UCB was founded 1920s and their first blockbuster drug was Zyrtec; since then have focused on the anti-inflammatory drugs.1 Sanofi is also in the same field of drugs as UCB. Recently, UCB and Sanofi entered a strategic partnerships aimed at finding treatments for immune-mediated diseases such arthritis and gastroenterology.1 The terms of the agreement is that there is a 50:50 split on costs and profits.1 Also UCB entitled to initial upfront, preclinical and clinical development milestone payments from Sanofi that could exceed the amount of 100 million euros.1 The arrangements of the partnership are not publicized. The purpose of the partnership is to gain new products for their product development pipeline, which keeps both companies to continue being attractive in the market. There is an advantages for both companies to use their competitive assets, resources, and network and understanding of their sales, but is the partnership a smart decision for UCB and if not is there a better option.
Over the past years, the U.S. pharmaceutical industry R&D spending has increased at a rapid rate. Costs have been relatively stable in the preclinical phase, but have risen dramatically in the clinical phase both in terms of direct costs incurred and in time required to complete the trials.2 DiMasi reasoning for the increase in costs is from the focused development for chronic and degenerative conditions that require more costly studies for efficacy and larger clinical trial sizes.2 Some pharmaceutical companies found ways to fill their pipelines through: 1. mergers and acquisitions, 2. in-licensing new compounds, and 3. form strategic alliances and partnerships with other companies. Forming a partnership does help developing a product or drug...
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...erefore a justification for a higher prices for treatments because of the reduce cost of complications. Though the risk and cost will be focus on a smaller patient population which takes an effect on the volume sold. Biological-based drugs have longer periods of exclusivity, so the pharmaceutical companies can take advantage of the revenue of the drug and recoup the costs of R&D. Therefore, change in focus of treatment to large-molecule drugs is a more appealing option than a partnership.
Partnerships are a great strategic action to fight challenges with innovation and R&D. However, the high rate of partnerships failures, brings a doubt if it is worth it. There are many strategic alternatives for UCB to take such as changing the focus of treatment to large-molecule drugs that will improve R&D productivity and are less risky in comparison of small-molecule drugs.
It is more lucrative for drug companies to develop drugs for chronic illnesses as opposed to antibiotics because the chronic illness drugs will be far much cheaper to develop and will be sold for longer periods than antibiotic drugs which will need heavy investments to develop and be sold more sparingly over time.
Many businesses that achieve great success become greedy and want more. Pharmaceutical companies, such as Turing, have been overpricing life-saving
When people think of pharmaceutical companies, they instantly associate the word pharmaceutical with medicine. There are scientists solely dedicated to find the remedy to cancer and incurable diseases. These professionals have devoted their educated lives to help the ailing human population recover.
For many years researchers have endeavoured to enhance current methods in cervical screening which utilises the Papanicolaou smear (also known as a Pap smear). Limitations in the smear have caused major emphasis to increase sensitivity and specificity whilst also creating an automated screening procedure. The Pap smear was initially introduced in the context of cervical screening in the detection of pre-cancerous lesions of the cervix in 1940’s (Koss, 1989). Cervical screens are vital as research has shown 90% of women with invasive cervical carcinoma could be prevented by finding any lesions early (Grace. et al. (2001). Cervical screening in the UK presented with an annual reduction of 7% but the Pap smear also possesses many limitations such as high error rates (Graff. et al. 1987) Figure 1.
Yu, Winnie and Joel Hay. 1999. “Drug Patents and Prices: Can we Achieve Better Outcomes?” Measuring the Prices of Medical Treatments. Pages 27-28.
In the business of drug production over the years, there have been astronomical gains in the technology of pharmaceutical drugs. More and more drugs are being made for diseases and viruses each day, and there are many more drugs still undergoing research and testing. These "miracle" drugs are expensive, however, and many Americans cannot afford these prices.
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...
Janssen is a division of Johnson and Johnsons that primarily focus on diseases that can help develop new strategies in improving prevention as well as developing vaccines and its accessibility to the world. The pharmaceutical company of J&J invests large amounts of money in research and development of its products. The competitive environment of Johnson and Johnson is very high for pharmaceutical companies due to which that many companies are releasing drug products and other devices. However, this company does not face any potential competitors due to which that it is a large company that provides a wide range of opportunities such as finances, and experiences. This leads to advantages compared to other competitors due to whom the pharmaceutical companies creates a barrier because of the high cost in research and development in medicine. In addition, Johnson and Johnson have to make sure that it has many suppliers for different categories for their products especially in medicine if one supplier causes shortages. Although suppliers do not bargain for the price values of its products, it still influences the price in the market in different countries. In addition, finding
Over the past decade, scientists have made significant advancements in the treatment of certain diseases. Unfortunately, just like any new product, the cost of developing these new technologies and treatments is extremely high. Plus, unlike other technology, heath technolo...
For commodity generic drugs, Teva has an opportunity to expand its core business into emerging markets, but there it will have to face institutional voids because such markets are driven by physicians and both physician and other people are not aware about the effectiveness of generic drugs. To cope with the challenge of institutional voids Teva have to look for some competent small pharmaceutical firms for acquisition and some big firms for the joint venture. For changing the perceptions of people and physicians, Teva will require to run marketing campaigns and direct approaches to physicians to develop a market for their products.
Since its humble beginning as a small drugstore, Merck has placed a large amount of importance on improving the health and well-being of its customers. As drug patents expire and genetic forms of their top products become available, Merck’s strategy is to do the unexpected; instead of raising the price of their older products in favor of patent protected new drugs, Merck focuses on reducing their cost in order to better compete with their generic counterparts. Additionally, Merck’s plan for growth now encompasses a much more aggressive pursuit of new drugs in their pipeline through extensive research. Merck became the second largest health care company in the world after the merger with Schering-Plough in 2009 and has contributed great discoveries like the first cervical cancer vaccine and great resources like the Merck Manuals which are utilized as a source of information to doctors, scientists and consumers worldwide .
Paragon Biosciences has been at the forefront of aiding the creation of new innovative pharmaceutical companies since the first day it was founded. The highly successful business strategy that Paragon Biosciences duplicates
In recent years, the price of research and development has skyrocketed, making it very difficult and expensive to introduce new drugs into the market. Companies are spending more than ever from their profit of sales revenues into research and development. Now looking at it from this point of view, a newly merged company will have such high profit and revenue that they will have the opportunity to spend as much as they want on research and development, without money being an issue or a concern. Technology is improving by the day, and with the merging of companies-these companies will join technologies and join their research making their progress advance exponentially. Our company- Verduga Inc.-has wasted a lot of money recently on research and development. If we were to merge with Coronado-Salinas Inc., we would see a vast increase in the amount of capital available to us to use in research and development. The downside is that research and development sometimes turns out to be just research. Big companies can get overconfident and after getting a couple of results they might get too compulsive and overspend in research and development.
Qiu, L, Chen, Z-Y, Lu, D-Y, Hu, H & Wang, Y-T 2010, 'Public funding and private investment for R&D : a survey in China’s pharmaceutical industry ', Health Research Policy and Systems, vol. 12, no. 27, pp. 11