Glaxo Welco Case Study

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INTRODUCTION
Adopt the role of a marketing manager for multi-national pharmaceutical manufacturer Glaxo-Welcom. Your firm faces pressures to provide drugs for free. Assess the economic risks for the sales of your pharmaceutical goods in Colombia over the next five years and discuss how this pressure and these risks might affect the pricing of your products there.
Pharmaceutical companies spend vast amounts of dollars on research and development of new drugs for the public. Ultimately, specifically for U.S. drug manufacturers, the target market is the U.S. because of the possibility of high profit that is possible due to stringent U.S. patent requirements. In addition, there is no price regulation in the U.S. allowing for a premium sales market (Kanavos & Seeley, 2013). To profit from these benefits, companies must contend with Federal Drug Administration rules, requirements, and regulations, but if they pass them the market is open for virtually unlimited revenue if the drug does what it claims to.
Pharmaceutical companies are typically multinational operations located in specifically targeted countries around the world (Mahmud & Parkhurst, 2007). Many have grown to encompass the entire product life cycle to maximize profit in an efficient way. Ultimately, to ensure that transition to a successful product in the U.S. market, organizations have used the technique of giving the product away for a specific region and period of time in order to build brand recognition. In Mexico, Viagra was prescribed for virtually free for many years for this same reason, despite consumers paying top dollar for the drug in the U.S. The case of Glaxo-Welcom and their new drug in Columbia will be tested in the same manner. Additionally, givin...

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...as received so much attention that they have appeared on network television and ultimately pressured the company to offer them the drug. If this sort of case were to happen to Glaxo-Welcom in Columbia, and they didn’t go through with providing the drug for free, it could have some serious repercussions over the next five years for pricing, market entry and positive brand imaging.
CONCLUSION
Overall, Glaxo-Welcom should definitely provide the drug for free to Columbia. This will give them positive brand recognition for the region, and strengthen their name in the market over the long-term. Additionally, they will establish themselves with the drug when the inevitable move to stateside marketing occurs. Lastly, Glaxo-Welcom can set the drug’s price point to a higher index to recoup lost profits during the time the drug was offered for free to the emerging nation.

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