The Medicines Company Essay
The Medicines Company
Medicines Company’s drug, Angiomax, outperforms heparinHeparin, but requireincurs a significantly higher price costs to produce. This , makesing the drug difficult to attractively price towards hospitals. This difficulty in pricing stems from a poor positioning strategy for Angiomax which does not maximize the perceived value (PV) that the drug provides to its key customer segments. Therefore, Medicines Co., must develop a positioning strategy that maximizes the perceived value of Angiomax to a key customer segment.
To develop a positioning strategy, Medicines Co. must first determine what the critical characteristics of its key customer segmentsemsnt (doctors, hospital administrators, and hospital pharmacists) value in an anticoagulant (Appendix A). Medicines Co. should then determine where Angiomax and heparin fall based on these characteristics. This will determine areas where Angiomax should compete against heparin when positioning itself. From this, Medicines Co. should develop a positioning statement that highlights Angiomax’s strengths for one of itsits most compatible customer segments – in this case, doctors. The positioning statement for doctors would be “Angiomax outperforms Hheparin in high-risk patients resulting in significantly fewer complications while performing angioplasty procedures”. The focus should be on doctors because there is significantof the high overlap between Angiomax’s benefits and what doctors’ values highly in an anticoagulant.
Additionally, by providing these doctors with materials (Appendix B) that quantifies the cost savings from reduced complications in high-risk patients, Medicines Co. further bridges the gap between the true economic value (TEV) and the PVperceived value that doctors have for Angiomax. This proposed solution is the best because it focuses on what adoctors key customer segment’ values in an anticoagulant. From the case, we know that doctors are key customer segments for adopting new drugs and that hospital administrators, who have similar preferences for an anticoagulant,, another key segment, are difficult to reach directly, but have similar preferences for an anticoagulant (Appendix A). By focusing our positioning strategy on the value offered to doctors, we are effectively targeting doctors and raising theirdoctors’ perceived valuePV for Angiomax.
We are assuming this perceived valuePV will be transferred to hospital administrators because they who trust the opinion of their doctors’ opinions when it comes toon potential cost savings from reduced complications. From a pricing perspectiveor pricing, we have calculated a TEV for Angiomax to beof roughly $391 for high-risk patients and a breakeven price of roughly $138 139 (Appendix B), . This allowsing Medicines Co. to price Angiomax between $138 139 and $391. We recommend a halfway price of $265, which is halfway between. This incentivizes the doctors and, indirectly, the hospital administrators to purchase the drug since this price will beis lower than the PVperceived value created by this positioning strategy. Implementing this solution requires additional considerations.
First, Medicines Co. needs to thoroughly train its representatives on the cost savings and risks of complication statistics that show thehow stronger effectiveness of Angiomax is over Hheparin for high-risk patients. This is critical for their interactions with doctors. Second, Medicines Co. needs to allocate additional a marketing budgeting needs to be created to demonstrate that how effective Angiomax is a more effective treatment for high-risk patients and not just assimply an alternative to heparin. Finally, since Angiomax is close to being approved for heart attacks, the marketing team should begin performlanning a timeline for when and how to integrate this added benefit to the existing positioning strategy. This may require another reanother analysis of thetheir marketing framework and budget moreadditional marketing budgeted for specificallyto highlighting the effectiveness of Angiomax in treating heart attacks over heparinHeparin.