You are working for an insurance company and must determine if a new drug for the treatment
of heart failure should be approved for coverage by your insurance company. The information
about the drug and the current drug is below. Show your work for credit. The threshold price is
$5,500.
New drug Old drug
Mortality rate 10% 20%
Life expectancy 15 years 10 years
Initial Cost $11,000 $8,500
Follow Up Cost Year 1 $5,000 $5,000
Follow Up Cost $1,000 $4000
Subsequent years