alere next generation lateral flow platform , page-19

Hi Muppet,
I guess, the question I would have then is how do BBI/Alere capitalize on their potential savings?
Do they drop the price by 10% against other competitors to try and gain more market share?
Or do they take the 30% improvement they receive from mix and go less say a 1-2% royalty and increase their margin by 28-29%.

As you can appreciate this will affect the royalty payment we receive. If they get aggressive and cut prices, we might not see as high a royalty from the get go and the royalty rise at a higher percentage per annum as they gain a higher market share.

One other point is that that would be the cost to manufacture the test rather than the price of sale so they can probably afford to drop the price but then does the retailer pass on that savings or keep the margin themselves?

I guess with pregnancy tests you probably don't have a brand you would be loyal to so you would be reliant on the chemist selling it together with the price and marketing on the box.

What does everyone else think?