case
The Medicines Company - Case Analysis
The Medicines Company is ready to launch a recent drug acquisition, Angiomax, into the market, however its CEO Clive Meanwell is uncertain as to the appropriate price to charge for the drug. Angiomax serves as an alternative drug to heparin, a low-priced anticoagulant commonly used for patients undergoing angioplasty. While Angiomax has proven to be a more effective drug for both high-risk and very high-risk patients, the Medicines Company is challenged by the need to convince customers to pay a steep price premium for this new drug, especially given that heparin is widely accepted and only costs $2 per dose.
Angiomax will be a critical addition to the Medicine Company’s overall product portfolio, and its successful launch has potential to help turn the company around during a time of financial instability. First, the recent IS-159 acquisition turned out to be unsuccessful, leaving the Medicines Company highly dependent on the successful sale of Angiomax. In addition, the company is currently under scrutiny by public investors due to an unexpectedly sharp decrease in stock price. Lastly, managed care organizations and the government are pressuring pharmaceutical companies to lower drug prices given these institutions cover the majority of prescription drug costs for patients. Under these circumstances, it is crucial that Meanwell strategically price Angiomax and tie it’s price directly to a strong value proposition for hospital pharmacists and cardiologists, who make up the key segment that will need to be convinced to pay a premium for the drug.
Recommended Pricing
In order to set the fair price for one dose of Angiomax, it is necessary to estimate the value that Angiomax creates for hospital pharmacists. The clinical trials indicate that Angiomax treatment is more beneficial than heparin for both high-risk and very high-risk patients, thus the first step in pricing is to calculate the average impact on
The Medicines Company is ready to launch a recent drug acquisition, Angiomax, into the market, however its CEO Clive Meanwell is uncertain as to the appropriate price to charge for the drug. Angiomax serves as an alternative drug to heparin, a low-priced anticoagulant commonly used for patients undergoing angioplasty. While Angiomax has proven to be a more effective drug for both high-risk and very high-risk patients, the Medicines Company is challenged by the need to convince customers to pay a steep price premium for this new drug, especially given that heparin is widely accepted and only costs $2 per dose.
Angiomax will be a critical addition to the Medicine Company’s overall product portfolio, and its successful launch has potential to help turn the company around during a time of financial instability. First, the recent IS-159 acquisition turned out to be unsuccessful, leaving the Medicines Company highly dependent on the successful sale of Angiomax. In addition, the company is currently under scrutiny by public investors due to an unexpectedly sharp decrease in stock price. Lastly, managed care organizations and the government are pressuring pharmaceutical companies to lower drug prices given these institutions cover the majority of prescription drug costs for patients. Under these circumstances, it is crucial that Meanwell strategically price Angiomax and tie it’s price directly to a strong value proposition for hospital pharmacists and cardiologists, who make up the key segment that will need to be convinced to pay a premium for the drug.
Recommended Pricing
In order to set the fair price for one dose of Angiomax, it is necessary to estimate the value that Angiomax creates for hospital pharmacists. The clinical trials indicate that Angiomax treatment is more beneficial than heparin for both high-risk and very high-risk patients, thus the first step in pricing is to calculate the average impact on