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.
Johnson & Johnson, a healthcare company that has dominated its industry for several decades, is currently undergoing managerial upheaval in light of recent blunders amongst its top-tier managers. It has spent years priding itself on appeasing stakeholders and being a safe provider of various pharmaceuticals, but product recalls and subsequent revenue drops have plagued the company as of late. Alex Gorsky spearheads Johnson & Johnson’s revival after previous CEO William Weldon resigned due to missteps. The cause of which stems from misinterpretation of common business ethics through poor leadership and social responsibility that damage the stakeholders.
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.
...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).
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 and the efficient usage of media outlets.
Lehman, Bruce. 2003. “The Pharmaceutical Industry and the Patent System”. International Intellectual Property Institute. Pages 1-14.
Main Issue In 2000, Rich Kender, Vice President of Financial Evaluation and Analysis at Merck & Company was discussing the opportunity of investing in licensing, manufacturing and marketing of Davanrik, a drug originally developed to treat depression by LAB Pharmaceuticals. LAB proposed to sell the rights of all the future profits made from the successful launch of Davanrik at the cost of an initial fee, royalty payments and additional payments as the drug completed each stage of the approval process. Merck & Company's organizational goal is to constantly refresh its drug development portfolio and reach as many customers as possible during the patented period. So there was not only the potential of financial gain or quantitative aspect of the offer, but also the qualitative value which will be added by getting better positioning in the risky pharmaceutical industry.
Cropper, Carol Marie. “A Cloud Over Antidepressants” Businessweek 3880 (2004): 112-113 Business Source Premeir. Web. 28 Jan. 2014
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,
Human Pharmaceuticals, according to the financial statements, in the United States, Eli Lilly promotes to health care professionals by utilizing both an employee based sales force and contracted sales force to call upon physicians and other medical professionals with advertisements being placed in “medical journals, distribute literature and samples of certain products to physicians and exhibit at medical meetings. On the consumer side, websites contain information as well as certain products marketed directly to consumers. Additionally, “special business groups” are used to service wholesalers, pharmacy benefit managers,
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?
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.
pharmaceutical companies that profit from the high costs of drugs. It is evident that there is a