Economic Characteristics of the Healthcare Industry
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EconomicCharacteristicsoftheHealthcareIndustries.docxFM005: Economic Characteristics of the Healthcare Industry
Overview
In this Assessment, you will use information from the case scenario below, along with the supporting documents provided, to demonstrate your ability to apply economic concepts to make recommendations for organizational decisions.
Case Scenario: Launching a Cancer Drug: Comanapracil
You are a pharmaceutical executive. You believe that your firm, Ropache, may have developed a promising new drug, Comanapracil, which seems to arrest the progress of breast cancer for 2 years with no significant side effects. Clinical trials suggest that the drug is 100% effective for 2 years. After 2 years, tumor growth resumes at the same rate. Therefore, Comanapracil can only be used for a 2-year course, after which it loses its effectiveness.
Professional Skills: Written Communication, Technology, and Critical Thinking and Problem Solving are assessed in this Competency
Your response to this Assessment should:
· Use the Assessment documents and video as required.
· Reflect the criteria provided in the Rubric.
· Adhere to the required assignment length.
· Use the APA course template.
· Download the Writing Checklist to review prior to submitting your Assessment.
Instructions
Before submitting your Assessment, carefully review the rubric. This is the same rubric the assessor will use to evaluate your submission and it provides detailed criteria describing how to achieve or master the Competency. Many students find that understanding the requirements of the Assessment and the rubric criteria help them direct their focus and use their time most productively.
Access the following to complete this Assessment:
· U.S. Breast Cancer Statistics
· Annual Costs of Cancer Care—Cancer Prevalence and Cost of Care Projections:
· Chemo Costs in U.S. Driven Higher by Shift to Hospital Outpatient Facilities
· Health Expenditure Per Capita
· Life Expectancy at Birth, Total (Years)
· Breast Cancer Drug - Comparison Chart
This assessment has two-parts. Click each of the items below to complete this assessment.
Part I: Determine Pricing and Marketing Strategy for a New Drug
You have been tasked with developing a pricing and marketing strategy for Comanapracil. As you undertake this task, refer to the following resources mentioned above:
· U.S. Breast Cancer Statistics
· Annual Costs of Cancer Care—Cancer Prevalence and Cost of Care Projections
· Chemo Costs in U.S. Driven Higher by Shift to Hospital Outpatient Facilities
· Breast Cancer Drug—Comparison Chart
Create a 10- to 15-slide presentation, for the board of directors, to convince them that Comanapracil is a good investment. The presentation should address the following economic issues related to the marketing of Comanapracil:
· Develop and present estimates for the demand for Comanapracil and the price of the drug you think the market will bear. Be sure to include the number of customers for this drug.
· Describe where and to whom you will focus your marketing efforts. For each, detail why they are important.
· Explain how you will ensure that insurance companies pay for your drug.
· Explain the elasticity of demand for a drug like Comanapracil. What factors could potentially change the elasticity of demand?
· Assume you are able to obtain a patent, and are ready to go to market immediately. Explain the length of time for which your drug will receive patent protection, so that you are protected from competition prior to generics entering the market. Also, explain why patent protection exists in healthcare.
Part II: Compare International Healthcare Systems to Develop an International Market Entry Strategy
It is your job to develop a market analysis for four different healthcare markets with unique insurance systems. These four analyses will be contained within one 10- to 11-slide presentation to the board of directors. Your analysis will serve as a basis for deciding which country to market Comanapracil:
· Germany
· United States
· Ghana
· Brazil
Create your presentation as follows:
· The first slide will be an analysis of the relationship between spending on healthcare per capita and life expectancy in each country. Begin by referring to the World Bank charts “GDP Per Capita,” “Health Expenditures Per Capita,” and “Life Expectancy at Birth, Total (Years).” Using these, create a chart comparing the spending on healthcare per capita with the life expectancy in each country. Underneath the chart, on the same slide, address the question: Is there a relationship between life expectancy and healthcare spending?
· Next, based on what you have learned about the healthcare systems of Germany, the United States, Ghana, and Brazil, create four slides (one for each country) that summarize how each healthcare system is structured.
