#1. In 2009, BioPharma Inc. experienced a significant decline in profits with high costs of production around the world. Due to a stable demand with little room for increased profitability, cutting costs was a top priority for the coming year. Changing and adapting BioPharma’s global production network was thus a priority in order to be successful and eliminate wasteful surplus. BioPharma should have used their production network differently in 2009 in order to be as efficient as possible. Presented first will be how the structure of the current distribution network leads to room for improvement, followed by how exactly BioPharma should go about structuring their distribution network in order to maximize economic surplus. …show more content…
Figure 1-3 Limiting German Plant Current CostsProposed CostsFixed Costs$72$58Variable Costs $185.3$185.3Transportation Costs$3.8$3.8 Cost Savings for BioPharma: $14 million The import duties of this new proposal must also be considered now with more goods being imported into Japan. With the 2 million kg being imported from Japan, the import duties to Japan are now as follows: $135.25 x .06 = $8.115 This brings us to the final cost of the proposed distribution network Total Cost of Proposal $1252.65+ $16.869 (import tariffs) = $1269.519 million #2. Phil Landgraf, the company’s president for worldwide operations, should structure BioPharma’s distribution network to eliminate inefficiencies at all levels, yet still be flexible to face uncontrollable factors such as fluctuating exchange rates. As shown earlier in the report, certain actions like shutting down the Japanese plant and limiting the German plant to only one chemical are neccessary in order to cut costs. Those two actions alone will save the company millions annually. Also, adjusting the production levels of certain plants in order to most efficiently meet the demand around the world is needed, such as the German plant producing an additional 2 million kg of HighCal to help meet the Japanese demand because it is the only plant with excess capacity and the
Economic: Globalization of the pharmaceutical industry is an exciting opportunity to have research and development done at cheaper prices in other countries. However, this could be a double edged sword for companies because it is easy for other countries, such as India, to produce generic versions of the drug in bulk.
Cynthia Robbins-Roth is a strategic planner and business consultant to the biotechnology industry, named one of the Top 25 Biotech All-Stars by popular business magazine Forbes. Her book, published in year 2000, provides a broad overview of many biotech topics and draws upon her experience and skill as a keen businesswoman. The engaging and informative work initially details the establishment and growth of the biotechnology industry, as well as its historical origins and information on key players in its founding. Throughout her account of this “dynamic” industry’s early struggles, great successes, and current difficulties, Robbins-Roth presents her opinion of the industry’s current viability and hopes of the future product pipeline. Robbins-Roth predicts a revolutionary change in health management and treatment, which combined with the growing aged population, will produce sufficient demand to propel the biotechnology industry past the well-established small molecule pharmaceutical companies. She asserts that the biotechnology companies will emerge as the leaders in the world’s medical research and development. Robbins-Roth further explains the intricacies of financing a biotechnology venture, the necessity of efficient risk management, and the difficulty of selling an idea to non-scientist investors.
Nucleon is faced with a decision that has a long-term implication for its future in a highly competitive drug industry. With its first product, CRP-1 ready for human clinical trials, Nucleon must decide on its manufacturing strategy. For Phases I & II, Nucleon has three options available including building a new pilot plant in-house, contracting an outside manufacturing firm or licensing the product to another company. For Phase III, Nucleon could either license out manufacturing and marketing rights or vertically integrate into commercial manufacturing. Accordingly, Nucleon has 5 options under consideration: 1) Option 1: build a new pilot plant for Phases I & II and build a manufacturing plant for Phase III; ii) Option 2: build a new pilot
There are several rewards to consider with expansion of Biocon. Currently in India, there is a growing market for contract research organization and the growth of Biocon falls right within this opportunity. The growth is expected to last for more than few years with a rate that looks promising. Clinigene is expected to reap revenues much higher than the current Biocon and Syngene combined (Kalegaonkar A., Nov 4, 2008). It will take clinical studies to a higher level with better options in terms of drug manufacturing. With other countries ready to outsource the service of clinical studies, Clinigene’s future looks bright.
The threat of Amazon giant entering the pharmaceutical distribution business can be perceived as an opportunity to dethrone McKesson as the leader in this industry. However, the evidence presented in this proposal will show that McKesson can through an effective business plan and advanced technology, launch ground breaking software that will enhance the processes currently being used.
Amgen Inc. is a biotech company. The responsibilities of the Product Development Teams (PDT’s) can be described as “discretionary cost centres”. The output of a PDT is therefore difficult to relate to its
Cooperate with wholesalers in order to make the specified products available on the local pharmaceutical market.
Problems faced in financial performance of biopharma Inc. Steep decline in profits. Very high costs at Germany and Japan plants. Stable demand across the globe. Company could no longer afford to have surplus capacity. Aims at having an efficient network. Cutting the costs is the top priority.
Our client is OldPharma, a major pharmaceutical company (pharmaco) with USD 10 billion a year in revenues. Its corporate headquarters and primary research and development (R&D) centers are in Germany, with regional sales offices worldwide.
The research and development of the pharmaceutical industry is very important as the industry relies on it to develop new products to maintain and sustain the growth of the industry (ALRC 2014). According to the Australian Government Law Reform Commission, every year, the total spending in research and development in pharmaceutical industry, which includes drug discovery, pre-clinical testing and clinical trials on drugs is around $300 million (ALRC 2014). Mergers and acquisitions are intensifying in the global pharmaceutical industry, especially over the last 10 years. With factors like exorbitant research and development costs, the relatively shorter product life cycles, and the rarity of discovering a new life-changing drug acting as catalysts, leading pharmaceutical companies now have more cause to step out and look for external collaboration. This results in an increasing number of smaller biotechnology companies merging with bigger pharmaceutical companies (The
One would wonder about the validity of the interconnectedness within the value chain; in Belgium however, each aspect of this chain is divided into sub activities. The research and development phase consists of drug screening, pre-clinical trials, clinical trials and the new drug approval whereas the supply chain phase deals with the manufacturing process, marketing, distribution and actual sales. Now over the last 30 years, Belgium has experienced at least 10% in annual sales growth maintaining a progressive strength. However, Canada and Europe constitute about 70% of the global sales this is not inclusive of other customers such as Asia, Africa and Latin America.
In 2005, Phillip (Phil) Landgraf faced several glaring problems in the financial performance of his company, BioPharma, Inc. The firm had experienced a steep decline in profits and very high costs at its plants in Germany and Japan. Landgraf, the company 's president for worldwide operations, knew that demand for the company 's products was stable across the globe. As a result, the surplus capacity in his global production network looked like a luxury he could no longer afford.
This report provides an analytical strategic review of the global pharmaceutical industry; its origin, evolution,
Overall, it seems, the diversification strategy is a viable alternative for big pharmaceutical incumbents. However, it carries with it the inherent risks of dilution of funds and a misalignment of efforts. If diversification is to be successful, a balance needs to be struck between retaining core strengths, identifying
Clinical supply managers have increased logistical challenges represented by the complexities in producing and distributing supplies globally, meeting the regulations and time-constraints, and tighter budgets in drug development. Therefore, new sourcing strategies for companies and implementation of new forecasting tools are vital to clinical supply chain management. This paper reviews a study performed by the Tufts Center for the Study of Drug Development to assess the role of clinical supply chain managers in the global marketplace. Surveys and roundtable discussion, with topics including primary responsibilities, technology usage, outsourcing, and challenges were used to analyze the global clinical supply market. As companies will continue to seek to maximize efficiency and minimize spending within their organization, the paper