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  • January 2021
  • Case
  • HBS Case Collection

Hester Pharmaceuticals (A): A Pricing Dilemma

By: Dante Roscini and John Masko
  • Format:Print
  • | Language:English
  • | Pages:23
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Abstract

In August 2019, the leadership of Hester Pharmaceuticals (Hester) had a problem. Italy promised to be a key market for their new breakthrough oncology drug Akrozumab, but for almost two years, its single-payer healthcare system had been unable to agree with Hester on a price. With only a few years before a competing drug to Akrozumab was due to hit the market, company leaders felt mounting pressure to compromise with Italian negotiators. At the same time, they realized that compromising on a low price might jeopardize the higher prices Hester had already negotiated with other European nations, if these countries bought up extra supply from Italy or referenced Italy’s low price when they renegotiated their own prices the following year. Should Hester settle for a low price, stall for more time, or walk away? This case introduces students to the process of bringing new prescription drugs to market and the factors that go into pricing drugs in both single-payer and multi-payer healthcare systems. Students will wrestle with the complex strategy behind pricing their drugs internationally.

Keywords

Macroeconomics; Trade; Price; Global Range; Global Strategy; Globalized Markets And Industries; Health Care And Treatment; Patents; Monopoly; Negotiation; Business And Government Relations; Risk And Uncertainty; Human Needs; Business Strategy; Commercialization; Pharmaceutical Industry; Italy

Citation

Roscini, Dante, and John Masko. "Hester Pharmaceuticals (A): A Pricing Dilemma." Harvard Business School Case 721-001, January 2021.
  • Educators

About The Author

Dante Roscini

Business, Government and the International Economy
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  • Barbarians at the Gate or Turnaround Gurus? Private Equity and the Rise of the LBO By: Tom Nicholas and John Masko
  • Unrest in Chile By: Vincent Pons, John Masko, Rafael Di Tella and William Mullins
  • Country, Sector, Stock: A Framework for International Equity Investors By: Dante Roscini and Vera Trojan
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