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THE MEDFIELD PHARMA CASE: FIRM VALUATION AND ETHICAL CONSIDERATIONS OF REFORMULATION
Understand that the Medfield case has 2 major problems: 1) Firm Valuation – Impact of Patent Loss and Reformulation; 2) Ethical Considerations – How to Ensure Patients and third-party payees are not hurt
Organize your paper around the case questions, use them as an organizing device. This will benefit you in several ways: 1) provide a framework for constructing your paper; 2) ensure I (your reader) understand exactly what question you are answering; and 3) ensure you answer every question.
Use examples from Pfizer, AstraZeneca and other firms in EXHIBIT 3 to substantiate your thought.
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
Incremental Research
35
35
Incremental Special Marketing
25
25
25
25
25
Growth
2%
-50%
2%
2%
2%
2%
2%
2%
2%
2%
-50%
-50%
-50%
New Sales
214.77
Marginal Sales (New Sales – Original Sales
0.00
New Cost of Sales
49.40
Marginal Cost of Sales
0.00
New Direct Marketing
57.99
Old Direct Marketing
57.99
59.15
29.57
14.79
7.39
0
0
0
0
0
0
0
0
0
Marginal Direct Marketing
0.00
New G&A
8.59
Old G&A
8.59
8.76
4.38
2.19
1.10
0
0
0
0
0
0
0
0
0
Marginal G&A
0.00
Marginal Cash Flow pre Tax
(60.00)
29.52
14.76
7.38
Marginal NOPAT
(40.80)
20.07
10.04
5.02
NPV
ONLY ANSWER ONE OF THE QUESTION 7’S:
IF YOU SUPPORT REFORMULATION:
IF YOU ARE AGAINST REFORMULATION
7. Under what conditions might you be in favor of reformulation?
Your Turnitin Score needs to be 0-30% tops. Try to get it down there. If it is higher, I will read your paper, and see why the score is high but your grade will reflect the score.
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