Answer plz my questionnn

Question

Suppose a company develops a new drug that can treat some cystic fibrosis patients who currently have no treatment options.What factors should the company consider when determining the price of the drug? Present two considerations that the company should analyze when developing the price. Explain why each of these considerations is important.

Answer 1

There are many factors to consider when determining the price of a pharmacological product. The severity of the condition/disease the drug should be considered in the context of whether the client would utilize the drug (or is the condition mild enough to not be treated). Additionally, the company needs to consider whether insurance companies will pay to cover the cost of the medication, or how much of the cost will insurance cover versus what the patient will pay. The cost of producing and marketing the product needs to be considered as well so the product can be marketed at a price that will cover these costs and generate profit (if the company is for profit). Furthermore, the company needs to consider the weight of any side effects the product may have and the cost of potential legal actions that may be taken against the company for such events occurring.