What is the likely post-merger bargaining outcome

Reference no: EM131957770

Problem

Pharmaceutical Benefits Managers or PBMs are intermediaries between upstream drug manufacturers and downstream insurance companies. They design formularies (list of drugs that insurance will cover) and negotiate prices with drug companies. PBMs want a wider variety of drugs available to their insured populations, but at low prices. Suppose that a PBM is negotiating with two non-drowsy allergy drugs, Claritin and Allegra, for inclusion on the formulary. The "value" or "surplus" created by including one non-drowsy allergy drug on the formulary is $100, but the value of including a second drug is only $30.

Now suppose the two drug companies merge. What is the likely post-merger bargaining outcome?

Reference no: EM131957770

Questions Cloud

How would you know if your results are positive or negative : What is the P/E Ratio and Dividend Yield? The closing price for the day $206.58. How would you know if your results are positive or negative?

What effect would the purchase of the new machine have : What effect would the purchase of the new machine have on Petoski's break-even point in units?

Calculate peytons return on assets and profit margin : Peyton's Palace has net income of $14.4 million on sales revenue of $124 million. Calculate Peyton's return on assets, profit margin, and asset turnover ratios.

Determine the amount that should be capitalized : Determine the amount that should be capitalized in the Mineral Resources asset account as a result of the lease agreement.

What is the likely post-merger bargaining outcome : Pharmaceutical Benefits Managers or PBMs are intermediaries. Now suppose the two drug companies merge. What is the likely post-merger bargaining outcome?

Define decision rules : Phil, a corporate controller, was preparing a comprehensive presentation of his firm's financial statements for the board of directors. Define decision rules.

Prepare a schedule of distribution of income sssumimg : Prepare a schedule of distribution of income sssumimg that there was a net loss of 30,000 in 2016.

What is the maximum amount of deductible contributions : Assuming Phil's wages were $27,000 and Linda's wages were $18,500. What is the maximum amount of their deductible contributions to a traditional IRA for 2016?

When did you live with your parents : a) When did you live with your parents? b) When did your daughter live with you? c)Where is the child's mother? d) Were you a full-time student?

User Account

All Pages