Eli Lilly and Company Case Analysis The case under analysis, Eli Lilly & Company, will be covering the positives and negatives with regards to the business situation and strategy of Eli Lilly. One of the major pharmaceutical and health care companies in its industry, Lilly focused its efforts on the areas of "drug research, development, and marketed to the following areas: neuroscience, endocrinology, oncology, cardiovascular disease, and women's health." Having made a strong comeback in the 1990's due to its remarkably successful antidepressant Prozac, was now facing a potential loss in profits with its patent soon to expire. The problem was not only the soon to expire patent on Prozac, but the fact that Prozac accounted for as much as 30% of total revenue was the reality Eli Lilly now faced. (Pearce & Robinson, 34-1) Summary of Key Strategic Issues In choosing to narrow its focus on its core pharma business in the 1990s, Lilly appears to have either deliberately or inadvertently made a choice to funnel their efforts into the category of neuroscience with the patented products Prozac and Zyprexa, Lilly's top sellers. Its imbalanced portfolio and lagging international sales was the consequence of its dependence on just a few key products. This type of a strategy with a focus on neuroscience was not well suited to the more cost conscious international regions whose focus was treatment of disease. Other factors that played against them were the regulations in non-US developed countries on pricing and payment programs for pharmaceutical drugs through national health insurance programs. Due to this fact, Lilly wouldn't have earned as high of a profit margin on its blockbuster drugs, Prozac and Zyprexa, in Europe and Japan as ... ... middle of paper ... ...exa products, the company faces numerous market challenges related to changing demographics, intensifying competition, industry consolidation, regulatory pressures and healthcare industry cost constraints. It is recommended that Lilly diversify its product portfolio, cautiously begin acquiring small firms, and work to change its organizational culture to encourage flexibility and organization-wide learning. References Gadiesh, Orit & Buchanan, Robin "The Leadership Testing Ground: Mergers May be the Truest Test of Great Leaders," Journal of Business Strategy, 23(2), pp. 12-17. Greenberg, Jerald Managing Behavior in Organizations (Upper Saddle River, NJ: Prentice Hall, 1996), pp. 132-133. Pearce II, John A., & Robinson, Jr., Richard B. (2005). Strategic Management: Formulation, Implementation & Control (9th ed.). The McGraw-Hill Companies, Inc., New York.
In Melody Peterson’s “Our Daily Meds” , the history of marketing and advertising in the pharmaceutical industry is explored. The first chapter of the book, entitled “Creating disease”, focuses on how major pharmaceutical companies successfully create new ailments that members of the public believe exist. According to Peterson, the success that these drug manufacturers have experienced can be attributed to the malleability of disease, the use of influencial people to promote new drugs, the marketing behind pills, and the use of media outlets.
Drugs must be researched and tried clinically before being made available to the public. The GlaxoSmithKline drug makers claimed that depression was caused by low levels of serotonin in the brain and that SSRIs restore the balance of the brain chemistry. Furthermore, GlaxoSmithKline sponsored professional medical researchers and psychiatrists to research the effects of SSRIs, and rewarded researchers who found positive results, which is considered unethical and immoral in the world of pharmaceutics and medical research. As most findings proved SSRIs effective, GlaxoSmithKline executives viewed themselves as fighters of depression. However, Professor Applebaum from the University of Wisconsin states that these companies seemed to “believe their products were effective and they were baffled that anyone should question their value” (Watters 528). Nevertheless, the GlaxoSmithKline, after years of advertising depression medication, found out that no scientific evidence proved the link between depression and serotonin depletion, or the role of SSRIs in balancing the brain’s chemistry. Scientists found that SSRIs actually reshape the brain’s chemistry, which leads to the conclusion that these anti-depressant drugs should have not
...pecially with the use of DTC advertising, to such a wide range of afflictions greatly increased their consumer base, but one of them proved to be deadly. In 1999, four years after Lilly sent study results to the U.S. Food and Drug Administration showing Zyprexa didn’t alleviate dementia symptoms in older patients, it began marketing the drug to those very people, according to documents unsealed in insurer suits against the company for overpayment.(Applbaum, 248). Soon after it began to be used in those suffering from dementia, there were studies produces that showed an increase in death rate among elderly patients taking Zyprexa. In January of 2009, Eli Lilly and Company, who produced the drug, ended up settling the lawsuit and agreed to pay $1.415 billion which was one of the biggest corporate settlements in the history of pharmaceutical companies (Applbaum, 237).
Lehman, Bruce. 2003. “The Pharmaceutical Industry and the Patent System”. International Intellectual Property Institute. Pages 1-14.
