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Medium Profitability Product Strategy R&D Investment Decision

Fringe Science

#Healthcare #Pharmaceuticals
ProHub Comment

This is a sophisticated healthcare profitability case requiring candidates to integrate multiple quantitative and qualitative factors. The case tests market sizing, probability-weighted financial analysis, and strategic pricing decisions while incorporating healthcare-specific considerations like formulary status and clinical efficacy profiles. An excellent candidate must proactively identify the need for additional data, perform expected value calculations, and recognize that higher prices trade off against market access in healthcare markets.

Estimated Time 15 minutes
Difficulty Medium
Source Duke
50 / 100
Massive Dynamic is a multi-national pharmaceutical company. One of their assets, Cortexiphan, is an anti-infective that successfully treats three major types of hospital-born illness and is currently in Phase II clinical trials. Unfortunately, Massive Dynamic only has the capital to finance a Phase III clinical trial for one of the three illnesses with Cortexiphan treats. Walter Bishop, Chief Medical Officer of Massive Dynamic, has enlisted your help to decide which of the three possible indications for cortexiphan they should pursue to maximize profits over a five year-period post-launch.

Clarifying Information

  1. Drug is only likely to be approved in the US at this time
  2. Drug will be sold directly to hospitals by Massive Dynamic; therefore, no need to consider distribution channel costs, etc.
  3. No need to calculate based on NPV, just do total over five years w/out discounting
  4. Provide Exhibit 1 when asked about market size and/or competition
  5. Provide Exhibit 2 when asked about development costs or clinical profile
  6. Provide Exhibit 3 after an initial indication selected and pricing prompt given