INFUSE

Operations Low difficulty

Healthcare Interviewer-Led case

This case focuses on a biotech company preparing for the launch of a new Alzheimer’s treatment. The
company anticipates some operational challenges when the treatment launches and is trying to get
ahead of those challenges. This case tests all elements of the scorecard.

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Problem definition

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A leading biotech company is developing a treatment for Alzheimer's disease. This ground-breaking
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treatment is different from any other Alzheimer's treatment on the market because it actually slows the
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progression of the disease, rather than just treating its symptoms.

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The company’s executive team is concerned about the results of a high-level internal feasibility study
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that flagged a potential risk to the launch of this treatment – a rumored shortage of infusion capacity in
the US. Given that the Alzheimer's treatment is designed to be administered via infusion, such a
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shortage would severely hamper the market acceptance and hence the financial rewards from the
treatment.
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In preparation for the launch of this treatment, the company has hired you to help them figure out
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the extent of the expected shortfall, and how they should respond.

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Question 1 (Structuring)

How would you approach solving this problem?

Additional information

If asked, share that:

• Infusion refers to inserting the medicine directly into a patient’s bloodstream via IV (intravenous)
application, ideally through the patient’s arm.
• The treatment will be launched in the US alone.

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• The client has not yet estimated how big the infusion shortfall will be.

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• The client does not have any strategies to mitigate the shortfall.

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• Most other Alzheimer’s medications are delivered as oral pills.
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The treatment (if approved by the FDA) would come to market in about 2 years.
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Possible answer
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1. What is the expected shortfall in infusion capacity?

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a. What is the infusion capacity required to deliver the Alzheimer’s treatment?

How many people in the US have Alzheimer’s?
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i.
How many Alzheimer’s patients will seek this treatment?
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ii.
iii. How frequently and for how long does this infusion need to be administered?
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b. How much free infusion capacity is expected in the US at the time of product launch?
c. What is the expected shortfall/gap in infusion capacity?
2. Why is there a shortfall in infusion capacity?
a. Infrastructure gap? (e.g., not enough providers or equipment to administer infusions)
b. Skills gap? (e.g., providers don’t know how to administer infusions)
c. Incentive misalignment? (e.g., providers don’t want to offer infusions)
d. Logistics issue? (e.g., capacity overwhelmed in certain geographies but sitting idle in others)
3. How can the shortfall in infusion capacity be mitigated?
a. Reduce the demand for infusion capacity
b. Increase the supply of infusion capacity

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Question 2 (Numeracy)

How much do you estimate the shortfall of infusion capacity will be in the US for this treatment
when it enters the market?

Additional information
If asked, share that:
• 10% of people aged 60 - 80 have Alzheimer’s.
• We expect 50% of people with Alzheimer’s to try out/use our new treatment.
• The US is expected to have free capacity for 12M infusion hours per year at the time of launch for

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the Alzheimer’s treatment.

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• Current Alzheimer’s medications are oral pills. Therefore, no infusion capacity gets reallocated from

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Alzheimer’s patients switching from their previous medication.
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The candidate should ask about the infusion frequency and length. If the candidate doesn’t and just
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stops at the number of patients trying to get the treatment, the interviewer should remind them that they
need to estimate the infusion capacity shortfall.
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The interviewer should share that the infusion must be administered once every 3 months and takes 2
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hours to administer each time.

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Guidance for interviewer

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A strong answer will:

• Identify that not everyone with Alzheimer’s will try to get the treatment.
• Understand that the question focuses on infusion capacity - not just patient numbers - and proceed
to step 3 without prompting.
• Recognize which assumptions they cannot come up with on their own (such as how frequently the
treatment must be administered) and ask the interviewer for those assumptions.
• Build in an “operational inefficiency” buffer to the infusion time.

Possible answer

Step 1: Potential patient population

• Total US population = 320M
• Assuming equal distribution across ages means we’ll have 80M people in the 60 – 80 years of age
bucket.

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• The candidate can either make a logical assumption about the portion of that age group that has
Alzheimer’s or ask the interviewer. The interviewer should give the candidate 10% as the portion if
asked.
• 80M * 10% = 8M people.

Step 2: Actual patient population

• We know that not every person with Alzheimer’s will try to get the treatment due to factors including:
- Not getting appropriate diagnosed
- Not being prescribed the treatment / Not being deemed a good fit for the treatment
- Not having insurance that covers the treatment or not being able to afford the treatment
• The candidate should either make a logical assumption about the portion of people with Alzheimer’s

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who will try to get the treatment or ask the interviewer. The interviewer should give the candidate

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50% as the portion if asked.
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8M * 50% = 4M
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Step 3: Infusion hours

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The candidate should ask about how frequently the infusion must be administered and how long the
infusion takes. It is important for the candidate to identify that simply calculating the number of
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patients isn’t enough, as the issue at hand is infusion capacity. The interviewer should tell the
candidate that the infusion must be administered once every 3 months and takes 2 hours to
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administer each time.

