A pharmaceutical company wants to claim that side effects ex

A pharmaceutical company wants to claim that side effects experienced by patients using a particular drug will be less than 20%. In a clinical trial of 400 patients. 17% of patients experienced side effects. a. Please provide the test statistic and the corresponding p-value. b. Would you support the drug to be marketed?

Solution

We are given that A pharmaceutical company wants to claim that side effects experienced by patients using a particular drug will be less than 20%.

H0 : p = 20% = 0.2 Vs H1 : p < 0.20

p is the population proportion.

number of patients (n) = 400

percentage of patients experienced side effects = 17% = 0.17

p^ is the sample proportion.

The test statistic for testing the claim is,

Z = (p^ - p) / sqrt[p*q / n ]

where q = 1 - p = 1 - 0.20 = 0.80

Z = (0.17 - 0.20) / sqrt [ (0.20*0.80)/400) ]

Z = -0.03 / 0.02

Z = -1.5

P-value we can calculate by using EXCEL.

syntax :

=NORMSDIST(z)

where z is the test statistic value.

P-value = 0.066

alpha = 0.05

P-value > alpha

accept H0 at 5% level of significance.

Conclusion : There is not sufficient evidence to say that side effects experienced by patients using a particular drug will be less than 20%.