Project+Instructions

__**Drug Cost Analysis Project**__ __**100 Points**__ //__**Introduction**__//

You are working for a large pharmaceutical company in New Jersey as a chemist, and the company is planning the production of a new type of treatment for Alzheimer’s disease. The chemistry has been developed according to Equations 1 and 2 below (unbalanced):

**Equation 1:** C6H6O + CO2 + NaOH  C8H3O5Na3 + H2O

**BALANCED**: (phenol) (carbon (sodium (intermediate) (water) dioxide) hydroxide)

**Equation 2:** C8H3O5Na3 + H2SO4  C8H6O5 + Na2SO4

(intermediate (sulfuric (final (sodium from eq. 1 above) acid) product) sulfate)
 * BALANCED:** [[image:equation_2.png width="633" height="31"]]

__**Making 500g for Early Clinical Trial Testing**__ The project leader has just received notice from the VP-Manufacturing that your Division has been tasked with determining the site(s) and total cost of manufacture of 500 g of the drug. A tentative manufacture start date of Nov. 15, 2011 has been identified. The team has 16 days from start to finish to complete the manufacturing phase of the project.

Your company has four manufacturing sites available to them:

Site 1 - Cambridge, MA - Cassidy Site 2 - St. Louis, MO - Sarah Site 3 - Palo Alto, CA. Site 4 – San Antonio, TX

Strict cost requirements on the manufacture and transportation of chemical or drug intermediates must be considered. Each site has varying advantages and disadvantages based on availability of reactants, costs, reaction yields, geographic location, etc.

You will determine a means to meet the goals of the Vice-President which identifies cost and timely manufacture the primary criteria of site selection.

As mentioned, each site has particular restrictions on manufacture. These are as listed as follows:

Equation 1 – There is only 275 g of phenol and 269.4 g of sodium hydroxide available. There is as much carbon dioxide as needed. Equation 2 – Only 300 g of sulfuric acid is available. Equation 1 – 250 g of phenol and an unlimited supply of other reactants are available. However, the site is aging and will only yield 90% on equation 1. Equation 2 – The site will only yield 95% on equation 2. There is enough sulfuric acid to make as much product as you like. Equation 1 350 g of phenol is available, but is only 81% pure. You have enough of all other reactants Equation 2 - There is a manufacturing variability (apparent spillage) associated with the addition of the sulfuric acid in equation 2, leading to a equation 2 yield that varies between 79 and 92%. __Equation 1__ – 250 g of phenol, 170g of CO2 and unlimited sodium hydroxide is available __Equation 2__ – Unlimited amount of sulfuric acid, but your yield is 98%
 * ** Site 1 **
 * ** Site 2 **
 * Site 3
 * **Site 4**

__**Material Costs**__


 * **Material Costs** ||  ||   ||   ||   ||
 * || **phenol** || **carbon dioxide** || **sodium hydroxide** || **sulfuric acid** ||
 * ** Site 1 ** || $11 || $7 || $5 || $3 ||
 * || per gram || per gram || per gram || per gram ||
 * **Site 2** || $28 || $7 || $5 || $5 ||
 * || per gram || per gram || per gram || per gram ||
 * Site 3 || $41  ||  $11  ||  $9.75  ||  $17  ||
 * || per gram  ||  per gram  ||  per gram  ||  per gram  ||
 * **Site 4** || $11 || $3.50 || $7.75 || $6.00 ||
 * || per gram || per gram || per gram || per gram ||
 * Site 3 || $41  ||  $11  ||  $9.75  ||  $17  ||
 * || per gram  ||  per gram  ||  per gram  ||  per gram  ||
 * **Site 4** || $11 || $3.50 || $7.75 || $6.00 ||
 * || per gram || per gram || per gram || per gram ||
 * || per gram || per gram || per gram || per gram ||

__**Profit/Loss for the Company**__

The 500g of the drug have been created in this project for use in early clinical trials to determine whether the chemical compound is both safe and effective. That does not necessarily mean that a drug will be produced. It might cost more to research and develop the drug than it can make back during its period of exclusivity (the time in which its patent is still in force).

A financial analysis needs to be determined to see if the company will make a profit over the period of time it sells it. Your group needs to see how long it would take for the drug to be profitable (make back all of its R&D costs and pay for the cost of making the drug). If it takes longer than twelve years (the average life left of a patent after a drug is first marketed), then the drug is not profitable and the drug should not be developed. Your group needs to write a presentation to be shown to the company’s Board of Directors recommending further development due to profitability or project termination due to high costs.

It is projected that:
 * The R&D cost of bringing this drug to market is $900,000,000 (that’s not a typo!)
 * 300 **kg** of this drug will be needed every year once approved by the FDA for 12 years (this material cost, based on your calculations for 500g, must be included in the overall cost of the project)
 * Each tablet will contain 20mg of the drug
 * Each tablet is estimated to be sold for $7.00

__**DELIVERABLES**__

__**YOUR PRESENTATION MUST INCLUDE:**__
 * 1) __**PRESENTATION (GOOGLE PRESENTATION)**__
 * Defining the problem (i.e. the goal of the presentation)
 * The manufacturing site(s) you chose to produce the drug based on your 500g calculations and why (cost analysis). Show cost from the best site(s) to make 500g
 * The requirements that you had to consider in your financial analysis (costs for the drug as well as R&D costs)
 * Cost of 400kg of the drug as well as R&D costs
 * Your results (Is the drug profitable? If so, how much PROFIT will the company make? How many years is it until the company reaches profitability? If the drug is not profitable, how much money would the company lose by selling it?) A graph here would be helpful to visualize.
 * Your recommendation as to whether to continue with development and sell the drug

