(a) profitability, (b) sales volume, or (c) market share.

Module 5 Discussion – Price and Distribution Question 1.

Pricing for non-proprietary drugs can be affected by the company’s objectives. In order to achieve profitability, a company will price a drug at a higher level in an attempt to boost revenue and profits. If the goal is to increase the sales, then the company will lower the price of the drug in order to get more customers. The company can also price its drug to be competitive in order to get a bigger share of the marketplace if it is aiming for market share.

I agree with my peer’s response. A company’s objective can greatly impact their pricing strategy, and the three objectives listed (profitability, sales volume, market share) are all valid reasons for a company to adjust their pricing strategy. Additionally, it’s important to consider the competition and market demand when deciding on a pricing strategy. There are many things to take into consideration when deciding on a pricing strategy for non-proprietary drugs. The company’s objectives are only one of them.

Module 5 Discussion – Price and Distribution Question 2

This textbook discusses several pricing strategies including:

1. Cost-plus pricing – adding a markup to the cost of producing a product to determine the selling price.
2. Value-based pricing – setting a price based on the perceived value to the customer.
3. Penetration pricing – setting a low price to enter a market and gain market share.
4. Price skimming – setting a high price for a new product with unique features or benefits.
5. Dynamic pricing – adjusting prices based on market demand and other external factors.

I agree with my peer’s response. In the textbook, there are many different pricing strategies. The five mentioned above should be taken into consideration when creating a pricing plan. Additionally, it’s important to consider the company’s objectives, the competition, and the target market when deciding on a pricing strategy. Each strategy has its advantages and disadvantages, and it’s up to the company to decide which strategy is most appropriate for their product and market.

Module 5 Discussion – Price and Distribution Question 3

In a negotiation between a group of physicians and a managed care health plan, the physician group’s size and representation of 75% of all primary care providers in the area gives them significant bargaining power. Power can be derived from many sources.

1. Expertise – the physician group may have specialized knowledge or skills that are in high demand by the health plan.
2. Competition – the health plan may not have many other options for primary care providers in the area.
3. Information – the physician group may have access to information about the health plan’s costs and profitability.
4. Legitimacy – the physician group may have a strong reputation and credibility in the community.
5. Coercive power – the physician group may have the ability to take actions (such as striking or refusing to treat certain patients) that would negatively impact the health plan.

I agree with my peer’s response. This negotiation is heavily influenced by the power of the physician group. The size and presence in their community gives them considerable leverage. When negotiating the contract, it is important that both parties consider all of these aspects. However, it’s also important for the physician group to consider the health plan’s needs and limitations when negotiating a contract that is fair and mutually beneficial.