...Eli Lilly is a leading pharmaceutical company located in Indianapolis, Indiana, which specializes in treatment of several high profile diseases. Evista, a newly developed drug by Eli Lilly, is an estrogen replacement therapy medicine for prevention of osteoporosis which through testing has seemed to lower the incidence of breast cancer in women. This FDA approved drug is expected to be a potential blockbuster and generate revenue of 1 billion US dollars per year for the company. Pharmaceuticals is a highly competitive market and it is imperative for the leading companies to recuperate their development costs and generate returns for stockholders as well as fund research and development for potential new drugs at almost a constant rate. With the profitable lifetime for drugs, in United States, being significantly shortened since the 1980’s, Lilly Research Laboratories was able to develop Evista in a much shorter time period by adopting a Matrix-Based development approach and utilizing heavyweight teams. This strayed from their usual path of function-based product development strategy. With the possibility of profound profits from the commercialization of Evista, Dr. Gus Watanabe has to weigh whether the increasing internal resistance to heavyweight teams and shortage of resources is worth it. Watanabe needs to make a decision about adopting this new successful heavyweight team approach for commercialization of Evista as well as product development. Changes in the past few years...
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...Running head: ELI LILLY – DEVELOPING CYMBALTA CASE ANALYSIS 1 Week 4: Eli Libby – Developing Cymbalta Case Analysis Mary Juanita Hawkins University of Maryland University College Author Note This individual assignment was prepared for AMBA650, Section 9245, taught by Professor Philemon O. Oyewole. Introduction Eli Lilly and Company was established on May 10, 1876 in Indianapolis, IN and has been in business more than 132 years. The founder of this pharmaceutical company was Colonel Eli Lilly who was a union army member during the Civil War. This company deals with the development, discovery, sell, and manufacturer of drugs, such as Prozac and integrates supply-chain management within its departments. The first success that the company achieved was the coating of pills using gelatin. In 1923, the company marked another success by introducing Iletin that was used in improving diabetes. This project was the first largest insulin production that the company together with the University of Toronto invented. All through the 1950’s, various advancements were introduced such as the invention of the oral penicillin and the antibiotic known as Erythromycin. Prozac was produced in 1988 and latter succeeded in 1990. In 2000, the drug Zyprexa was utilized in the treatment of schizophrenia and later, the drug Gemzer was introduced for chemotherapy. Before Prozac the treatment available was Tofranil also known...
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...of the Pharmaceutical industry in the US and the current decline of the blockbuster products of Eli Lilly which were coming to an end of their life cycle, the company is in the process of developing three new products that plan to launch in 1996. A great number of factors such as decrease of the industry growth rate, steady decline of innovation, increasing competition from competitors, generic drug substitutes, government regulations and an ever increasing cost in manufacturing, R&D and quality protocols and processes have made the decision to launch new products into the market place a necessity and created a topic of debate within the management and leadership of the company. In response to these conditions, the management has established a company-wide initiative and goals to accomplish in the launching of their three new upcoming products. These goals were set up keeping in mind that the company wanted to bring new innovative products to their customers faster, cheaper and serving the needs of their customers. 1. Reduce manufacturing costs by 25%. 2. Reduce product development lead time by 50% as compared to the current lead time of 8 to 12 years. 3. Never Stock out – meet projected manufacturing demands. The dilemma facing this company and the upcoming challenge has given rise to a difficult decision by Steve Muller, Manager of Strategic Facilities and Planning at Eli Lily and Company. The decision was to decide on the type of manufacturing facility that will be...
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...CASE 6-3 “Eli Lilly in India: Rethinking the Joint Venture Strategy” 1. I think Eli Lilly pursued the right strategy joining Ranbaxy Laboratories to enter the Indian market. While companies were using the global market to amortize the huge investments required to produce a new drug, they were hesitant to invest in countries where the intellectual property regime was weak. During the 1990s both companies had a strong reason for the joint venture. Ranbaxy wanted to make its presence globally and Lilly wanted to get their feet on Indian grounds. In 1992, Ranbaxy approached Lilly to investigate the possibility of supplying certain active ingredients or sourcing of intermediate products to Lilly in order to provide low cost sources of intermediate pharmaceutical ingredients. Based on the strategic alliance, Ranbaxy would supply certain products to the joint venture from its own portfolio that were currently being manufactured in India and then formulate and finish some of Lily’s products locally. From the beginning, both companies had a lot in common, they both believed in high ethical standards, technology and innovation, and future of patented products. They created the joint venture with $7.1 million capital and an initial subscribed equity capital of $3 million, with equal contribution from Lilly and Ranbaxy, leading to an equity ownership of 50 percent each. India, with an 800 million population had about 300 million of people that were considered to...