__**YOUR REPORT MUST INCLUDE:**__
 * 1) __**REPORT (MS WORD WITH MATHTYPE + GOOGLE SPREADSHEET)**__
 * A minimum of five pages
 * An introduction which includes a definition of the problem, an overview of each manufacturing site, balanced equations, and a recommendation as to which site(s) to use and why. Include the cost of producing 500g, 400kg, the amount of time necessary to make back all costs, and the assumptions you made (price per pill, etc.)
 * Readable screenshots or inserted files showing key areas of your spreadsheets (tables that show your results in an easy to read fashion)
 * APPENDIX A: All calculations shown for the production of 500g of drug at site 2 (ONLY) using WORD/MATHTYPE. This is a sample calculation.
 * APPENDIX B: All calculations shown for Profit/Loss section AS A GOOGLE SPREADSHEET SCREENSHOT (using “Show all formulas” button)

**In addition to these, your entire Google spreadsheet, using formulas, will be assessed for accuracy.**


 * 1) __**A GROUP WIKISPACE SPECIFICALLY FOR THIS PROJECT**__
 * Must include links to Google Spreadsheet and Google Presentation
 * Must include copy of group contract
 * Must include an uploaded Word/MathType file with sample calculations
 * The Wiki name must start with your Period number

__**Drug Synthesis Cost Analysis**__

**Grading Rubric**

**100 Total Points**

**10** || * **One formatting feature is not used (except for Google Spreadsheet formulas)**
 * || **Awesome** || **Admirable** || **Not Acceptable** ||
 * **Formatting**
 * (10 points)** || * **All formatting features are followed (Equations in MathType, formulas used in Google Spreadsheet, proper tables used in report to summarize data including descriptive titles, third person writing ONLY)**

**5** || * **Either Google Spreadsheet formulas are not used; or two or more formatting features are not used**

**2** || **9-10** || * **Introduction could be clearer due to the writing or because one of the items listed in “Awesome” is absent**
 * **Introduction**
 * (5 points)** || * **Introduction is clear and concise, stating what you were charged with solving, where the drugs can be made, and the balanced equations**

**6-8** || * **Introduction is not clear and several items listed in “Awesome” are missing**

**0-5** ||
 * **Data Tables**
 * (5 points)** || * **All data is properly recorded in each table. Each table clearly exhibits the data and calculation answers in an easily understandable format**

**5** || * **One to three transcription errors to the data tables (answers in calculations do not match answers in the table)** **3-4** || * **There are many errors in the data tables**
 * **Each table is slightly confusing to understand making analysis difficult**
 * **The tables are very confusing making analysis nearly impossible**

**1-2** ||
 * **Calculations – Product that can be made**
 * (20 points)** || * **Calculations for each site are clearly labeled, easily followed and understandable, including ALL UNITS.**
 * **Calculations are accurate in their use of molar masses, molar ratios, limiting reactant, and yields (>85% correct values)**

**16-20** || * **Calculations are not labeled by site or are not easily followed and understandable** **10-15** || * **Calculations are not labeled by site AND are not easily followed and understandable** **5-10** ||
 * **ALL UNITS were not always shown or used**
 * **Calculations are accurate in their use of molar masses, molar ratios, limiting reactant, and yields (>60% correct values)**
 * **UNITS were rarely shown or used**
 * **Calculations are NOT accurate in their use of molar masses, molar ratios, limiting reactant, and yields (<60% correct values)**
 * **Calcuations – Cost and Profit/Loss**
 * (10 points)** || * **Calculations for each site are clearly labeled, easily followed and understandable, including ALL UNITS.**
 * **Calculations are accurate in their use of reagent mass calculations and costs (>80% correct values)**

**8-10** || * **Calculations are not labeled by site or are not easily followed and understandable**
 * **ALL UNITS were not always shown or used**
 * **Calculations are accurate in their use of reagent mass calculations and costs (>60% correct values)**

**5-7** || * **Calculations are not labeled by site AND are not easily followed and understandable** **0-4** || **20-25** || * **The result is clearly defined through site selection based on your cost analysis**
 * **UNITS were rarely shown or used**
 * **Calculations are NOT accurate in their use of molar masses, molar ratios, limiting reactant, and yields (<60% correct values)**
 * **Results (Discussion in Report/Google Presentation Product**
 * (30 points)** || * **The result is clearly defined through site selection based on your cost analysis.**
 * **The choice is defended in writing by the analysis of the data and calculations**
 * **The logic of how you came to your answer is provided in paragraph form in a clear, error free way.**
 * **The choice is explained, but not to the extent that your reasoning can be totally followed.**
 * **There are flows in your logic**

**15-20** || * **The result is NOT clearly defined through site selection based on your cost analysis**
 * **The choice is not clearly explained or explained at all**
 * **The argument cannot be followed at all or very little**

**0-14** || **18-20** || * **One of these:**
 * **Group Participation**
 * (20 points, Individual grade)** || * **You have a “laser-like” focus on this project from start to finish during class. You have no distractions, are participating actively in group discussions, and diligently working on your tasks as assigned by the group. Anything that your group decides is due in the interim is completed on-time.**
 * **You were found to be off-task more than once**
 * **You were not actively participating in group discussions**
 * **You were not working diligently on your assigned task**
 * **You did not complete tasks on your group’s deadline**

**14-17** || * **More than one of these:** **4 points off for each** **0-12** ||
 * **You were found to be off-task more than once**
 * **You were not actively participating in group discussions**
 * **You were not working diligently on your assigned task**
 * **You did not complete tasks on your group’s deadline**