This new treatment can reduce the severity of disease and prevent the deaths of patients with Covid-19. What should your company do regarding the discovery of this new treatment?

Scenario:
• You are the CEO of a small drug company (200 employees) that produces a handful of marginally successful drugs with limited market shares. Total revenue last year was $100 million, with 2% profit.

• You started your career as a Primary Care Physician, with an undergrad degree in chemical engineering, before moving into the pharmaceutical industry.

• Your company has barely been profitable the last few years and you are struggling to compete with the large multinational pharmaceutical firms.

• However, your scientists have discovered that one of your existing medicines (called X1) is an effective treatment for people with Covid-19. It is not a vaccine, but when given to people with Covid-19 it dramatically reduces symptoms and disease severity. No patients given the medication in clinical trials needed to be treated in the ICU or died from Covid-19 complications and hospital stays were significantly lower than a control group.

• Your company holds the exclusive US and European patents for this existing drug and let’s assume the X1 patents hold for the new treatment. No clinical trials or FDA approvals are required since the drug has already been on the market for years and has an excellent safety record.

• The current production cost (includes research and development, marketing, sales, logistics) of X1 is $5 per pill and patients will take one pill a day for 5 days to treat Covid-19.

• The current price of X1 is $10 per pill for the patients who take if for an autoimmune disease. The profit margin for X1 covers the losses made on your other drugs and the company breaks even or returns a small profit each year.

• The US demand for this new Covid-19 treatment is currently 1 million doses per month for Dec 2021, but demand will rise to 5 million doses per month by March 2022. Worldwide demand is expected to exceed 10 million doses per month.

• Your current production capacity for X1 is 100,000 pills per month, but you can expand this to 300,000 pills by diverting other manufacturing lines to make the pills. Increasing capacity further would require construction of a new plant or replacing existing production lines with new equipment and is not feasible until mid-2023 or beyond.

Simplistic profit calculations
Profit per unit= selling price per unit – production costs per unit.
Example: $5 price – $3 production costs = $2 profit per unit
Total Profit = profit per unit x units sold
Example: $2 profit per unit x 100 units sold = $200 total profit.

Exam components-Be sure to answer all questions!
Introduction:
Provide a detailed 3-4 paragraph background section on the discovery of and spread of Covid-19, including the current number of confirmed infections and deaths worldwide and in the US at the time of writing. Sources must be cited properly. Discuss the economic impacts of the pandemic and lockdowns, especially for the healthcare industry. Discuss the cultural and societal impacts (schools, work, social, etc.) Be sure to cite sources. The goal for this section is to be informative and concise to give the reader suitable understanding of the Covid-19 situation. You do not need to cover every Covid-19 related event, select what you think are the most important milestones and themes. These can include cultural, political or economic events as well as scientific or epidemiological ones.

Questions:
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