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...1. Did Eli Lilly pursue the right strategy (i.e., should it have used a joint venture) to enter the Indian market? Why or why not? You should refer to Chapter 6 of the notes for guidance. With the upward trend of globalization, cross-border commercialization has become inherent in business strategies pursuing not only improved competitiveness but to avoid market share erosion. Expanding to new markets, reducing friction with socio-cultural and legal barriers, reduce capital costs, securing raw materials and implementing economies of scale are just a few motivations which to look abroad for and consider the intricacies of operating in another country. Changes in India’s economic policies from an import substitution to an export-driven one, was the legal foundation that allowed Eli Lilly to pursue its interest to market its drugs in India, where it already had relationships with local manufacturers to produce human or animal insulin for the Soviet Union market, but did not for the Indian market (Bartlett & Beamish, 2014, p. 524) The opportunity presented by Ranbaxy, the second largest pharmaceutical company in India, to supply certain active ingredients or intermediate products to formulate and complete Lilly’s, and for the Joint Venture (JV) to sell and distribute those products, was the perfect opportunity to enter a “new” market while sharing the costs and risks with a well-known and respected partner. With the then existing market conditions (Sales turnover caps, mandatory...
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...University of Maryland Case Study Analysis Eli Lilly: Developing Cymbalta Case Study AMBA 650 Section 1131 Kelvin Harris January 24, 2012 Executive Summary Eli Lilly and Company resounding success was the arrival of Prozac in 1988. By mid-1988, a new anti-depressant team was formed to find and develop a drug that would be the successor to Prozac. The strategic issues and problems they faced were developing a new drug to replace Prozac, meeting the company budget constraints to perform clinical trials, and finally launch the new drug by mid-2001. The analysis and evaluation revealed that the pharmaceutical industry is changing fast and it usually takes a long time and millions of dollars to develop a new drug. The recommendation for Eli Lilly is to take the lead in developing the new drug Cymbalta, invest a stable share of the company revenue, seek the FDA approval for the development of Cymbalta before going to market, and not change their market plan from the FDA approved Cymbalta dosage of 20 mg twice daily. Introduction Eli Lilly and Company was founded by Colonel Eli Lilly, Lilly’s namesake, in 1876 when he purchased a laboratory on Pearl Street in Indianapolis, Indiana. Eli Lilly was a pharmacist who had served in the Union Army during the Civil War. The company success included creating the process for applying gelatin-coating to pills for easier swallowing and the introduction of Iletin which was the first mass-produced insulin. Iletin...
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...The Problem Joint Ventures do not always work and when they do they don’t work indefinitely. What Eli Lilly and Ranbaxy are facing now is the dilemma of rather to continue with their JV, Eli Lilly Ranbaxy, or should they separate and continue each one by its own means. The situation represents both a problem and an opportunity to both companies, as there are important trade-offs to be considered before any decision is taken. The Environment In the last decade the environment for the pharmaceutical industry changed radically in India. Before the 1990’s there were no regulations for patent recognition and the government had an active role in establishing drug prices through the DPCO, which were situated amongst the lowest in the world. Profit margins were also regulated at around 6% of sales. As a result many of the multinationals started exiting the Indian market. As India enter the GATT and the WTO in 1994 patent protection would become active in India from 2004-2005. In the international arena, patent regulation was also little by little becoming stronger and many of the big players were going through M&A processes that further increased the sales concentration in few companies. These companies had a hard time competing with local laboratories that produced generic drugs with no R&D expenses and at a fraction of the price. Eli Lilly Ranbaxy portraits the example of the traditional JV in which Ranbaxy, a company from less-industrialized country, offered the knowledge and...
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...ASSIGNMENT MARKETING MANAGEMENT |CASE |INDIVIDUAL ASSIGNMENT |GROUP ASSIGNMENT | | |(Please select 1 question for your individual |(Please select 2 questions for your group assignment | | |assignment regardless how many questions are given in |regardless how many questions are given in each case) | | |each case) | | | |Submission deadline: JANUARY 4TH, 2014 | | |Submission to: ANHDANGLUCKY@GMAIL.COM | |ZENITH |What would you do to improve the reliability of the |What managerial and research problems that face Zenith?| | |market research, if you were the top management of the | | | |company? |Where could Zenith get the relevant information? | | |What would the best way be to discover the market |What would you do if you were Pearlman? | | |demand of the new product of Zenith? | ...