Eli Lilly is the 10th largest pharmaceutical company in the world and is dedicated to creating medicines that help improve peoples' quality of life. Eli Lilly is also the world's largest manufacturer and distributor of psychiatric medications and was the first company to produce penicillin and insulin. Eli Lilly's products help meet medical needs in the fields of oncology, cardiovascular, diabetes, critical care, neuroscience, men’s health, and musculoskeletal.
Cropper, Carol Marie. “A Cloud Over Antidepressants” Businessweek 3880 (2004): 112-113 Business Source Premeir. Web. 28 Jan. 2014
Threat of new entrants is relatively high. Companies forming alliances are potential rivals. Even if earlier such company was not considered to be a threat, after merging with some research and development company or forming alliance with another pharmaceutical company it would become a rival to Eli Lilly. The threat is however weakened by significant research and development costs necessary to successfully enter the business. Eli Lilly’s focus on a relatively narrow market of sedatives and antidepressants weakens the threat of new entrants, but other products that form lesser part of company’s sales such as insulin and others are exposed to high threat of new entrants. The need of obtaining certificates and licenses also weakens the threat of new entrants. Discussed above leads to the conclusion that threat of new entrants is medium.
Although monopolies appear damaging at times, there are arguments that they are an advantage to society. Monopolies in the pharmaceutical industry drive companies to pursue research and development (R&D) efforts to gain new patents. According to a 1992 study, among the 24 US. Industry groups, pharmaceuticals dedicated 16.6% of their amounts to basic research, while all other industries averaged at 5.3% (Sherer 1307). This fact validates the incentive pharmaceutical companies have to get a patent and acquire more power. Pfizer encourages R&D because of the incentives and a want to obtain patents to receive more profit. Pfizer has to promote itself to be successful, creating a good brand image that consumers will trust. If the company can advertise successfully, more consumers will purc...
The company assures the researchers it brings in, like Applebaum, that they want to "fight" depression, anxiety, and social phobia (527). It is almost their calling to bring light to these diseases, and they will use any means necessary. Applbaum says on this topic, "They seemed to believe their products were effective and they were baffled that anyone should question their value" (528). The way Applbaum describes this meeting with GlaxoSmithKline reveals some of their real intentions, making money. Applbaum says the company was "baffled" anyone would question their integrity. This is quite an exaggerated emotion. It seems like they were trying to hard to display good intentions and when were actually questioned, they were offended this exaggerated degree. They wanted to believe they were doing good and hid their real motives. They used "fighting depression" as a means to make money. If they were really in the market for the benefit of the Japanese people, they could have had a cleaner campaign. The only reason GlaxoSmithKline can say they are in the market for the sake of the Japanese people, is because their product has shown results. Pxil and other serotonin leveling drugs have worked in some cases, but Paxil is not the magic pill that can cure depression, GlaxoSmithKline is making only it seem like
Psychiatry is a medical field that deals with the diagnoses, prevention, and treatment of mental disorders. The FDA is constantly approving drugs for psychiatrists to use that are supposed to help with in their practice. For example, Michael Levin-Epstein, who wrote the article “A New Way to Deliver Psychiatric Meds: Drugs for ADHD and Major Depression Now Can Be Delivered with Skin Patches,” shows how pharmacotherapy is continually being advanced by new ideas and approaches. However, Psychiatric drugs are not always the answer. Prescriptions are not a good remedy when it comes to the overcoming of a mental illnesses, because there is not enough information regarding the effects of the drugs, pharmaceutical companies are driven by profits,
Merck had a reputation of providing the best research in order to find the cure for diseases such as AIDS, tuberculosis, hypertension. They spend on average around $3 billion dollars on research on a yearly basis. However, they needed to produce a drug that would take Merck to the next level. Merck created Vioxx which was designed to treat osteoarthritis and in May 1999, the FDA approved Vioxx making it available with a medical prescription (Snigdha., 2007).
10. Collis, David, and Troy Smith. "Strategy in the Twenty-First Century Pharmaceutical Industry:Merck&Co. and Pfizer Inc." Harvard Business School, 2007: 8-12.
1. How did L’Oreal become the world’s largest beauty company? What was the role of acquisitions in this growth?
According to the Eli Lilly SEC filing, “Promotion, marketing, manufacturing, and distribution of human pharmaceutical and animal health products are extensively regulated in all major world markets.”17 In fact, in most major markets, all operations of the company are extremely regulated all at the expense of the company including Federal Drug Administration, U.S. Department of Agriculture, U.S. Environmental Protection Agency, European Medicines Agency, Ministry of Health, Labor and Welfare, Department of Health and Human Services, Federal Trade Commission, Office of Personnel Management.
pharmaceutical companies that profit from the high costs of drugs. It is evident that there is a