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.

Position 1: The private companies and the advocacy groups have different perspectives in marketing the drug. Company Alpha has been given a special license to sell the drug for 20 years. Their license has expired. They have been given a two-year grace period to continue. The Company is lobbying to renew the license for another 10 years. They are opposed to price ceiling and want to deregulate prices. Other companies in the industry are supporting Company Alpha, the industry leader.

Position 2: The advocacy groups argue that the taxpayers are literally guaranteeing a fixed income to the drug companies. They oppose the renewal of the license. They suggest that the government should buy the license from the drug companies. The government is willing to pay twice the fixed cost (e.g., $300 million to Company Alpha). The Government will enter a "contract manufacturing" with the pharmaceutical companies. Under such an arrangement, companies will be producing the drug for the government. It is estimated that this strategy will decrease the variable cost of each capsule which is a substantial savings for the government.

Question: First, calculate and report the data as given below.

Average Total Number of people living with HIV (including new patients): _____ Average Total Variable Cost: _____ Average Daily Total Profit: _____ Average Yearly Total Revenue: _____ Average Yearly Total Profit: ______ Breakeven quantity= (Fixed Cost / Price - Variable Cost): _____

Now, take any one of the above positions (Position 1 or Position 2) and make your argument. You must take one position, not both. What would be the principal selling argument/point or value proposition for the Position you have taken? How would you market your idea to win the hearts of the citizens and the lawmakers? Support your arguments with data.

X AutoSave ( Off H . = Week 4 - Assignment 4 - Case Study USA-5.xIsx - Protecte. . Saved to this PC Search A Kevin Alfaro KA X File Home Insert Page Layout Formulas Data Review View Automate Help Comments Share S14 : XVfx E F G H M N P Q R S T U W Y Z AA AA Country = USA Total Patients Company Alpha Market Share Year Deaths from HI New Infections Total Number of peo Retail Pricell Wholesale F Variable Co Daily Dosage Usage rate (only Alpha Market Share ( Fixed Cost 1994 27519 58146 91447 $1.20 $0.30 $0.73 0.75 85 $150,000, 00 199 32223 50831 51896 $1.20 $0.30 10.73 0.75 3 $150,000, 000 1936 36573 44195 976764 $1.20 $0.90 $0.73 0.75 82 $150,000, 000 199 40483 1882 390738 $1.20 $0.90 $0.73 0.75 81 $150,000, 000 1998 45017 35241 39709. $1.20 $0.90 10.73 0.75 2 $150,000, 000 1995 45401 33863 394736 $1.20 $0.90 $0.73 0.75 84 $150,000, 000 200 33718 34588 395928 $1.20 $0.90 $0.73 0.75 80 $150,000, 000 200 19252 36558 100773 $1.20 $0.90 $0.73 0.75 3 $150,000, 000 2002 15675 33053 102683 $1.20 10.90 $0.73 0.75 83 $150,000, 000 200 1681 41351 05031 $1.20 $0.30 10.73 0.75 12 $150,000, 000 14 2004 15998 42739 107108 $1.20 $0.90 $0.73 0.75 81 $150,000, 000 2005 15550 43343 109038 $1.20 $0.90 $0.73 0.75 3 $150,000, 000 200 15322 43746 1110840 $1.20 $0.30 10.73 0.75 3 $150,000, 000 200 14892 43983 132713 $1.20 $0.90 $0.73 0.75 2008 1420 44052 15693 $1.20 $0.90 to.73 0.75 82 $150,000, 000 200: 1362 43978 1181762 $1.20 $0.90 $0.73 0.75 $150,000, 000 20 2010 13064 43422 1205984 $1.20 $0.90 $0.73 0.75 19 $150,000, 000 21 201 12235 42232 122774 $1.20 $0.30 $0.73 0.75 $150,000, 000 22 2012 1118 40872 1248538 $1.20 $0.30 $0.73 0.75 9 $150,000, 000 23 201 0333 39804 1270382 $1.20 10.90 $0.73 0.75 5 $150,000, 000 24 2014 9082 39513 292696 $1.20 $0.90 10.73 0.75 $150,000, 00 2015 836 40026 1316272 $1.20 $0.90 $0.73 0.75 $150,000, 000 26 201 7898 40931 33931 $1.20 $0.90 10.73 0.75 2 $150,000, 000 27 2017 7597 42240 1364864 $1.20 $0.90 $0.73 0.75 1 $150,000, 000 28 2018 731 43951 1392678 $1.20 $0.90 $0.73 0.75 69 $150,000, 000 29 201 7029 46002 1423054 $1.20 $0.90 $0.73 0.75 6 $150,000, 000 30 2020 7414 48445 455773 $1.20 $0.90 $0.73 0.75 6 $150,000, 000 31 2021 7343 51266 488180 $1.20 $0.90 10.73 0.75 64 $150,000, 000 32 2022 424 52450 1515773 $1.20 10.90 to.73 0.75 $4 $150,000, 000 33 2023 753 53218 1568180 $1.20 $0.90 10.73 64 $150,000, 000 34 35 36 Variables 37 Average Total Number of people living with HIV (including new patients): 38 Average Daily Total Variable Cost: 39 Average Daily Total Profit: 40 Average Yearly Total Revenue Average Yearly Total Profit: 42 Breakeven quantity= (Fixed Cost / Price - Variable Cost): 43 44 45 46 47 HIV-Data + Ready + 55%% TB - BAL 3:33 PM Live - Top 2 Q Search W 6/1/2024