Datril Case

The current debate over the Mylan Company’s near monopoly of the epinephrine market through its EpiPen shows what can happen without monopoly regulation. While the cost to produce an Epipen is around $30, the price to the consumer is around $300 each. The economic implications for a family that needs to keep the device on hand to save a life can be excessively high, the emotional results of not having one when you need one are debilitating. This monopoly is further enhanced by state-enforced regulations requiring that schools keep EpiPens in stock and the, so-called, EpiPen law enacted in 2013, which leave little incentive for other pharmaceutical companies to develop their own technology for fast-acting emergency devices. (Bartolone, 2016) Breaking Mylan’s monopoly will not only lead to new product development but lower prices for consumers for a life-saving delivery

In 2015, the pharmaceutical industry spent over 27 billion dollars on advertising. The two greatest components of this effort were promotional advertising and free medication sampling, which the pharmaceuticals invested 15.5 and 5.7 billion dollars respectively (“Persuading the Prescribers”). Promotional advertising involves direct contact with health professionals, the most common being extravagant lunch conferences held for physicians and their staff. On the other hand, sampling involves distributing free sample of medications to physicians, who then have a choice of providing these samples to patients. As a result of these methods, the industry has seen revenue around $400 billion with 90% of physicians having a relationship with a drug company (Campbell 2007). Moreover, the prices of prescriptions continue to rise; a copay of a generic drug is $11.72, preferred brand drug is $36.37 and a specialty drug is $58.37 (Coleman and Geneson 2014). Although the profits are immense in the numbers demonstrated above, it is no surprise when pharmaceutical drug companies elevate their prices even more. For instance, recently Turing Pharmaceuticals raised the price of their medication Daraprim from $13.50 to $750. Keep in mind, this medication is used for threatening parasitic infections, aids, and cancer with alternative options currently found to be inefficient (Pollack 2015). Another example of this practice involves cycloserine, a drug used to

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

During the 1900's, the McNeil company developed and established Tylenol into a well known and recommended analgesic. It has become recognized world wide as a safe brand of acetaminophen. The name Tylenol has become identified as a trusted, safe drug that people can easily purchase over the counter for their ailments. Tylenol is still recommended by doctors even though there was a cyanide scare in the history of the company. It has been discovered by my independent survey that consumers use Tylenol for their pet's needs also.

The drug is so popular that Americans bought 28 billion doses of Tylenol in 2005 (Citation 1). Tylenol should be sold in smaller dose containers, reducing the amount bought at a time. Wholesale clubs should not be allowed to sell acetaminophen in 500 pill bottles, thus giving more of an opportunity for consumers to abuse the drug. Selling Tylenol in small dose containers and limiting how many may be purchased at a time will reduce the amount of pills in the household, therefore, becoming an inconvenience to have to go purchase more. Maybe then people will use Tylenol sparingly to avoid the headache of going to the store for more due to using too much at once. Just by simply reducing the amount of pills available to the consumer, liver damage caused by abuse of Tylenol will

New drugs present an opportunity for new money. People have not seen this before and advertisements on television, in magazines, and online present their drug as some kind of miraculous discovery. The world is constantly changing and improving, we know new and better technology is coming out daily, and we believe the same about health care, to a certain extend we are correct. Over the past hundred years we have drastically improved healthcare, for prescription drugs with a brand name, it needs to be understood that this is a for profit business. Advertised prescription drugs are not a news flash from the medical field, they are a ploy from a pharmaceutical company to encourage consumers to purchase their brand. Aspirin, while having a multitude

WLI executives had two options of pricing. First option was to position Niconil in the same price range as cigarettes. In other words, the expected retail price per unit would be £32.00. On the other hand, second price option was to place Niconil in the premium price range. Under this second option, the expected retail price per unit would be £60.00. Breakeven analysis would be very helpful for examining these two options.

Tylenol was one of the most spectacular success stories in the pharmaceutical industry, because in about 6 year period, the product increased revenue from $50 million in 1975 to more than $350 million in 1981. In 1960 the company promoted Tylenol among doctors and pharmacists as an alternative pain reliever. By 1981, before the Tylenol crisis, the company had 35% market share on the analgesic market, and the company was targeting to achieve 50% for the year 19861. The chart below shows the total revenue growth for Tylenol from 1975 to 1981:

The price difference between name brand and generic are on opposite ends of the scale, and provides an inconvenience to patients that need the drug. Especially for patients that have a low income and cannot afford the drug, and

As time passed, prices of the drug increased while supply diminished. Because of the characteristics that promote stability, “relevant markets are characterized by highly inelastic demand, increasing the firms’ incentives to coordinate because even a small change in supply can have a large effect on price.” (Commission, 2011)

Sales of the OTC Pepcid will affect the revenue and brand recognition of the prescriptions version. Because the drug will be more accessible in common locations like drugstore and department stores with pharmacies like Wal-Mart and Target, consumers are more likely to use the OTC counters. It will decrease the percentages of patients visiting doctor’s appointments for symptoms related to non-serious digestive conditions. The sales of OTC Pepcid will also affect brand recognition because rather than consumers selecting brands that they are familiar with, they are more likely to select products that associate its purpose to their issue. For example, the case mentioned that there are already brands of OTC antacid; however, consumers are more

This crisis resulted in a recall of the Tylenol products on the market and Johnson & Johnson’s executives had to weigh several pressing issues for example, the loss in its market share that made it difficult for the company to take a decision in the cyanide crises. This recall could further seriously put a dent in the intangibles; that may lead to the loss of public confidence and damage to the brand. The competition in the analgesic market was fierce and as such competitors would try to make Tylenol’s loss their

In1982, the incident of Tylenol drug tampering caused deaths of seven individuals in Chicago (Markel, 2014). Cyanide applied on the capsules of acetaminophen was the cause the deaths. Over the counter packaging led to this fatal repackaging of the drugs. Johnson and Johnson spearheaded the uproar of responses by raising an alarm on the purchase of the tampered drugs (Knight, 1982). Bearing in mind that the products were from the company initially, it cushioned the possibilities of more deaths by urging people to boycott the purchase of Tylenol.

According to the article “Originator and generic medicine: pricing and market share” the cost of pharmaceutical drugs accounts for a significant portion of the total health expenditure (Eon Van Der & Brendenkamp, 2013). Pricing strategies are used to create affordable costs, while also providing quality for prescription drug management programs. As part of the goals of pricing strategies, benefit management programs use pharmaceutical benefit managers to negotiate prices, create a savings out of every component of the benefit program, as well as improve clinical outcomes (Jones, 2003). Pharmaceutical benefit managers are used to administer drug benefits on behalf of health plans, and employers (Congressional Budget Office, 2007). The article “Developing an effective generic prescription drug program” by John Jones, discusses a variety of pricing strategies that are offered by pharmaceutical benefit managers. Additionally, the pricing strategy personally recommended by the author will be discussed.

one drug. The economics of its manufacture (high fixed and low variable costs plus economies of