Calculate charge for the treatment

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Reference no: EM1355834

If you are working at Johnson & Johnson and one of your responsibilities is to set prices for new drugs.

The firm has invented a cure for Aids and is protected by patent. The cost for the one time injection that cures the disease is $100 and includes amortization of the development cost (The $1 billion cost to develop the product is included in the $100) and the cost raw materials. Assume that insurance companies currently spend $200,000 to treat an Aids patient. Assume 20% of the world population is covered by insurance or socialized medicine.

What price do you charge for the treatment? Defend your answer.

Consider all your stakeholders. (Including your stock holders, employees, etc.)
Don't try to quantify your answer. Just tell us what you think is right.

Reference no: EM1355834

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