Use the Table Below to Answer the Following Question(s) -Calculate the Market Share Percentage in the Third Year

question 41

Multiple Choice

Use the table below to answer the following question(s) .
Dresden Pharmaceuticals has decided to go ahead and start clinical trials on a potential new drug. The total R&D costs are estimated to reach around $875,000,000 with clinical trials mounting to
$145,000,000. The current market size is estimated to be around 3,000,000 and is expected to grow at 4 percent every year. The market share Dresden hopes to capture in the first year is 7 percent, and is projected to grow by 25 percent each year for the next 4 years. A monthly prescription is anticipated to generate revenue of $420 while incurring variable costs of $150. A discount rate of 8 percent is assumed. $$\begin{array} { | l | l | } \hline \text { Dresden Pharmaceuticals } & \\\hline & \\\hline \text { Data } & \\\hline & \\\hline \text { Market Size } & 3,000,000 \\\hline \text { Unit (monthly Rx) revenue (\$) } & 420 \\\hline \text { Unit (monthly Rx) cost (\$) } & 150 \\\hline \text { Discount Rate (per cent) } & 8 \\\hline & \\\hline \text { Project Costs } & \\\hline \text { R\&D (\$) } & 875,000,000 \\\hline \text { Clinical Trials (\$) } & 145,000,000 \\\hline & \\\hline\end{array}$$
-Calculate the market share percentage in the third year.

• A) 25 percent
• B) 4 percent
• C) 11 percent
• D) 7 percent

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Definitions:

Price Reductions

Decreases in the selling price of goods or services, often to attract more customers or respond to market conditions.

Chief Purchasing Officers

Senior executives responsible for overseeing an organization's procurement strategies, ensuring the efficient acquisition of goods and services.

Supply Organization

A structured body or team within a company that is responsible for managing the sourcing, procurement, and supply chain processes.

Teams

Groups of individuals working together to achieve a common goal or task.