Case Type: pricing & valuation; new product.
Consulting Firm: IMS Health Consulting Group second round job interview.
Industry Coverage: healthcare: pharmaceutical, biotech, life sciences.
Case Interview Question #00349: Your client Bayer Healthcare USA is the Pittsburgh, Pennsylvania based American arm of global healthcare and pharmaceutical company Bayer AG (FWB: BAYN). The company is involved in the research, development, manufacture and marketing of products that aim to improve the health of people and animals. The Healthcare division of Bayer comprises a further four subdivisions: Bayer Schering Pharma, Bayer Consumer Care, Bayer Animal Health and Bayer Medical Care.
Recently, Bayer Healthcare is ready to launch a new drug for the treatment of severe asthma. The drug is essentially the same as what is in the market today, but it is stronger, faster, and can treat severe cases that are not properly treated with today’s medicine. The new asthma drug is seen as a breakthrough and the client is planning to launch this drug in Canada very soon. How should the client price the drug?
The first question I asked the interviewer was a general one: Why are they launching this drug in Canada and not the US?
There was no real answer to this, but in the end I determined that the key issue (the location issue) was that in Canada
Remember the importance of regulation/other external factors and of identifying the decision maker/purchaser vs. consumer of a product; a new and improved product is not everything!