Preliminary, Subject to Change Posted: 08/08/2024
The Business of Pharmaceuticals
University of Chicago Booth School of Business
Date of Course Fall 2025
Days Thursdays 6-9pm
Location Gleacher
Course Description
This course introduces key contemporary and emerging issues in the US healthcare and
pharmaceutical industry. Part I provides (a) a grounding in the industry’s institutional features, in
particular the role played by the Food and Drug Administration (FDA) in regulating the sector, (b) an
overview of key stakeholders involved in drug launch and commercialization, and (c) each
stakeholders’ economic incentives in this competitive market. Once students understand the
landscape, stakeholders, and incentives, Part II will turn to (a) the interplay between the
stakeholders, (b) the current and anticipated changes to this highly dynamic industry, and (c) focus
on recent Policy updates, emerging product categories, and a critical consideration of the future of
healthcare delivery and payment in the US.
Objectives
Students should gain a holistic understanding of the institutional features of healthcare in the US.
When analysing topical articles, industry financial news, and case studies, students should be able to
apply this understanding to evaluate new challenges faced by the industry as a whole and shifting
incentives for key stakeholders.
By the end of the course, students should understand:
- the structure of the pharmaceutical industry within the US healthcare system, the key
stakeholders that drive it, and each stakeholder’s economic incentives
- the different stages and requirements of the FDA approval process
- the significance of particular development designations, including Fast-Track, Breakthrough
Therapy, Priority Review and Accelerated Approval
- the various stakeholders involved in the launch of a new drug and explain their unique
incentive structures
- a foundational understanding of current reimbursement models (Part D vs Part B) and
explain how emerging therapies are challenging the current structure of payment and
reimbursement
- the key features to a commercialization strategy, including how Pharma and Biotech set the
price for their drug and the various associated economic levers that impact drug utilization
(PBM rebates, co-pay cards, GPOs)
The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 08/08/2024
Course Code and Date
- the growing importance of drug categorization (eg precision medicine, specialty drugs,
biosimilars as compared to traditional brand drugs)
- the competitive threats that new entrants face, be it from emerging technologies or generic
drug launches
- the significance of new Cell and Gene Therapies and challenges in commercialization of
these high-cost drugs
- the key features of the 340B drug pricing program, briefly evaluate its impact on vulnerable
groups and outline relevant controversies associated with the program
- the role government and pharmacy benefit managers (PBMs) play in managing the price and
use of drugs by patients and the power of the customers they serve (patients, retailers,
health systems)
- the relevant features of the 2022 Inflation Reduction Act and impact on pharma and biotech
pricing
Readings
The main course textbook is Campbell, J. J. (2008) Understanding Pharma: The Professionals Guide to
how Pharmaceutical Companies really work, Pharmaceutical Institute, Raleigh.
Additional weekly readings listed below.
Evaluation
Case Write-Ups (60%)
Students will be required to respond to questions for 3 of 5 case prompts. Students may
work individually or in teams of two to respond to the cases.
Discussion (20%)
Students will be offered opportunities to participate in discussion in each class. This will be
graded on their level of preparation, the clarity of contributions and the attention to and
engagement with the topic of discussion.
Final Essay (20%)
Students will be given three prompts related to a controversial topic impacting the industry.
Essays should demonstrate a detailed understanding of the specificities of the case, its place
in the wider healthcare landscape, and a thoughtful strategy on how they would approach
posed prompt should they be executives at a leading stakeholder firm.
Week 1 Introduction to the Pharmaceutical Industry
Readings: Understanding Pharma - Chapter 1 and 2
1. IQVIA Use of Medicines in the US 2023 (link)
2. WSJ: Keeping High Price EpiPen in Consumers Hands (link)
Week 2 Drug Discovery and Development
Readings: Understanding Pharma - Chapter 4 and 5
1. FDA Drug Approval Pathway (link and link)
2. Pathway from Idea to Regulatory Approval (link)
3. Drug Development Process (link)
The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 08/08/2024
Course Code and Date
4. How much do clinical trials cost? Nature (link)
Week 3 Product categories and the threat of competition and substitution
1. Small Molecules vs Biologics (video)
2. Biosimilars in the US 2023-2027 (link), Webinar (link)
3. McKinsey - Biopharma Strategies in Cell & Gene Therapy (link)
4. Institute for Clinical and Economic Review – Final Report on Gene
Therapies (link)
5. BCG New Drug Modalities (link)
Week 4 Market Access Considerations & Competitive Strategies
Readings: Understanding Pharma - Chapter 8
1. Webinar: Top 3 Questions Facing New Launches (link)
2. PharmaExec: Key Factors for Successful Drug Launch (link)
3. WSJ: How Pfizer set the cost of its new drug? (link)
4. WSJ: Drug Prices reach a new high (link)
Case: Abbott Laboratories and Humira: Launching a Blockbuster Drug
Week 5 Key Stakeholders and their Incentives
Readings: Understanding Pharma - Chapters 3, 10, and 12
1. Follow the Dollar (link and link)
2. Gross to Net (link)
Case A: Cost Plus Drugs
Case B: Cardinal Health
Guest Speaker: McKesson Corporation
Week 6 Drug Pricing & Reimbursement Economics
Readings:
3. Prescription Economics in the US Drug Channel (link)
4. Nephron Research: Trends in Profitability and PBM compensation (link)
5. Unintended Consequences of the 340B program (link)
Case: Merck: Pricing Gardasil
Week 7 Hot Topics – Challenges for Emerging Categories (eg, Cell & Gene)
Readings:
1. CMS Payment Models (link)
2. Cell and Gene Market Access Report 2023 (link)
3. American Pharmaceutical Review C&G Therapies (link)
4. Innovative Payer Engagement Strategies (link)
Guest Speaker: J&J
Week 8 Hot Topics – PBMs and Increasing Transparency
The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
Preliminary, Subject to Change Posted: 08/08/2024
Course Code and Date
Readings:
1. Examining Misaligned Incentives (link)
2. White Bagging Update 2023 (link)
3. Do Plan Sponsors Understand how their PBMs make money? (link)
4. Investors Daily- CVS Dives as BCBS partners with Cuban (link)
Case: MannKind Corporation: Take a Deep Breath, This Time Afrezza Will Work
Guest Speaker: Arch Ventures
Week 9 Hot Topics – The Inflation Reduction Act: What to Do About Rising Costs in a High-
Cost Industry
Readings:
1. KFF – Explaining the Prescription Drug Provisions of IRA (link)
2. Mitigating the Inflation Reduction Act’s Adverse Impacts on the
Prescription Drug Market (link)
3. CMS Selects First 10 Drugs for Negotiations (link)
Guest speaker: Policy Executive
The information contained in these documents is confidential, privileged and only for the information of the intended recipient and may not be used,
published or redistributed without the prior written consent of the Booth faculty member(s) teaching the course.
