Case Study: Health Care Industry (Eli Lilly and Company)

1735 Words Sep 22nd, 2006 7 Pages
CASE STUDY: HEALTH CARE INDUSTRY (ELI LILLY AND COMPANY)

Introduction:
Following on his experience of medicines used in the Civil War, Colonel Eli Lilly, a Union Officer and a pharmacist, started a small pharmaceutical company in Indianapolis, Indiana, USA with the aim of producing high quality prescription drugs. After Colonel Lilly's death, his son Josiah K. Lilly Sr., and eventually his two grandsons, Eli Lilly and Josiah K. Lilly Jr., each served as president of the company. It was his grandson who led the company into the industrialized era by stressing upon the need of biomedical research and installing modern equipments to make the research successful. His interest in research paid off and since its inception the company has grown
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After an extensive investigation, the Federal Trade Commission (FTC) concluded that acquisition presented some competitive risk and issued a complaint against Eli Lilly; charging that the PCS acquisition would harm competition in the national full-service PBM market. The complaint alleged that the acquisition
• might foreclose non-Lilly products from the PCS formulary and that PCS would be eliminated as an independent negotiator of pharmaceutical prices.
• the acquisition could facilitate collusion through reciprocal dealing, coordinated interaction, and interdependent conduct among Lilly and other vertically integrated pharmaceutical companies.
• the acquisition could raise entry barriers by effectively requiring a competitor to enter at more than one level.
• would likely increase prices, diminish quality, and reduce the innovation incentives of other pharmaceutical manufacturers.
ELVIS, Clintrace and Clintrial:
In large global corporations, it can be challenging to share timely information across the enterprise. For a pharmaceutical firm like Eli Lilly & Company, the ability for all employees to easily access vital company information can provide a significant competitive advantage. With the advent of the World Wide Web, Lilly saw a powerful technology that might help alleviate some communications challenges. The company formed an Internet Services department to use the Web to create an internal

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