Company Alpha is the industry leader in the HIV drug industry. They have invested $150 million in research to produce the drug. This investment is a fixed cost. There are a few other smaller companies in the market. The company market share is given in the Excel data sheet.

The U.S. government has put a price ceiling on retail price? $1.20 per capsule. Company Alpha sells the drug at a wholesale price at $0.90 per capsule. The variable cost per capsule is $0.73. HIV patients are required to take 5 capsules per day. It is estimated that only 75% of the patients take their medicine regularly. Companies use this usage rate to calculate their revenue and cost estimates.

About 70% of the HIV patients depend on the government to pay for their drugs through Medicare and other subsidy programs. In a way, the government (that means taxpayers) is literally funding the HIV drug industry.

Country = USA 1994 Total Patients 1995 Year Deaths from HIVAIDS (Number]! New Infections of HIVAIDS (new cases of HIV Total Number of people living with HIV (including new patients) Retail Price/Capsule 1936 322231 3673 50831 914471 Wholesale Price/ Capsule 1997 40483 44195 951096 $1.20 $0.90 1 Variable Cost/Capsule Daily Dosage # of Capsules 38821 $0.13 Usage rate (only 75% patients take the capsules regularly] Company Alpha Market Share 1999 450171 $1.20 $0.90 $0.90 $0.73 Alpha Market Share (x] 45401 990139 $1.20 10.73 Fixed Cost 2000 33718 $0.90 34588 994736 10.73 $150,000, 000 2001 350691 19252! $1.20 0.751 $1.20 $0.90 $0.73 $150,000, 000 2002 15675 2003 362581 995928 $0.90 0.75 16819/ 39053 1007737 $1.20 $0.30 $0.73 0.75 2004 41351 1026831! $1.20 30.30 $0.73 0.75 2005 15996! 427391 1050317 $1.20 $0.90 10.73 0.75 2006 153221 43343 107108 $1.20 2007 $1.20 30.30 $0.73 0.751 14892 43746 1090385 2008 14201 1 43983 1110840 $1.20 $0.73 0.75 0.75 2009 $150,000, 000 13629! 44052 $1.20 2010 $0.30 43978 11327131 13064 1156991 $1.20 0.751 $150,000, 000 2011 50.30 10.13 0.75 $150,000, 000 12235 43422 2012 1181762 0.75 2013 11182! 42232 1205984 11.20 30.30 30.73 0.75 1 $150,000, 000 $150,000, 000 2014 10333 40872 1227740 0.75 $150,000, 000 90821 39804 12485381 31.20 10.30 $1.20 50.30 10.73 10.73 0. 75 2015 $150,000, 000 8365 39513 1270382 0.75 2016 7898 400261 1292696, 2017 $1.20 10.73 $150,000, 000 2018 75971 $1.20 30.30 0 .751 $150,000, 000 422401 1339916 2019 7319 70291 1364864 $1.20 10.13 150,000, 000 0.75 2020 7414 46002 1392678! $1.20 2021 1423054 $1.20 50.30 $150,000, 090 0.75 $150,000, 000 2022 7343 484451 7424 51266 1455773 7536. 52450 1488180 10.73 0.751 2023 $150,000, 000 532181 1515773 10.73 0.75 0.75 $150,000, 000 15681801 0. 75 $150,000, 000 $ 150,000, 000 Variable $150,000, 000 $150,000, 000 Avera Average Total Number of people living with HIV (including new patients]: $150,000, 000 $150,000, 000