Former BCG decision round interviewer with 300+ real interviews in 8 years
Book a coaching

Market Sizing and pricing of a new drug

Anonymous A


If i wanna size the market in US for a speciality drug (still under development) that doesnt come under the umbrella of Insurance companies, how should I do it . (speciality is improving hair growth) .

Also how should I price it ? ( I have the Cost of manufacturing 1 USD/ tablet)

replied on 04/24/2018
Former BCG decision round interviewer with 300+ real interviews in 8 years

I would start with clarifying whether objective of case is to just maximize revenue or profit or if it is to reach a certain revenue or margin threshold (absolute or %) by within a certain period of time and if so what that is.

Then I would continue by (A) estimating the # of people in US that would benefit from using the drug that is object of the case. In case context I would simply ask this directly, in real life I would use a survey or look if medical research has any data on incidence of the phatology this drug addresses.

Then I would ask (B) what % of said population has the willingness to pay for the drug according to different price points (C) - again in real life I would do that through quantitative research. I would finally ask about posology of the drug (e.g. is this a one time pill the solves the problem for the person forever or is this a pill one needs to take once a day/week/month or multiple times a day?) and translate that into number of pills needed per patient on an yearly basis (D) or your timeframe of choice.

Then I would multiply # of people affected by the disease (A), by different price points (C), by the # of yearly pills needed per patient (D) and by the % of affected that is willing to purchase drug at said price point (B). I would repeat the same calculations to calculate profitability (so instead of multiplying by C, you will multiply by C-1). This will give you different market sizes and profitabilities according to price points and, based on the clarified objectives of above, it will tell what is the launch price the client should choose.

You can get more sophisticated by adjusting stated purchase intent down to actual purchase percentage.

Hope it helps,


Related BootCamp article(s)

Market Sizing

Market Sizing Cases are used to test your quantitative and reasoning skills. The interviewer evaluates your structure, numbers-handling and business sense.

14 Comment(s)

Important Facts

It's essential to know some key figures regarding geographies, population, economies for your case interviews. We summarized them for you here.

9 Comment(s)

Related case(s)

Your client, large automotive OEM WyCar, has developed its first fully electric vehicle (EV) and introduced it as a pilot on the Austrian market last year. However, sales have been far below the expected numbers. The management has engaged you to support them in understanding the reasons and advise ... Open whole case


Solved 34.4k times
4.5 5 995
| Rating: (4.5 / 5.0) |

Nutripremium is a very well-known premium nutrition food company in Europe (€1 billion revenue last year). It is based in Spain and has an excellent market share not only in its home country but also in Portugal, France, Italy and Germany. Nutripremium has two main lines of products: Vitam ... Open whole case

Children vaccine

Solved 31.9k times
4.4 5 925
| Rating: (4.4 / 5.0) |

Beyer, one of the biggest pharmaceutical companies in the world, just invented a very reliable vaccine against Chickenpox, a disease that affects children in the age from 2 to 16 years. Beyer came to you wondering what their potential sales in Europe in the first year would be if they launched th ... Open whole case

Gas station

Solved 22.9k times
4.3 5 440
| Rating: (4.3 / 5.0) |

How many gas stations are there in Paris? Suppose a friend of yours wants to open a gas station in Paris. What aspects should he consider? Open whole case

Airport taxi

Solved 14.2k times
4.7 5 1178
| Rating: (4.7 / 5.0)

Dubai Airport has decided to counter the chaos in the airport taxi service by commencing a bidding process to assign airport taxi services to 3 operators only. After years of cheating passengers, black-market drivers and unlicensed cabs, the airport has had enough of the problems and is now taking a ... Open whole case