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...Parinaz Kokabi OP 300 “Elli Lilly and the Company: The Flexible Facility Decision” case analysis Due to the fierce competition in pharmaceutical industry, Elli Lily has to change its product development process to retain its situation in the market. Steve Mueller, manager of strategic facilities planning, must suggest the company what type of manufacturing facilities to construct. These new facilities were needed for three new products (Alfatine, Betazin, and Clorazin), which the company expected to launch in 1996. His decision will be based on decreasing the lead-time by 50% and reducing the costs by 25%. According to the case, Mueller suggest three options: one option is to build one specialized facility; the second option is to build one flexible facility, and the third options which is stated under the second option is a combination of specialized and flexible facility. The first choice, building a specialized facility, will not reduce the production lead-time. In addition, since the facility is built only for one type of product, if that product cannot be launched to the market the part of the facility might have to be retrofitted to produce another product. Further, it can cause delays in production, which can cost the company millions of dollars in loss. However, this option is very productive (almost 16,000 kilograms of output per rig at 80% of utilization) because the plant is dedicated to a set of special products and there is no changeover. Moreover...
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...Eli Lilly case questions 1) Did Eli Lilly pursue the right strategy to enter the Indian market? It was a right strategy for Eli Lilly that started a joint venture with Ranbaxy to enter the Indian market. First of all, Ranbaxy was the second largest pharmaceutical company that manufactures bulk drugs and generic drugs in India, with a domestic market share of 15 per cent. It had established broad distribution network, and it was the second largest exporter of all products in India. Ranbaxy’s capital costs were 50 per cent to 75 per cent lower than those of comparable U.S. plants. Second, the timing was perfect for Eli Lilly to enter the Indian market. During 1970s, the Patents Act 1970 and the Drug Price Control Order (DPCO) was issued. And India was opening its drug market. Third, there was possibility to conduct cheap clinical trials in India. 2) Considering the evolution of the JV, evaluate the challenges that JV leaders faced in each phase. Andrew Mascarenhas was the first managing director of the joint venture. He created the JV’s team, positioned the JV in the market, set its operations developing the marketing strategy. Challenges he faced were hiring sales force and recruiting doctors and financial staff. He trained them on the company's value, philosophy and code ethical conduct. The JV reached break-even and was becoming profitable at the end of his managing time. Chris Shaw built systems and processes to bring stability to the fast growing organization...
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...Cymbalta Case Study Analysis Executive Summary Introduction: The Problem It’s April 2000 at Eli Lilly and Company where their flagship product Prozac is the leading brand of anti-depression medication and is set to expire in December 2003. Even though that is the official patent expiration date, no one within the company could be sure exactly how much time Prozac had left (Okef & Laufner, p.1). Patent expiration would mean that generic versions of the drug would flood the market and Prozac’s current $2 billion in annual sales would create a huge revenue gap (Okef & Laufner, p.1). John Kaiser, Marketing Director at Lilly is asked to give a presentation on a topic developing a successor to the now legendary anti depressant Prozac, which later on Kaiser titled “No Pain, No Gain.” He presented an overview of what depression is exactly and analyzed the effectiveness of Cymbalta comparing it to Prozac. After a four-and-a-half long marathon, some challenges and concerns were raised by some of the senior leaders of Lilly about their doubts that Cymbalta could in fact replace the leading brand. Strategic Planning In 1998, the New Antidepressant Team (NAT) was formed by two colleagues at Lilly: Mark Demitrack and Brett Schmidli, and later asked two other members Jim Lancaster and John Kaiser to join them based on their professional experience. The mission of the team was to find and develop a drug that would later replace Prozac. They quickly and efficiently narrowed...
