The Cost of a Youtuber

Biopure – Case Study

R A Shreyas – H15173 – HRM C                                              07/07/15

1. Introduction

Biopure Corporation, one of three major corporations in the US involved in the process of developing blood substitutes, has achieved a major breakthrough. After over 14 years and $200 Million, Biopure had received FDA approval for its blood substitute Oxyglobin, developed specifically for animals. They now had to decide on the launch as well as the pricing of Oxyglobin, keeping in mind their other product Hemopure, meant to be a human blood substitute.  

1. Problem Statement

The FDA approval of Oxyglobin had created a quandary of sorts. Of great significance was the pricing of Oxyglobin. Biopure had invested over 14 years and $200 million in the development of Hemopure and Oxyglobin.

• Oxyglobin catered to a relatively niche segment; the veterinary medical centers. Biopure’s research had shown that Oxyglobin could not be priced more than $200/unit to be viable.
• On the other hand Hemopure, which was about just two years away from release itself, represented a far wider market as a human blood substitute. Biopure hoped to price Hemopure at around $800.
• Though Oxyglobin would be the very first blood substitute of any sort to be released, its lesser price could lead to demands from the Medical and Insurance industry to price Hemopure similar to Oxyglobin and severely hurt Biopure’s chances of recouping its investment.

Therefore the question:

Release Oxyglobin and gain a possible monopoly among veterinary medical centers, possibly lowering the price of Hemopure

Or

Delay the launch of Oxyglobin and launch it along with or after Hemopure.

1. Analysis

Let us first look at the possible market for Oxyglobin: