this video contains a full-length case interview that you can do on your own without a case interview partner this case comes from hacking the case interviews comprehensive online course so if you find this case interview exercise helpful check out our full case interview course which teaches inside our case interview strategies and contains twenty practice cases like this one before we begin please take a quick second to give this video a like to help support the channel let's start medicine company is a pharmaceutical company that develops and manufactures many different prescription drugs this year they just
received Federal Drug Administration or FDA approval for a new drug hyper tose to treat high blood pressure also known as hypertension this drug is different from other high blood pressure drugs and that it is preventative meant to be taken before someone develops high blood pressure rather than being taken to treat symptoms of high blood pressure once someone has already developed it the drug is targeted for individuals that are high-risk determined by family history diet and lifestyle medicine company has hired us to determine how to increase patient adoption of this drug once it is launched pause
the video now to structure your framework to answer this question here is a transcript for your reference here is how one potential framework could look like in this framework we had to use the create your own bucket particularly looking at the stakeholders involved in increasing drug adoption first we want to look at patients to see how we can increase adoption among them we would look into things like raising awareness among patients and creating patient advocates for the drug second we'd want to look at physicians to see how we can increase adoption among them similarly we'd
look into how to raise awareness among physicians and how to create physician advocates third we'd look into insurers we want to make sure the drug is covered by insurers and that insurers our advocates for the drug finally we want to look at medicine companies capabilities to ensure that there are no capability bottlenecks we look into making sure they can supply enough quantity of drug and that they are able to deliver the drug on time why would insurers or insurance companies want to cover hyper tose pause the video now to answer this question we can answer
this question by first understanding how insurers make money they charge a recurring fee to patients in exchange for providing health insurance that covers the costs of treatments of health issues if insurers don't cover hyper toasts then they would be paying for the treatment of all people with hypertension if they cover hyper toasts they would be paying for hyper toes as well as covering the remaining people that have hypertension therefore insurers would cover hyper toasts only if it saves them money by decreasing the incidence of hypertension among patients thus decreasing their treatment costs if covering hyper
toasts costs $5,000 per year per high-risk individual one how much would it cost matures to not cover hyper toast and treat hypertension - how much would a constant share is to cover hyper toast and treat hypertension assume the following there are 300 million people in the US and one in three people have hypertension - and three people in the US are at risk of hypertension of which one in four of those are high risk treating someone with hypertension costs ten thousand dollars per year hyper toeses 80% effective at preventing hypertension the other 20% of the
time the patient will still develop hypertension and cost 10,000 dollars per year to treat pause the video now to answer these questions let's start by calculating how much it costs if insurers don't cover hyper toasts and treat everyone that has hypertension we are told that there are 300 million people in the US and that one-third have hypertension giving us a hundred million people in the US with hypertension hypertension costs ten thousand dollars a year to treat so that gives us a total of a hundred million people times ten thousand dollars or 1000 billion or one
trillion dollars and costs next let's calculate how much it would cost insurers to cover hyper toasts and then treat the remaining people that have hypertension let's first calculate how much hyper toast costs to cover there are 300 million people in the US and two-thirds are at risk of hypertension and among those 1/4 are at high risk and would take hyper toasts this gives us 50 million people that would be taking hyper tose covering hyper toast costs five thousand dollars per patient per year giving us two hundred and fifty billion dollars in costs to cover hyper
toasts next we need to calculate the cost of treating those that take hyper toasts but do not find success remember that hyper toast is only 80 percent effective therefore twenty percent times 50 million hyper toast users gives us 10 million people that would still develop hypertension after taking hyper toasts multiplying this by the cost of treatment of ten thousand dollars per year per patient this gives us a cost of a hundred billion dollars finally we need to calculate the cost of treating the remaining people with hypertension remember that a hundred million people have hypertension but
only 50 million take hyper toasts we need to calculate the cost of treatment for the remaining 50 million people with hypertension that do not take hyper toasts 50 million people times 10 thousand dollars gives us a cost of 500 billion dollars adding these costs together 250 billion dollars plus a hundred billion dollars plus 500 billion dollars total costs of covering hyper toasts is eight hundred and fifty million dollars this is lower than the costs of not covering hyper toasts therefore by covering hyper toasts insurance companies can save a hundred and fifty billion dollars a year
how much good medicine company increased hyper ptosis price such that insurance companies would still choose to cover the drug pause the video now to answer this question remember that hyper toast has a 80% success rate of saving insurers $10,000 per year per patient and treatment costs therefore the expected value of savings that hyper toast provides insurers is eight thousand dollars per year per patient as long as we price high per toasts less than eight thousand dollars per year insurer's would want to cover hyper toast since it would still be saving them money do you think
it is better to focus on targeting patients or targeting physicians to increase adoption of the drug pause the video now to answer the question let's think about this in terms of ease of targeting and effectiveness for both patients and physicians looking at ease of targeting for patients there are a high number of patients to target but it is relatively easy to run ads targeting this large audience by running television ads for example for effectiveness there is generally a low bar to convince patients to use your drug and patients can ask physicians to prescribe them hyper
toasts looking at physicians there are a few er number of physicians than patients and it is more difficult targeting them you can't just run television ads for effectiveness there is generally a higher bar to convince physicians to prescribe a drug however patients listen to physicians for their advice on which drug to take and physicians have the ultimate power to prescribe therefore we can make the argument that targeting physicians is more effective but requires more effort you could have also recommended focusing on patients as long as you had some rationale or reasons to justify it in
summary how should medicine company focus on increasing drug adoption of hyper tose pause the video now to deliver your recommendation here is how one potential recommendation could look like I recommend that medicine company increased patient adoption of hyper toasts by targeting insurers as the first priority and physicians of the second priority for the following three reasons one targeting insurers is critical because if they don't cover hyper toasts then patients cannot afford to take the drug - we should be able to convince insurers to cover hyper toasts if we price the drug less than $8,000 per
patient this way insurers are incentivized to cover hyper toasts since it lowers their total cost of treating patients with hypertension 3 we should target physicians because they have the actual power to prescribe the drug to patients and patients listen to the advice from their doctors for next steps I'd like to look into two areas one determine the best way to market hyper test to physicians and to ensure that medicine company can supply enough drug to meet demand you
