Tengion Case Study
Memorandum
Medicines Company
To: Board of Management, Medicines Company
From: Clive Meanwell, President and CEO, Medicines Company
Date: 17th Dec 2000
Subject: Recommendation on pricing strategy for Angiomax
_________________________________________________________________________________________
Comments: Finding a business opportunity is an art. And Medicines Company thrives upon this unique idea of developing abandoned drugs which still have some remaining value for the market. One such drug is Angiomax which is a blood thinning drug or anticoagulant. Main reasons for selecting Angiomax were its effectiveness over existing drug Heparin, another alternative to the only drug Heparin available for angioplasty and the cost to produce the Angiomax could be reduced to half making it economically viable business. After getting FDA approval, the management board of Medicines Company is facing go to market pricing issues with Angiomax and their inability to come up with a right price for the drug. The main reason for the current pricing problem is already existing widely used competitor drug Heparin, which is priced only at $2/dose. In order to position Angiomax in the market Medicines Company have to analyse its advantages and economic value in comparison to Heparin.
First of all it is necessary that we analyse the two products, Heparin and Angiomax. Some of the shortcoming of using Heparin involved its unpredictability requiring close monitoring of the patients. Some patients have high incidence of uncontrolled bleeding. The window of dosing differs across patients and across time leading to higher dose abuse of Heparin. Heparin is also associated with adverse reactions in 2-3% patients causing fatal heparin-induced thrombocytopenia. In contrasts, effects of Angiomax are accurate
Recommendation:
Medicines Company
To: Board of Management, Medicines Company
From: Clive Meanwell, President and CEO, Medicines Company
Date: 17th Dec 2000
Subject: Recommendation on pricing strategy for Angiomax
_________________________________________________________________________________________
Comments: Finding a business opportunity is an art. And Medicines Company thrives upon this unique idea of developing abandoned drugs which still have some remaining value for the market. One such drug is Angiomax which is a blood thinning drug or anticoagulant. Main reasons for selecting Angiomax were its effectiveness over existing drug Heparin, another alternative to the only drug Heparin available for angioplasty and the cost to produce the Angiomax could be reduced to half making it economically viable business. After getting FDA approval, the management board of Medicines Company is facing go to market pricing issues with Angiomax and their inability to come up with a right price for the drug. The main reason for the current pricing problem is already existing widely used competitor drug Heparin, which is priced only at $2/dose. In order to position Angiomax in the market Medicines Company have to analyse its advantages and economic value in comparison to Heparin.
First of all it is necessary that we analyse the two products, Heparin and Angiomax. Some of the shortcoming of using Heparin involved its unpredictability requiring close monitoring of the patients. Some patients have high incidence of uncontrolled bleeding. The window of dosing differs across patients and across time leading to higher dose abuse of Heparin. Heparin is also associated with adverse reactions in 2-3% patients causing fatal heparin-induced thrombocytopenia. In contrasts, effects of Angiomax are accurate
Recommendation: