Midterm Assessment: Pharmaceutical Sales Force

Midterm Assessment: Pharmaceutical Sales ForceNOTE TO STUDENTS:This case study scenario is designed to help students build business problem-solving skills through engineeringscenarios. While created to mimic real-life situations, this scenario is hypothetical and for educational purposes only.The content has been taken and adapted from:Nemoy R. (Feb. 2013). Management Case Study – Pharmaceutical Sales Force Problem. American Institute ofChemical Engineers. Online, available at: http://www.aiche.org/chenected/2013/02/management-case-studypharmaceutical-sales-force-problem CASE ScenarioSHARK Pharma is one of the world’s largest pharmaceutical companies. Based in the US, the firm has a wide rangeof successful products on the market that include various drugs for erectile dysfunction, lowering blood cholesterol,anxiety disorders, anti-inflammatory drugs, antidepressants, etc. Currently, SHARK has only one product on themarket for cancer treatment, UP610, generating roughly $500M in annual sales. In the next 6-12 months, the firm isplanning on introducing a new cancer drug on the market. This particular drug, RFC-9000, will also be for cancerpatients, and the target audience is oncologists. In this space, there is one major competitor for the SHARK’s currentcancer drug. RFC-9000 has already completed clinical trials and is currently awaiting approval from the FDA(SHARK is expecting FDA approval based upon the trial results). If this new drug is introduced this year, there willbe no competition for at least one year. The current sales force includes 750 sales representatives who support thecompany’s cancer drug that is already on the market (UP610). Figure 1: Flow Diagram Illustrating Process of Introducing Pharmaceutical Products to the Customer SHARK’s corporate intelligence has also suggested that a competitor might introduce a different drug that targets thesame cancer within the next 3 and one-half years. The firm is looking for a few directions to take as they move toRFC-9000’s Go-To-Market Strategy.Key Points and Assumptions Adapted from http://www.aiche.org/chenected/2013/02/management-case-study-pharmaceutical-sales-force-problem Midterm Assessment: Pharmaceutical Sales Force1. The term of patent for a new drug is 20 years but most of that time period is spent in the FDA approvalprocesses. Because of the patent, no generic versions of the drug are expected on the market.2. Being first to market is extremely important to the new product’s success.3. Cancer drugs are generally expensive but most of the “out-of-pocket” costs are covered by health insurancecompanies.4. To sell cancer drugs to oncologists, experienced sales personnel with technical backgrounds will be requiredwith approximately 6 months to recruit and train new employees.5. FDA approval is not guaranteed; depending on this approval time, new employees might be on overhead untilFDA approval is received.As a key part of the sales management team at SHARK Pharma, you have been asked to assess this situation andprovide your recommended Go-To-Market Strategy. Be sure to justify your recommendation. This write up shouldbe 3 to 4 pages in length. Adapted from http://www.aiche.org/chenected/2013/02/management-case-study-pharmaceutical-sales-force-problem