• Every 3 months -> 4 times per year.
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4M * 4 times per year = 16M infusions per year

• 16M infusions per year * 2 hours per infusion = 32M infusion hours per year
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• A strong answer from a candidate will include a buffer (e.g., 20 extra minutes) into the 2-hour
infusion time for the realities of operations in healthcare clinics. If they assume 30 extra minutes,
then we get 16M infusions per year * 2.5 hours per infusion = 40 infusion hours per year

Step 4: Infusion capacity required and expected shortfall

• The infusion capacity required will be 32M – 40M infusion hours per year.
• Given that the US currently has free capacity for only 12M infusion hours per year, the shortfall for
our Alzheimer’s treatment is 20M – 28M infusion hours per year.

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Question 3 (Judgement & insights)

Based on this exhibit, what might be driving the shortage of infusion capacity?

Guidance for Interviewer

Share exhibit 1 immediately upon asking the question. If asked, inform the candidate that:
• Of all the players in the healthcare system, the medical practices have the most control over
available infusion capacity.
• Medical practices haven’t been keen to increase their infusion capacity.

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The candidate can then come up with hypotheses as to why this might be the case. Ensure that the

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candidate does not start investigating the solution space at this stage.
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A strong answer will:

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State key takeaways from the diagram at the start of the answer;
• Recognize the flow of money in the diagram and that medical practices need to have more revenue
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than costs, and;

• Tie medical practices’ need to make a profit to the idea that infusions are likely less profitable than
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other medical services.

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Possible answer
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My main takeaway from this diagram is that medical practices need their revenue to be greater than their
costs for them to stay in business.

The current infusion capacity shortage tells me that it is likely that profits on infusion are lower than the
profit on other services a medical practice can offer. The practice has limited resources - only so many
medical providers, so much physical space, so many hours - and so if the profit is low on infusions, they
are not incentivized to offer infusions.

We also know that infusions take a long time - 2 hours in the case of this treatment (compared with oral
pill administration). That might make it especially difficult for infusions to be profitable for medical
practices.

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Exhibit 1

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Question 4 (Creativity)

The client intends to introduce the new treatment to the market in 2 years.

How can the biotech firm mitigate the infusion capacity shortfall and what immediate actions can
they take?

Additional information
Let the candidate know that:

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• Demand reduction methods e.g., adjusting our product to require fewer infusion hours and/or

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changing the mode of delivery is currently not feasible as any alterations to product delivery will

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delay the launch by 3 years.

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While the government will not hinder our efforts to increase supply, they will also not actively

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help with policy or financing as well.
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Possible answer
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We can increase the supply of infusion capacity by:

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Addressing the infrastructure gap

• Create new treatment centers
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Improve infrastructure in existing medical/treatment centers

- Provide/upgrade infusion infrastructure
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- Facilitate discounts for infusion infrastructure (through partnerships and other means)
- Incentivize medical/treatment centers to hire specialized treatment staff

Addressing the skills gap

• Provide active/live training for medical staff to efficiently administer the new treatment
• Provide training material (Online/Offline) to enable medical staff to self-learn effective administration
of the new treatment

Addressing the Incentive misalignment

• Partner with insurance companies to reimburse a higher amount for this treatment
• Provide some profit kickback to partners across the value chain

Addressing any logistics issues

• Provide online infusion capacity tracking services for patients (e.g., appointment portal)
• Work with medical providers to ensure consistent treatment supply availability

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Question 5 (Synthesis)

What would you recommend to the client?

Possible answer

You have asked us the investigate how you can mitigate the anticipated infusion capacity shortfall when
your new Alzheimer’s treatment launches.

We estimated that the infusion capacity shortfall will be around 20M –28M infusion hours per year.

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Some of the strategies we developed to mitigate the shortfall include:

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• Addressing the current infrastructure gap through partnerships with existing medical centers or by

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creating new centers;
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Providing in-person or online training;

• Incentivizing infusion capacity provision with kickbacks across the value chain and;
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• Enabling patients to locate free capacity.

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As the next steps, we recommend that you start acting now on these strategies given your 2-year time to
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launch, as activities like partnerships and possibly creating new treatment centers would take
considerable time.
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