Advanced Bio Medics (ABM) has invented a new stem-cell–based drug that will arrest even advanced forms of lung cancer.

The demand for a new drug is given by equation Q = 150 – 3P (where Q is the bottles of medicine and P is the price per bottle in dollars).
October 1, 2018
Ralph’s parents went to Dr. Egn as their primary care doctor since they were married.
October 1, 2018

Advanced Bio Medics (ABM) has invented a new stem-cell–based drug that will arrest even advanced forms of lung cancer. Development costs were actually quite low because the drug was an accidental discovery by scientists working on a different project. To stop the disease requires a regimen of one pill per week for 20 weeks. There is no substitute offered by competitors. ABM is thinking that it could maximize its profits by charging $10,000 per pill. Of course, many people will die because they can’t afford the medicine at this price.What pricing strategy is ABM using? Read the following current story What’s a fair price for a drug? (http://www.bbc.com/news/health-34322720) which is a real life illustration of this strategy. Do you feel this is an appropriate pricing strategy for these products? Discuss the ethics of ABM’s and Shkreli’s strategies. Do you think they will be successful? What are the ramifications of the high price? What would you recommend if you were deciding on the price for this product? What would you have to consider when making your decision? Support your answer.

 
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