Case Type: math problem; industry analysis; market sizing.
Consulting Firm: Campbell Alliance final round job interview.
Industry Coverage: healthcare: pharmaceutical, biotech, life sciences.
Case Interview Question #00183: Your client GlaxoSmithKline plc (LSE: GSK, NYSE: GSK) is a global pharmaceutical and consumer healthcare company headquartered in London, United Kingdom. As of 2009, it is the world’s third largest pharmaceutical company measured by revenues (after Johnson & Johnson and Pfizer).
GSK makes and sells a prescription drug brand-named Augmentin for nasal infections (or Sinus Infection, Sinusitis). You’re brought in as an external consultant because GSK’s sales department has seen some strange sales numbers showing per capita sales of Augmentin in the US are much higher than sales in Canada. Their question to you: Why are per capita sales different between the two countries?
- A nasal infection is an ailment with symptoms much like a cold. People cannot self diagnose a nasal infection.
- The competitors are the same in the US as they are in Canada.
- This is a prescription drug – it is not sold over the counter (OTC). Given a prescription, patients in both countries will have it filled. Insurance will pay for it.
- Americans are no more or less likely to contract a nasal infection, or show symptoms than Canadians.
- Canadians with nasal infection symptoms are will visit the doctor 60% of the time, while Americans will visit the doctor 30% of the time.
- Canadian doctors are twice as likely to misdiagnose a nasal infection. In other words, Canadian doctors diagnose a cold or flu, when the patent indeed has a nasal infection (the candidate should ask for the magnitude of misdiagnosis – 10% in the US and 20% in Canada).
- For a diagnosis of nasal infection, American doctors prescribe the client’s drug 70% of the time versus 33% of the time in Canada.
- The price of the drug in the US is 25% higher than the price in Canada.
- Canadian patients receive no refills for their prescription on average, while Americans receive 1 refill on their prescription.