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The Food and Drug Administration is about to approve NauZero as a safe and effective post- surgical antinausea drug. Your job is to make a pricing recommendation. The value of antinausea drugs for post-surgical use is quite high for two reasons. One source of value is clinical – vomiting while the patient is under anesthesia can cause the patient to choke and have other serious complications. The second source of value is purely economic – the quicker patients’ post-surgical nausea ca be brought under control, the quicker they can be removed from the recovery room. The charge for use of the recovery room is $150/hour. Without the use of the antinausea drug, time in the recovery room would be approximately three hours. With current antinausea drugs, the time in recovery can be reduced by one-third.
NauZero is no more effective in reducing nausea than the current substitutes, the most popular of which is NoBa, which sells for $12 per dose. However, because NauZero works through a different biological process, it offers advantages to this market that the substitutes do not:
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