Page 9 - CIMA SCS Workbook November 2018 - Day 1 Tasks

Chapter 3

NOVAK PHARMACEUTICALS -

FAMILIARISATION

1 INTRODUCTION

It is absolutely crucial that you completely familiarise yourself with the pre-seen information prior
to attempting the Case Study exam. Merely reading through the materials is unlikely to be
sufficient and it is also important that you consider which aspects of the three technical subjects
may be useful and relevant for the Case Study.
The exercises in the following three chapters will help you to gain a thorough understanding of
the Case Study scenario and ensure you are fully prepared to attempt the Practice Tasks later in
this Workbook.
Solutions to these exercises are provided but are not exhaustive. It is important that you attempt
the exercises yourself and makes notes of your answers before reviewing the solutions.

2 OVERVIEW OF PRE-SEEN

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Novak Pharmaceuticals is the 7 largest pharmaceuticals company in the world by revenue. It is
based in the country of Cronland and reports results in the C$.

The pharmaceuticals industry has sales of over US$1.1 trillion a year, and has several large
companies in it, although no single company accounts for more than 10% of the market. Details of
the 16 largest companies by both sales and market share are given in the pre-seen, including
Novak.
The pharmaceuticals industry is taken to mean the development and production of drugs that
need to be prescribed for human beings. It does not include, for the purposes of this case,
medicines that can be just bought over the counter (such as aspirin), other medical products (such
as bandages), or veterinary products.

Pharma companies spend huge amounts of money each year on research and development.
Whilst many projects are started, only a small minority will result in a product that earns sales – it
is estimated that as many as 90% of all projects are abandoned during research and testing.

A successful drug can take many years to develop and bring to market. After the initial compound
has been produced, the drug has to negotiate successfully a series of clinical trials before it can be
licenced for sale. For this reason, and the high failure rate mentioned above, pharma companies
must continually invest hundreds of millions of dollars each year in research in order to produce
the revenue-earning products of the future.

KAPLAN PUBLISHING 5