Massachusetts Institute of Technology is delighted to announce a Free Online Course on Healthcare Finance. In this course, students will gain the background, resources, and framework to influence the healthcare industry.
This course covers the role of finance in the healthcare industry, with particular emphasis on the application of novel financing methods to facilitate drug discovery, clinical development, and greater patient access to high-cost therapies. This course will start on February 12, 2019.
Course At a Glance:
Length: 12 weeks
Effort: 4-6 hours pw
Subject: Business & Management
Institution: Massachusetts Institute of Technology
Certificate Available: Yes, Add a Verified Certificate for $49 USD
Session: February 12, 2019
Massachusetts Institute of Technology – a coeducational, privately endowed Research University. The university is dedicated to advancing knowledge and educating students in science, technology, and other areas of scholarship that will best serve the nation and the world in the 21st century.
Unit 0: Introduction to Healthcare Finance
- Current Challenges in Healthcare Finance
- Biomedical Megafund FAQs
Unit 1: Present Value
- Market Efficiency, Wisdom of Crowds and Madness of Mobs
- Time Value of Money, and Drug Pricing Examples
- Buying Cures vs. Renting Health
Unit 2: Capital Budgeting
- Cash Flows, NPV and IRR
- Genentech and Herceptin Funding Example
- Volatility, Risk, and Uncertainty: Framework and Application to Drug Approval
Unit 3: Stocks and Bonds
- Dividend Pricing Model
- Corporate Bonds
- Debt in the Bio pharma Industry
Unit 4: The CAPM and Diversification
- The CAPM
- Arbitrage Pricing Theory
- Portfolio Theory: Examples and Special Cases
- Portfolio Theory in a Biomedical Context
Unit 5: Options
- Option Pricing Theory
- Real Options and Biomedical Examples
- Monte Carlo Simulations
Unit 6: Clinical Trials
- Drug Development & Clinical Trials
- Randomized Clinical Trials
- Statistical Framework for Clinical Trials
- Bayesian Adaptive Trials
Unit 7: Venture Capital and New Business Models
- Introduction to VC financing
- The Term Sheet
- Biotech Valuation
- Venture Philanthropy
Unit 8: Securitization
- The Financial Crisis and Securitization
- Mega funds & Their Limits
Unit 9: Healthcare Analytics
- Risk and Return in the Biopharma Industries
- Clinical Trial Success Rates
- Predictive Analytics for Drug Approvals and Clinical-Phase Transitions
- Bayesian Decision Analysis for Randomized Clinical Trials
Unit 10: Pricing, Insurance & Ethics
- Pricing & Ethics
- Pricing Issues for Cancer Drugs
- Value vs Price
About This Course:
Funding for fundamental science and early-stage transnational medicine is becoming scarcer, and at the worst possible time—when we now have the scientific and engineering expertise to make major breakthroughs in our understanding of the molecular basis of many deadly diseases and how to treat or prevent them. The dearth of funding for translational medicine in the so-called “Valley of Death” can be attributed to several factors, but a common thread among them is increasing financial risks in the bio pharma industry and greater uncertainty surrounding the economic, regulatory, and political environments within the biomedical ecosystem. Increasing risk and uncertainty inevitably leads to an outflow of capital as investors and other stakeholders seek more attractive opportunities in other industries.
By applying financial techniques such as portfolio theory, securitization, and option pricing to biomedical contexts, more efficient funding structures can be developed to reduce financial risks, lower the cost of capital, and bring more life-saving therapies to patients faster.
- Basic financial analysis for the life-sciences professional
- The historical financial risks and returns of the bio pharma industry
- Capital budgeting for pharmaceutical companies
- Drug development and clinical trials
- The mechanics of biotech startup financing
- Biomedical mega funds and drug royalty investment companies
- Healthcare analytics and machine learning
- Pricing, value, and ethics
- Andrew W. Lo is the Charles E. and Susan T. Harris Professor at the MIT Sloan School of Management.
- Shomesh E. Chaudhuri is a postdoctoral associate at the MIT Laboratory for Financial Engineering.
- Zied Ben Chaouch is a graduate student in MIT’s Department of Electrical Engineering and Computer Science and in the MIT Laboratory for Financial Engineering.
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