The Medicines Company is a newly formed firm that has interesting business model. Medicines Company acquires drugs that have been abandoned from other pharmaceutical companies due to lack of early state research results. Medicines Company’s success relies on their ability to save “rejected” compounds, receive FDA approval for their used, and to make a profit of the drug. This case study mainly focuses at the first years of this new startup company, mainly on the initial review of their first “saved” drug called Angiomax. Angiomax is a former abandon anticoagulant drug of Biogen. Biogen drop the researches of this drug due to them not believing the benefits did not outweigh the costs.
One of the many challenges that Medicines Company has …show more content…
From the case, the total number of angioplasty patients is 700,000 patients. Since Medicines Company only investigates 92% of all angioplasty procedures, we need to multiply by 0.92. And since Angiomax will be positioned to be used by high and very high risk patients we must also take that into account.
From the case, we know on average 50% of angioplasty patients are considered “high risk” and 10% are considered “very-high risk .” Therefore Angiomax has the possibility to affect 60% of all angioplasty patients that Medicine Company investigates. The below math, show how we get to the total amount of patients.
Total Patients that used Angiomax=(700,000 total angioplasty Patients)(% investigated by MC)(% of High or Very High Risk Patients)
Total Patients that used Angiomax=(700,000)(0.92)(0.6)
Total Patients that used Angiomax=386,400
With total patients found, we can now calculate the difference of patients that experiences some complication while using Heparin or Angiomax. Each of these patients will cost $8,000 to the hospital. The difference in the number patients with the above complications between using Heparin and Angiomax is calculate below by using Table B and Table see from the case.
Table 1: Table C from Case. Results for "Very High Risk" Patients
Outcome within 7 Days of Treatment Heparin (372) Angiomax (369)
Death 0.5% …show more content…
Patients * # of Total Patients= Total Add. Patients: “High Risk” or “Very High Risk”
Very High Risk
(13.6%)(10%)(92%)(700,000)= 8,758.4 additional patients
High Risk
(7%)(50%)(92%)(700,000)=22,540 additional patients
Additional Cost incurred by using Heparin= ($8,000/patient)(8,758.4+22,540)= $250,387,200
Now that we have the total amount of projected patients and the total additional cost incurred by using Heparin, we can now find the price ceiling that Medicines Company should use for Angiomax.
From the case the cost of Heparin is $2 a dose and the patient is required only 1 dose. For Angiomax, 70% of the patients require 1 dose while the other 30% needs 2.5 doses bringing the average dose for each patient to 1.45.
(Cost of Heparin)+(Additional Cost Incurred by using Heparin)=(Cost of Angiomax)
(1 dose*$2/dose*386,400 patients)+($250,387,200)=(1.45 dose/patient*x/dose*386,400 patients)
Cost of Angiomax=$448.28
From the information given in the case and the above formulations the price ceiling for Angiomax is $448.28, which is the maximum price per dose that Medicines Company can charge
One of the many challenges that Medicines Company has …show more content…
From the case, the total number of angioplasty patients is 700,000 patients. Since Medicines Company only investigates 92% of all angioplasty procedures, we need to multiply by 0.92. And since Angiomax will be positioned to be used by high and very high risk patients we must also take that into account.
From the case, we know on average 50% of angioplasty patients are considered “high risk” and 10% are considered “very-high risk .” Therefore Angiomax has the possibility to affect 60% of all angioplasty patients that Medicine Company investigates. The below math, show how we get to the total amount of patients.
Total Patients that used Angiomax=(700,000 total angioplasty Patients)(% investigated by MC)(% of High or Very High Risk Patients)
Total Patients that used Angiomax=(700,000)(0.92)(0.6)
Total Patients that used Angiomax=386,400
With total patients found, we can now calculate the difference of patients that experiences some complication while using Heparin or Angiomax. Each of these patients will cost $8,000 to the hospital. The difference in the number patients with the above complications between using Heparin and Angiomax is calculate below by using Table B and Table see from the case.
Table 1: Table C from Case. Results for "Very High Risk" Patients
Outcome within 7 Days of Treatment Heparin (372) Angiomax (369)
Death 0.5% …show more content…
Patients * # of Total Patients= Total Add. Patients: “High Risk” or “Very High Risk”
Very High Risk
(13.6%)(10%)(92%)(700,000)= 8,758.4 additional patients
High Risk
(7%)(50%)(92%)(700,000)=22,540 additional patients
Additional Cost incurred by using Heparin= ($8,000/patient)(8,758.4+22,540)= $250,387,200
Now that we have the total amount of projected patients and the total additional cost incurred by using Heparin, we can now find the price ceiling that Medicines Company should use for Angiomax.
From the case the cost of Heparin is $2 a dose and the patient is required only 1 dose. For Angiomax, 70% of the patients require 1 dose while the other 30% needs 2.5 doses bringing the average dose for each patient to 1.45.
(Cost of Heparin)+(Additional Cost Incurred by using Heparin)=(Cost of Angiomax)
(1 dose*$2/dose*386,400 patients)+($250,387,200)=(1.45 dose/patient*x/dose*386,400 patients)
Cost of Angiomax=$448.28
From the information given in the case and the above formulations the price ceiling for Angiomax is $448.28, which is the maximum price per dose that Medicines Company can charge