· Next, create another four slides (again one for each country). Each of these slides should summarize your findings from conducting a SWOT analysis for each country (that is, identify the economic strengths, weaknesses, opportunities and threats) associated with marketing Comanapracil in each country.
· Create one to two slides recommending which two countries are most attractive for marketing Comanapracil and why.
· Your board has shown a particular interest in the German market. In order to market your drug in Germany successfully, you must be approved by the German Institute for Quality and Efficiency in Health Care (IQWIG). Create two to three slides, addressed to the IQWIG, which argue for the importance of why your drug should be covered. Address the following issues:
· How much of a gain in health outcomes will this drug provide?
· Do other drugs provide similar effectiveness in treating this disease?
· How many people will benefit from this drug? Explain why some people will benefit from the drug more than others.
References
· Chapter 11, “Pharmaceuticals” (pp. 236–258)
· Chapter 13, “Macroeconomics of Medical Care” (pp. 292-298)
. Section 13.1, “What is Macro?” (pp. 292–293)
. Section 13.2, “The Consumption Function” pp. (294–298)
Getzen, T. E. (2013). Health economics and financing (5th ed.). Hoboken, NJ: John Wiley & Sons.
Laureate Education (Producer). (2008a). Health economics: Competitive market model [Video file]. Baltimore, MD: Author.
ARTICLE: COST SHIFTING DOES NOT REDUCE THE COST OF HEALTHCARE
Cost Shifting Does Not Reduce The Cost of Healthcare
Fuchs, V. R. (2009). Cost shifting does not reduce the cost of health care. Journal of the American Medical Association, 302(9), 999–1000. Retrieved from the Walden University Library databases.
ARTICLE: COMPARATIVE EFFECTIVENESS AND HEALTHCARE SPENDING: IMPLICATIONS FOR REFORM
Comparative Effectiveness and Healthcare Spending: Implications For Reform
Weinstein, M. C., & Skinner, J. A. (2010). Comparative effectiveness and health care spending: Implications for reform. New England Journal of Medicine, 362, 460–465. Retrieved from the Walden University Library databases.
ARTICLE: MARKET FAILURE AND THE FAILURE OF DISCOURSE: FACING UP TO THE POWER OF SELLERS
Market Failure and the Failure of Discourse: Facing Up To The Power of Sellers
Vladeck, B. C., & Rice, T. (2009). Market failure and the failure of discourse: Facing up to the power of sellers. Health Affairs, 28(5), 1305–1315. Retrieved from the Walden University Library databases.
BOOK EXCERPT: HEALTH ECONOMICS AND FINANCING
Chapters 11, 17, and 18 discuss some of the key factors that need to be considered when making decisions about the development and marketing of a new drug or other healthcare product. As you read, think about how these factors need to be analyzed and weighed against each other to make effective decisions.
· Chapter 11, “Pharmaceuticals” (pp. 236–258)
· Chapter 18, “Value of Money in the Future of Health Care” (pp. 427–442)
Getzen, T. E. (2013). Health economics and financing (5th ed.). Hoboken, NJ: John Wiley & Sons.
BOOK EXCERPT: HEALTH ECONOMICS AND FINANCING
Chapter 16, "International Comparisons of Health and Health Expenditures" (pp. 372–407)
Getzen, T. E. (2013). Health economics and financing (5th ed.). Hoboken, NJ: John Wiley & Sons.
BOOK EXCERPT: HEALTH ECONOMICS AND FINANCING
These chapters present a variety of considerations that need to be made when analyzing the cost-effectiveness of developing a new drug or other healthcare product.
· Chapter 3, “Cost-Benefit and Cost-Effectiveness Analysis” (pp. 44–68)
· Chapter 11, “Pharmaceuticals” (pp. 236–258)
· Chapter 16, "International Comparisons of Health and Health Expenditures" (pp. 372–407)
Getzen, T. E. (2013). Health economics and financing (5th ed.). Hoboken, NJ: John Wiley & Sons.
