High drug costs are often in the news. Consumer groups contend that the pricing for some drugs
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1. Which cost definition from Exhibit 2.5 is being used by the consumer groups? The pharmaceutical companies? What is included in the cost figures cited by consumer groups? What are the pharmaceutical companies including in their discussion of product cost? Which costs do you think should be included when comparing the cost of a drug with its price?
2. Suppose that you are the accountant for the pharmaceutical company who is charged with the responsibility for compiling costs associated with your newest drug. The cost figures will be used in pricing and to determine profitability of the drug. What costs do you think you would include? Does the IMA Statement of Ethical Professional Practice have any bearing on your choice? Discuss.
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Cornerstones of Cost Management
ISBN: 978-1285751788
3rd edition
Authors: Don R. Hansen, Maryanne M. Mowen
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