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...Executive summary: With the fast approaching expiration of its Prozac patent, Eli Lilly has to decide regarding the future course of action of its next generation anti-depressant drug. In this case analysis, the company faces three critical decisions before NDA submission: 1) establish Cymbalta as efficacious for treating major depressive disorders (MDD) using once-a-day (QD) dosing, 2) pursue a separate pain indication in addition to submitting for an MDD using twice-daily (BID) dosing, and 3) delay submission until both issues were established. All of these options are complex and not without difficult trade-offs but based on market research of its customer segments and market potential, the best strategic option is to prove efficacy for treating MDD using QD and only after launch get FDA approval for treating pain. 1. FDA approval for once-a-day dosing for Cymbalta is more important to have at launch. First, Cymbalta is the successor to Prozac and with it carries the brand that creates this resonance in the mind of consumers (patients/physicians). This is a successful brand that patients trust, value and can identify with. With this brand, Lilly has established a perceptual positioning and differentiation from its competitors, and so as to introduce this next generation product for the first time for a different indication, Lilly could run the risk of losing their large customer base. Second, establishing efficacy for treating MDD using QD dosing is more promising than pursuing...
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...Introduction In 2002, product leaders from the Biotech start-up ICOS, and Eli Lilly prepared to take a new erectile dysfunction medication to the market. Cialis would be positioned in a market which was currently dominated by Viagra, an erectile dysfunction medication that had been introduced by Pfizer in 1998. In the following case analysis, I will examine the process used by Lilly ICOS, LLC to bring Cialis to market. Utilizing the Harvard Business School Case “Product Team Cialis: Getting Ready to Market” I will point out certain facts surrounding the case, and highlight key issues. Alternative courses of action around bringing the product to market will be identified and evaluated. Finally, a recommended course of action for the company will be discussed. Facts Surrounding the Case At the time that Cialis was developed as an erectile dysfunction (ED) treatment, that landscape was being dominated by a single player. Viagra, developed by Pfizer, was released four years prior and enjoyed great success over the previous three years. Viagra, whose main ingredient is Sildenafil, was generating over $1 billion in sales for Pfizer year over year for the previous three years (Ofek, 2010). While Viagra was successful in its initial years in the initial market, it was not without its problems. Patient satisfaction with Viagra was below 50% in all markets with the exception of Germany and Italy. Viagra was only effective for hours post dosage, and was affected by the consumption...
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...MANAGEMENT OF TECHNOLOGY Case Brief on Eli Lilly: The Evista Project TIMELINE 4000-2000 BC – Ancient Egyptians developed compresses around Skull to stop migraines. 1876 – Eli Lilly founded in Indianapolis, Indiana by Colonel Eli Lilly. 1970s – Early research in Lilly on Serotonin. 1988 – Prozac launched to market 1991 – Serotonin “1f” receptor cloned by Lilly’s collaborator, Synaptic Pharmaceutical Corporation. CNS group starts screening serotonin like compounds from Lilly’s historical library 1992 – Glaxo launched sumatriptin (Imitrex) 1994 March/April “Hot” lead compound found from the screen with good fit at the serotonin 1f receptor Kaldor gives combinatorial chemistry seminar to an in-house audience at Lilly March/June Improvement upon this lead made using traditional chemistry September Sphinx acquired December Schaus presents seminar on his research to other CNS research group leaders 1995 – PTAC(Project Approval Committee) meets to discuss strategic choices in migraine project 2001 – Projected launch, if approved, of Lilly’s migraine product 2003 - Patent protection of Prozac ends What is a heavyweight project team and how does it differ from a traditional approach used for organizing development projects at Eli Lilly? A functional structure is a traditional approach found in most mature and larger companies where people are grouped in disciplines that work under a sub-function manager. The different subfunctions coordinate ideas through detailed specifications...
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...Abstract This report analyzes why Eli Lilly and Pfizer, both well-established companies, were unsuccessful in the introduction of innovative products, the 100 percent insulin “Humulin” and the first inhaled insulin “Exubera” and why “thinking big but acting small” is significant in the need to innovate and in knowing and keeping the customer. Big companies must think outside the box by solving their customer problems, making better products and creating value. Keywords: insulin, inhaler, customer Thinking Big and Staying Small Both Eli Lilly and Pfizer realized unforeseen decrease in market shares in their efforts to “enhance their technology trajectory” (Christensen, 1999) by introducing groundbreaking products in the market. For any market opportunity, validating the market appropriately and defining the products in terms of customer needs are crucial. Undoubtedly, poor planning and short-term investment horizons may have played roles in creating troubles for both companies. To explain why these companies failed, I will explore their mistakes hopefully establishing clear grounds for conclusions and strategic business recommendations. Mistakes Were Made Developing Products with No Market The Humulin-brand was technically successful. However, because of its premium price, the product had no takers. Its price was 25 percent higher compared to the animal-extracted insulin. Retailers were reluctant to add it to their crowded refrigerators of insulin products because “the...
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