Economic Analysis of OXTREXUP in the Healthcare Industry
Student’s Name
Institution
Introduction
In 2013, FDA approved OTREXUP designed by Antares Pharma one of the manufacturers of injector technologies for drug delivery. This is the first approval of disposable auto injector for patents to administer methotrexate. The device is useful in delivering higher doses of the drug compared to pills. The company believes that the self-administration option will lead to more physicians prescribing the injectable drugs to the patients to monitor the cases of arthritis before applying options that are more expensive (Tremblay & Tremblay, 2012). The medical products face various challenges including the fear of needles and poor confidence of patients for self-injection among others. The company should seek to overcome the anticipated challenges to enhance market success.
Market Structure
XXX XXXXXXX XXXXXXXX in an XXXXXXXXX market XXXXXXXXX, since the XXXXXX care involves XXX XXX XXXXXX players. XXX few players XXXX XXX XXXXXX XXXXXXXX with XXXXXXXXX XXXXXXXXXX XXX framework XXXXXXXX XX XXX entry XX XXX firms in the industry. XXX XXXXXXX XX XXXXXXXXXX XXXXXXXXXX XXXXX XXXXX it XXXXXXXXX for XXX players to XXXXX XXX XXXXXXXX. XXXX allows only few players to XXXXXXXX the XXXXXX XXXXXX XXXXXXX developing XXXXXXXX XXXXXXX. Thus, XXX supply XXXX XX XXX products controlled by XXX few XXXXX XX match XXX demand XXXX the patients, XXXXXXX XXXXXXXX XXX the medical XXX XXXXXXX (XXXXXXX &XXX; XXXXXXXXXX, XXXX). The XXXXXXXXXX operates as interdependent markets XXXX is involved in price setting XXX makes XXX own decisions. XXXXXXXXX, XXX health XXXX XXXXX operate XXXXXX the oligopoly XXXXXX structure.
XXXXXXXXXX XX the OTREXUP
The elasticity XX XXX XXXXXXXX XXXXXXX XX inelastic. In most XXXXXXXXXX, XXXX a person XX sick, he or XXX XXXX not consider the XXXXXXX XX XXX XXXXXXX products that could help in XXXXX XXXXXXXX. XXXX, XXX XXXXXXXX are XXXXXXXXXXX XX XXX changes in the XXXXXX XX XXXXXX care products. XX XXXXXXXXXX by RAND XXXXXX XXXXXXXXX XXXXXXX found out that XXX price elasticity XX XXXXXXX costs is -X.X. This implies that a XXXXXX in XXXXX of XXX XXXXXXX product does not or slightly XXXXXXX the XXXXXX XX the XXXXXXX in XXX XXXXXXX.
XXXXXXXXXXXX XXXXXXX XXXXXXX and the Elasticity XX OTREXUP
XXX pricing XX Injector XXXXXXX does XXX have XXXX XXXXXX XX XXX XXXXXXXXXX XX XXX XXXXXXXX. The elasticity of product usually XXXXXXXX XXX XXXXXX of changes in the quantity XX medical XXXXXXXX XXXXXXXX in relation XX XXX XXXXXXX in XXX XXXXXX of the XXXX commodity. It XX XXXXX XXXX the price XXXXXXXXXX of the medical products is between 0 and -X.X. XXXX XXXXXXX that XX the XXXXXX of XXX XXXXXXX product increases, the XXXXXX XX XXX XXXXXXX products XXXX XXXXXX XX XXXX than 10%. This is because XXX elasticity XX the XXXX-injection product is inelastic.
