After 4 years hard working, 30 million dollars in acquiring Angiomax, further R&D, and initiate marketing test, in order to successfully market the first flagship drug Angiomax, the Medicines Company now have a couple of decisions to make in terms of initial pricing, segmentation, marketing strategies, etc (see exhibit 1).
Decision I: At what initial price should Angiomax be offered to the market? Which segments should be targeted first? Why? In order to successfully market Angiomax, The Medicines Company must look at the different segments that may use the drug, and what the value Angiomax could offer to the buyer and to the end user..
Biogen, the company that created Angiomax, studied a number of angioplasty patients during its clinical trials. It found little improvement over the widely used drug Heparin with low-risk patients. However, higher risk patients (those who previously had a heart attack or those who were hospitalized due to unstable angina) saw a slight improvement with the use of Angiomax. Very high risk patients, those who had a heart attack within the two weeks immediately proceed the angioplasty, saw a significant improvement over Heparin.
For this reason, The Medicines Company should initially target the very high risk and high risk angioplasty patients. Value Angiomax can offer to end users are straightforward. Value to End User:
· The results of Angiomax are more predictable than the results of Heparin · Complications less prevalent with Angiomax than Heparin, less time in the hospital · Much less risk of death in very high-risk patients
Since angioplasty has to be undergone in hospitals of medical centers, the hospital buyers have more power than the end users in the market. Three major groups are our targets as buyers. To doctors who are more concerned about the outcome of the drugs, Angiomax has to ensure its benefits can deliver to patients. To hospital pharmacists, Angiomas has to confirm that annual budget could be met. By reducing complications in angioplasty patients, Angiomax can even offer financial benefits to hospitals. To Hosiptal administrators, a big picture Angiomax would deliver. Not only financial benefits, but also low complication rates among competitors may impress these administrators. The values Angiomax can offer to buyers, such as doctors, pharmacists and hospital administration are different from it can offer to end users. Value to Buyer (Hospital):
· The results of Angiomax are more predictable than the results of Heparin · Avoids costs of additional complications that are more common with Heparin · Fewer complications mean more open beds at hospital, very important due to increasing elderly population · Fewer complications from Angiomax better for the reputation of the hospital
The Medicines Company must educate the medical community on the advantages of Angiomax over Heparin and why Angiomax is worth the premium price. However, neither doling out free samples nor cutting the price in order to generate trials is a good option. Education is essential to the marketing of Angiomax – most of what people learn about new products comes from seeing and hearing the results from other users. The Medicines Company must educate the doctors about the advantages of Angiomax and, in turn, why the asking price is equal to the drug’s value. Cutting the price may communicate that Angiomax is really not as valuable as it is.
It is crucial for The Medicines Company to thoroughly educate the doctors on the advantages of Angiomax.. In order to do this, their representatives must focus on the benefits to the very high risk and high risk patients. Price need not be addressed. Once the company gets the doctors’ buy in on Angiomax, The Medicines Company must then begin to educate the on price and why this premium is worth it.
Due to upfront high R&D expense, long development cycle, low percentage of FDA approval rate, and relative...
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