Deciding to release the product immediately would mean BioPasteur incurs no further costs asides the $15million expenses identified. Should the company choose to defer the release of the product however BioPasteur would be committing to incur an additional $12million in research and development costs which have a probability of not being recouped. On the merit of cost alone the decision would be tilted more towards immediate release.
While Diastop currently has the approvals required by the FDA for immediate release, there are significant concerns of the potential for recall of the new product by the regulator should a pattern of side effects for a drug be noticed. The Data in exhibit 2 suggests that the risk of complications for Diastop is higher among the 80% demographic of the company’s customers (Ages 45 – 70). The potential for recall is significant should Diastop be released. On the other hand, holding the drug back for further development greatly reduces the chances for recall as the new technology to be used is expected to reduce the noticed side effects. The present regulatory concerns alone would tilt the decision more towards retaining for further development.
In choosing to release the Diastop as is, BioPasteur would be meeting its market’s expectation in terms of the built-up anticipation which could yield positive results for the company. However, the impact of a failed launch of the new product would not only deter the market from Diastop but could also significantly impact on the sales of Lobloprin, the company’s flagship. Choosing to develop the new product further would ensure that the company’s image and reputation is maintained, and the success of its existing product not hampered. On the merit of company reputation alone, the decision would be tilted more towards further product development.
Summary and Recommendation
The criteria’s considered reveal that both decisions have their merits depending on which is being considered. However, the importance of each criterion must be considered relative to the company’s aim (to develop new cheaper patient-friendly drugs to cure diseases) to decide which to give more weight to.
Consequently, for BioPasteur which appears to be a more ethical and socially conscious organisation, more emphasis would be given to company reputation and regulatory concerns over profitability, costs and time.
As such the recommendation would be for BioPasteur to further develop Diastop instead of releasing the product in its current state.