B Problem Statement Barbara Printup must determine the packaging for Metabical that will best capture the accurately forecasted demand of the target market. With many substitutes for weight loss in a variety of packages and price points, it will be important to create a package that can be priced in a way to both drive sales and continued use of the 12-week drug. Printup must also develop a pricing model to align with the packaging and the price expectations of the target market. Since this is the first prescription drug for overweight people, reference prices are compared to many "non-exact" substitutes that will factor into the price sensitivity of the market. Additionally, unlike other drugs in CPS ' portfolio, it 's unlikely that …show more content…
This would help optimize demand of the product, not leaving profits on the table but also not pricing out consumers who are willing to pay a reasonable price for a weight loss drug. Additionally, this price model is not only the best terms of maximizing profits, but also aligns with CSP’s historical pricing unit. While “doing it how we’ve always done it” is a bad pricing habit, in this case, the analysis confirms that $125 is the best option. This should make her recommendation easier to “sell” internally as well. $150/unit option This option is significantly higher than the reference prices used in analysis, meaning consumers are significantly less likely to purchase it. Knowing this, the 48-202% ROIs calculated the demand models seems inflated and unrealistic. I think this price point could even drop the demand in half, making the ROI look more like $125 analysis. I imagine that consumers would start to compare $150 a month to other things they pay $150 for: a week of groceries, a cell phone bill, a cable & internet bill, gas, etc. They may have hard time justifying the value of the drug at this price point and opt for a lower priced alternative, whether it’s Alli or a gym membership. Conclusion Barbara Printup has done an adequate job creating data related to price models and demand scenarios in order to provide thoughtful analysis for
The utilization of prescription drugs has increased across all age groups in the US, with 50% of Americans taking at least one prescription drug (Rice & Unruh, 2016). This can be attributed to physician-induced demand, substitution of pharmaceuticals for other medical regimens, commercialization of the products, increase in the aging population and drug insurance coverage, and also the increase in chronic conditions. Lathan discusses the startling fact that the rate increase of prescription drugs purchased was considerably higher in contrast to the US population growth - 71% and 9% respectively (Rice & Unruh, 2016, p. 264).
The prices of prescription drugs in the United States are by far the highest in the world. [1] On average, Europeans pay 40% less than Americans for the same medications. [2] Consumers have been resorting to several ways, sometimes putting themselves in harm’s way, to alleviate the burden of high prescription drug costs. Some buy their medications online or cross the borders to neighboring countries so they would be able to afford buying their needed medications. Others have resorted to the illegal act of selling their unused medications in online forums just to recover part of their expenses. Many factors contribute to the increased drug prices in the United States including research and
Competition is one of the major reasons why companies cut the prices of their products and services. If other companies were to charge high prices for their products, this would mean that by reducing prices, the company would attract more customers. Pricing of medicine in most cases does not depend on the available resources, but rather, a decision by the manufacturer.
Lynas, K. (2010, November/December). Canadian pharmacists journal: Universal pharmacare could cut up to $10.7 billion from Canada’s annual drug bill. Notes, 143(6), 262. doi: 10.3821/1913-701X-143.6.262
After a few months of detailed scrutiny of the numbers, we were able to make pricing decisions more quickly by using the breakeven change in volume to set the new price. Based on our broad
affordable, the reform will likely increase the volume of drugs used in the U.S. — prescription rates are likely to rise, as will patients’ compliance to treatments.
Prescription drug prices are on the rise in the United States. Currently, the United States does not implement a price control on prescription drugs. Every day the supply and demand for prescription drugs fluctuates. Pharmaceutical companies produce drugs that are necessary for survival. Therefore, it is necessary for research and development to continue in the United States. Those suffering the effects of exorbitant prices must do so until a generic form of a prescription drug is produced. Once approved by the FDA, new drugs will make their appearance on the market and patients will no longer suffer financially. Until then, it is necessary for pharmaceutical companies to price their drugs based on the idea of supply and demand. This produces the profit used to fund research. Price controls discourage innovation. If a price control were set in place, of course the price of prescription drugs would decrease. However, the development of new drugs decreases with it. Today’s generation would benefit from lower prices, while future generations would suffer from the loss of drug innovation.
Many patients are finding it more difficult to afford their prescription medications. Comparing health care expenditures in the United States, prescription drug costs rank third compared to hospital expenses and physician services (Omojasola, Hernandez, Sansgiry, & Jones, 2012, p. 479). The rising cost of prescription drugs is concerning to many patients. “The high out-of-pocket prescription drug cost is associated with medication non-adherence and adverse health outcomes” Omojasola, et al., 2012, p. 480).
First, I will attempt to analyze the scope of this issue. According to a survey by The Commonwealth Fund, many prices have increased to such a point that in 2012 over twenty-one percent of adult Americans who were prescribed a medication skipped filling their prescriptions or skipped doses because of cost. In addition to this, in a study published in the Journal of the American Medical Association, researchers found that the prevalence of prescription drug use among people twenty and older had risen to fifty-nine percent in 2012. Using the United States Census Bureau, we can find that the United States population in 2012 yielded approximately 315,000,000 American citizens,
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 pharmaceutical costs, the aging population, and increased use of costly specialty drugs. In recent history, increases in prescription drug costs have outpaced other categories of health care spending, rising rapidly throughout the latter half of the 1990s and early 2000s. (Kaiseredu.org, 2012).
Table Of Contents 1.0 2.0 3.0 Introduction Executive Summary Situation Analysis 3.1 Identification Of The Problem 3.2 Market Analysis 3.3 SWOT Analysis 3.4 Target Market Marketing Communication Strategy 4.1 Marketing Communication Plan/Objectives 4.2 Marketing Budget 4.3 Schedule for Key Marketing Communication Activities 4.4 Promotional Strategies 4.4.1 Advertising Strategies 4.4.2 Promotion and Public Relations 4.4.3 Sales Force 4.4.4 Comprehensive Support Program 4.5 Product Strategies 4.6 Distribution Strategies 4.7 Pricing Strategies 4.7.1 Potential Customer 4.7.2 Sales Forecast 4.7.3 Return on Investment (ROI) Conclusion
Third Option – The next pricing strategy involves a pricing strategy where a low price on one product, boosts sales on a separate, but complimentary product. More specifically, Augustine Medical, Inc. could give the heater/blower unit away free of charge. In turn, the organization could set a price on the plastic covers that would yield a high
(1.98 is also reasonable select. Since there is no brand image or loyal customer, it's not big problem to price very low as long as defend VC. Profit is only $4000, but as long as the business continues it's better than nothing.)
Today’s highly competitive business world forces companies to create different tactics and relatively rely on multiple pricing strategies to conduct business.
Competition Based Pricing. The price under this route was determined to be $3,400 (see Appendix C). Under this route, the company will earn more profit per bundle sold. Additionally, minimal effort is required to determine the price. However, the competition based pricing creates indifference between the “Atlantic Bundle” and its competition. The higher price will also reduce market share and could stir a pricing war.