Channel margins based on retail price for prescription drugs

Assignment Help Business Economics

Reference no: EM13830781

Without would be the suggested price per pill?

The R&D and development costs for the new drug were $1.2B. Variable costs are estimated at $25 per pill and allocated fixed costs are estimated to be $8 million per year. Since interest will be highest in the early period after launching from all the existing AIDs/HIV patients, Actavis would like to recoup 100% their development costs from U.S. sales only in 3 years if that is possible and, of course, earn a good profit margin of at least 30% by year three and beyond. There are 39 million possible consumers. For pricing let’s assume that the average channel margins based on retail price for prescription drugs are as follows: 10% wholesale, and 20% retail.

Reference no: EM13830781

Questions Cloud

The revenue maximizing output : You are the manager of a monopoly that faces a demand curve described by P = 85 - 5Q. Your costs are C = 20 + 5Q. The revenue maximizing output is

Monopoly that faces a demand curve described : You are the manager of a monopoly that faces a demand curve described by P = 85 - 5Q. Your costs are C = 20 + 5Q. The profit-maximizing price is

The supply curve : The Supply curve

Between the discount rate and the federal funds rate : Suppose the Fedral Reserve lowers the gap between the discount rate and the federal funds rate to 0.5 percentage points. graphically illustrate this policy using the federal funds market and conclude what effect, if any, this will have on the economy..

Channel margins based on retail price for prescription drugs : The R&D and development costs for the new drug were $1.2B. Variable costs are estimated at $25 per pill and allocated fixed costs are estimated to be $8 million per year. For pricing let’s assume that the average channel margins based on retail price..

Company in area of production-price and competition : What was Spindletop? Who were Pattillo Higgins and Capt. Anthony Lucas? How did Spindletop affect John D. Rockefeller’s Standard Oil Company in the area of production, price, and competition?

Assume the marginal propensity to consume : Assume the marginal propensity to consume for U.S. households equals .9, and the marginal propensity to import for the united states equals .1. Suppose an increase in investment of $10 million occurs at each level of income. What does the value of th..

The nonlinear price discriminating monopoly in panel : Suppose that the nonlinear price discriminating monopoly in panel a of figure 12.4 can set three prices, depending on the quantity a consumer purchases. Where Q is its quantity, p is its price, and A is its level of advertising. Its marginal cost of ..

The potential public relations ramifications : Sensitivity to a minority group is as important as being aware of and using the language of that group effectively. Insensitivity towards any group can cost an organization money and opportunity. What do you think the PR department should do inside t..

User Account

All Pages