An increasing number of people are taking drugs to control chronic conditions, so more people have a stake in assuring a productive pharmaceutical industry. * There are some very aggressive marketing practices by major pharmaceutical companies. * There are extremely high out-of-pocket prescription drug expenses for some people. * The rate at which pharmaceutical expenditures have increased over the last ten years brings the industry to the forefront of policy debates over healthcare cost containment. * The instances of government approval of drugs that were shown to have dangerous side effects and the reluctance to remove dangerous drugs from the market. * Frequent prescribing of expensive drugs when evidence suggests that older, less expensive products would be as equally effective. When firms develop new products, they can apply for a patent. Upon receiving a patent, it prevents other firms from selling that product for twenty years. During the seventeen years, the developing firm can is protected from the competition and can charge higher prices and make large economic profits. Patents foster new inventions by rewarding inventors for the expense and risk of bringing new products to the market. There is only one firm producing the product so it is a monopoly, the firm's demand curve is identical to the market demand curve. The monopoly firm does not have to worry about competitor's prices so the monopolist will continue to sell units as long...
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...that OTC product can maintain in the market for a much longer time, because consumers have the tendency to self-diagnose their common ailments, and obtain a drug without prescription. Secondly, Pepcid is a safe drug, and its indication is a common chronic problem in public that is relatively easy to self-diagnose and self-treat. By making such a drug an OTC product, the company can gain access to a larger consumer base and thus gain more profit. Pepcid as a prescription drug has already gained its market as a brand name drug. This creates a demand for the general public for OTC version of Pepcid. Additionally, usually FDA takes several years to process the approval of a prescription-to-OTC switch. Before the patent expires, JJM can take the advantage of patent protection and enter the OTC without competition and thus occupy a larger consumer market earlier. Factors include indication, drug safety, and brand awareness. The indication has to be a common and relatively less severe condition that many patients tend to self-diagnose and self-treat, to ensure the primary demand from the OTC market. There has to be sufficient data to show that the drug does not have serious safety issues even if not closely monitored by a physician. A company should also consider the brand awareness. JJM should allow sufficient time for the drug to be accepted as a...
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