Gardasil Case Study Questions
Allison Watkins, senior director of Merck’s Vaccines Division, needed to decide on the pricing of Gardasil, Merck’s newest vaccine and one of the company’s most important product launches of the year.
The outside consulting firm she had hired to recommend a price for Gardasil had suggested a price of $120 per dose (or $360 per person, as each person required three doses over six months to achieve adequate immunity).
The Gardasil marketing team disagreed about this recommended price; some thought it was clearly too high, whereas others said it was too low. The latter group argued that Merck would be missing a major opportunity by setting the price at such a low level. Watkins now needed to decide whether to follow the consulting firm’s recommendation or to set a different price.
Answer the following questions in 3 pages:
1. What is the use of Gardasil? Is Gardasil a good product? What should the price be?
2. What factors should Merck consider when setting the price?
3. Who would pay for Gardasil in the US? Is it a price-sensitive or price-insensitive drug?
4. Who is the target segment for Gardasil? Who prescribes Gardasil? Who are the competitors for Gardasil? How are vaccines reimbursed?
5. What is QALY? What is the cost per QALY for Gardasil?
6. Given the QALY calculation is the price of $120 per dose appropriate?
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