In spite of XXX, XXX XXXXXXXXXX XX XXX XXXXXXX device XXX XX slightly different XXXXXXX XXX XXXXXXXXX. XXXXX, the XXXXXXX XXXXXXXXX XXXX reduce their overall XXXXXX XXXXXXXXXXXX XX X XXX XXXX in XXXXXXXX XX XXX 10 per XXXX XXXXXXXX in XXX price of XXX XXXXXX care devices. Thus, XXX XXXXX-induced XXXXXXXXXXX in XXXXXX XXX associated more to XXX changes in the XXXXXXXXX to XXX XXX XXXX than changing XX another XXXX. Thus, XXX XXXXXXXXXX XX XXXXXXX XXXXXXX among XXX XXXXXXX XXXXXXXXX XXX XX XXXXX 0. XXXXXXXX, XXX XXXXX income XXXXXXXXX are more sensitive to XXX XXXXXXX in XXXXX of the XXXXXXX XXXXXXXX. XXXXX, there is a high XXXXXXXXXX of XXXXXXXXXX such XXXXXXX situations XXXX XXXX XXXX sharing in XXX economy. XXXX XXXXXXXXX XXX how pricing XXXXXXX to the elasticity XX XXX XXXXXXX XXXXXXXX in the XXXXXXX.
Changes in XXX Quantity XXXXXXXX affects XXX XXXXXXXX XXXXX XXX XXXXXXXX
The changes in XXX XXXXXXXX XXXXXXXX due XX the pricing XXXXXXXXX XXXXXX the XXXXXXXX costs XXX XXXXXXXX. The changes in the XXXX’s XXXXXXX XXX XXXXX XX the changes in XXX revenues. XXXX the XXXXXXXX revenues balance with marginal costs, XXX changes in XXX profit XX XXXX and thus, enhances maximum profits. XX increase in the XXXXXXXX supplied XXXXXXX XXXXX to XXXXXX XXXXXXXX costs and XXXXXXXX revenues. This emerges XXXX XXX different pricing XXXXXXXXX in XXX XXXXXX care industry.
XX XXX XXXXXX care industry, XXX XXXXXXXX XXXXXXX XXXXXXXXX XXX XXXXX different XXXX other XXXXXXX including XXXXXXXXXXXXXXXXX and XXXXXXXXXXXXX sectors. The XXXX factor XXXXXXX XXX XXXXXXXXXXX XXXXXXX XXX various sectors XX the XXXXXX of competition XXXXX by XXXXX XXXXXXXXX in the industry. The pricing decision is XXXXXXX important in XXXXXXXXXXX XXX XXXXXX XX using XXXXXXXXX XXXXXXXXX to a XXXXXX numbers of XXXXXX XXX thus, expanding XXX total XXXXXX share. For instance, XXXXXXXX a lower price XXX XXXXX the XXXXXXXXX XX XXXXX XXXXX XXXXXXXXXXX XXXX XXX competitors.
Even though XXX XXXXXX increases, the XXXXXX for the XXXXXXX XXXXXXXX is important XX towards adjusting XXX XXXXX revenue and XXXXX in XXX industry (XXXXX, Hilliard &XXX; Santerre, XXXX). XXXX, XXX XXXXXXX decision is significant towards XXXXXXXX the XXXXXXXX revenues and XXXXX in the XXXXXX XXXX sector. The XXXXXX of the supply curve largely XXXXXXX the XXXXXXXXX of XXX health industry in order XX compete XXXX other firms. In an oligopolistic market structure, XXX changes in the supply XX XXXXXXX XXXXXXXX in relation XX XXX pricing decision XXXXXX XXX XXXXXXX XXXXXXXX revenues XXX XXXXX.
XXX-XXXXXXX XXXXXXXXX
XX XXX XXXXXXXXXXXXX XXXXXX XXXXXXXXX, XXXXXXX non-XXXXXXX strategies can be XXXX to XXXXXXXX the entry of new XXXXX in XXX health XXXX industry. XXXXX, XXXXXXXXXXX XX one of XXXXX non-pricing XXXXXXXXXX that XXX XX used XX XXXXX XXXXX of XXX firms in XXX health XXXX industry. Just XXXX XXXX firms, Antares XXXXXX can incur XXX XXXXXXXX in XXXXXXXXXXX. XXXXXXXXXXX XXX a direct XXXXXX XX the consumers in XXX markets XXXXXXXXX by few XXXXX. It XXXX boosts the amount XX XXXXXXXXXXX XXXXXX for the existence of XXXXXXXX and services.
XXXXXXXXX XXXXXXXXXXX helps in building brand recognition that calls XXX XXXXXXXXX start up costs (Fudenberg &XXX; XXXXXX, 2013). Thus, the startup XXXX resulting XXXX advertising is a type of XXXXXXX of XXXXX. XXXXXXXX, XXXXXXXXXX and warranties XXXX XXXXXXXXXXX the nature of XXXXX’s demands. Considering then increased competition, consumers XXX XXXXXXX attracted by the XXXX XXXXXXXXX firms in the XXXXXX XXXX industry. For instance, the reputation XX the XXXXXXX may be to provide quality products and XXXXXXXX.
XX terms XX XXX warranties, XXX XXXXXXXXX value XXXXXXXXXX, XX it XX an XXXXXXXXX XXXX of XXXXXXXXXXX. XXXX prevents the XXXXX of XXX firms who cannot guarantee warranties and have not built XXX XXXXXXXXXX. Thirdly, network effects and XXXXXXXXX imply XXXX XX XXXXX are XXXXX many buyers seeking XXX XXXXXXX, it XXXXX XXXXXXX more XXXXXX. This XXXXX the XXXXXXX effects in consuming products being XXXXXXXX XX other persons. In XXX oligopoly, the cooperation XX XXX XXXXXX care firms could XXXXXXX more XXXXXXXXX and thus, limiting XXX XXXXX XX XXX firms.
Business XXXXXXXXXX that affects XXXXX and XXXXXXXX Costs
XXX mix of fixed XXX variable costs are XXXXXXX XXXXXXXX by XXX changes in XXX business operations. XXXX of XXX XXXXXXXX operations XXXXXXX XXXXXXX in XXXXXXXX XXXXX XXX operations, XXXXXXXXX XXXXXX in development, XXXXX relations, XXXXXXX in XXXXXXXXX XXXXXXXXXX, capital XXXXXXXXX required XXX XXXXXX XXXXXXX, XXX the upgrades of technology systems. XXX XXXXXXXX, XXX XXXXXX XX fixed and variable XXXXX XXX XX XXXXXXXXXX by XXX changes in XXXXXXXX operations. XXX fixed XXXX XXX preparing the XXXX-XXXXXXXX XX $XX XXX XXX XXXXXXXX XXXX XX $65. XXXX means that the XXXXX costs XX $115.
The XXXXXXXX of technological XXXXXXXXX alters the fixed costs XXX XXXXXXXX in certain XXX. Technological implementation usually increases XXX XXXXXXX fixed costs XXX reduces the XXXXXXXX costs (XXXXXXXXX & XXXXXX, XXXX). XXXX XXXXX XXXX XXX XXXXXXX in XXXXXXXX XXXXXXXXXX XX adopting XXXXXXXXXX XXXX XXXXXX XXX XXXXXXX technology. Other XXXXXXXX operations XXXX XXXXX alter XXX fixed XXX XXXXXXXX XXXXX XXX the XXXXXXXXX XXX XXXXXXX XXXXXXX.
References
Bates, L. J., XXXXXXXX, J. I., & Santerre, X. E. (2012). Do XXXXXX insurers possess XXXXXX power?. Southern XXXXXXXX XXXXXXX, XX(X), XXXX-XXXX.
XXXXXXXXX, X., & XXXXXX, X. (XXXX). Dynamic models of oligopoly. New XXXX, XX: XXXXXX & XXXXXXX.
XXXXXXX, X., & XXXXXXXXXX, X. (2013). Patient selection in a mixed oligopoly XXXXXX for health XXXX: XXX role of XXX XXXX budget XXXXXXXXXX. International Review of Economics, XX(1), XX-70.
XXXXXXXX, V. X., & XXXXXXXX, X. H. (XXXX). Market XXXXXXXXX, XXXXXXXX Concentration, and Barriers XX Entry. XX XXX Perspectives on Industrial Organization (pp. XXX-210). XXXXXXXX New York.