Cheap Pharma Case Summary

As the brand manager for Allround cold medicine, there were many decisions regarding product formulation, strategy, line extensions and product launches over the company’s last 10 periods. The brand was focused on remaining a profitable, mature product family within the cold medicine category, but also maintaining a premium brand image.

In our experience with Pharmasim we learned that Marketing decision making must be very sensitive and responsive to everything going on in the industry which is very complex. Consumer responses to marketing tactics can be volatile and unpredictable and no idea is guaranteed to work well. Marketing is a matter of meticulous research, assumptions, planning, and volatility at times. Overall we took away two major points: 1) that it is important to consider the product lifecycle in evaluating how to promote businesses and, 2) that the “Sweet Spot” as a competitive advantage should be the greatest point of consideration when evaluating how to best gain leverage to beat the competition in the minds of

Issue: Have the directors of the company breached their duties mainly related to the company’s insolvent trading.

There are a number of people that are critical to the corporate process. These include the directors of corporations, officers, and shareholders. The primary role of the directors is that of oversight (Loewenstein, 1998). The directors are hired by the shareholders, and their duty is to oversee the actions of the corporate executive. The directors hire the CEO and set his/her salary and benefits. The directors also play a role in oversight of the strategy and operations - this tells them about the merits of the executive that they have hired. Since Sarbanes-Oxley (SOX) was enacted, directors have seen their oversight role expanded (Skinner, 2006). There must be within the director group some financial experience to provide explicit financial oversight of the firm. The law prescribes certain committees as well, including audit and compensation committees, and SOX has also increased the liability that director's face, while expanding the role that directors play in the firm.

Common stockholders are the basic owners of a corporation, but few stockholders of large corporations take an active role in management. Instead, they elect the corporation’s board of directors to represent their interests. Board members seldom get involved in the day-to-day management of the company. They establish the basic mission and goals of the corporation and appoint

The second rests in Pfizer’s expiring patents on several popular drugs that invite their competitors to enter the market with similarly performing pharmaceuticals. Once these patents expire, Pfizer will either have to extend the patent through reformulating the performance of the drug for another purpose called “ever greening”, or abandon the line in the pursuit of another, more profitable product. Regardless of what they do in terms of their own product offerings, generic imitations of their products will enter the market, diluting the profitability of the drug and forcing reliance on the sales of other existing products to make up the loss.

Tulsa – 12/15/2011 – Pharma Co., a leading pharmaceutical developer, today announced its plan to terminate the lease on its Plant A facility located in Bellvue, Oklahoma, as part of its management restructuring and cost-cutting measures. Earlier today, Pharma Co. entered into an

In large corporations the success or failure of the company is the responsibility of the board of directors. According to Richard DeGeorge, “The members of the board are responsible to the shareholders for the selection of honest, effective managers, and especially for the selection for the CEO and of the president of the corporation.” (p. 202). The board members have a moral responsibility to ensure the corporation is run honestly, in respect to its major policies, and to ensure the interests of the shareholders are satisfied. The next responsibility within a corporation is the responsibility management has to its board of directors. DeGeorge writes, “It must inform the board of its actions, the decisions it makes or the decisions to be made, the financial condition of the firm, its successes and failures, and the like.” (p. 202). The management of the corporation is morally obligated to

The company believes that the executives and directors should own the stocks. In order to be a stockholder,

The Pharmaceutical industry has been in the spotlight for decades due to the fact that they have a reputation for being unethical in its marketing strategies. In The Washington Post Shannon Brownlee (2008) states, “We try never to forget that medicine is for the people. It is not for the profits. The profits follow.” This honorable statement is completely lost in today’s world of pharmaceutical marketing tactics. These tactics are often deceptive and biased. Big Pharma consistently forgets their moral purpose and focuses primarily on the almighty dollar. Big Pharma is working on restoring their reputation by reforming their ethical code of conduct.

It is the board's responsibility to consider and authorize a suitable remuneration package for the company's chief executive officer (CEO), make recommendations with respect to the attractiveness of dividends and dividends pay out, approve stock splits, form the audit committees, approve the company's financial statements, oversee management’s involvement in the shareholders and other stakeholders long-term interests and recommend or discourage major decisions such as acquisitions and mergers.

Also, the drug distribution division has been forced to lower its prices by health care providers, patients, insurance companies and HMOs. Moreover, related costs are increasing, reducing profit margins of the company. This division is not as profitable as other three divisions, generating less than 50% of the company’s total profits,

Pharmed First Inc. is a widely successful chain pharmaceutical company with 85 drugstores located in Canada’s Atlantic provinces. George Brenner is one of the 6 regional managers and Angela MacFee is a store manager in a mall located in Dartmouth. One of MacFee’s loyal customers have purchased 9 packages of Diet Magic on September 2011 however wanted to return them on May 2012. Subsequently, MacFee reacted hastily and defensively, arguing with Johnston in spite of Pharmed First Inc. return policy (Figure 1). As a result, Johnston wrote a letter to Frank Chen, the president of Pharmed First Inc. and told Brenner to deal with it. He proposed that the company gives Johnston a $500 voucher and that MacFee apologizes. However, MacFee remained inflexible as she also challenged Brenner’s authority.

In 2000, Merck began to cooperate with Schering-Plough on several research products and in 2009 acquired their longtime partner in an effort to diversify its products and reach a broader consumer base. With challenges that include rising prices of research and prescription drugs, Merck has managed to forge forward and overcome obstacles. Merck’s survival has been a subject of speculation many times throughout the years; from the 2004 recall of their top selling drug (Vioxx) due to undesirable side effects to the recently curtailed trials of their very promising new anti-clotting drug (Vorapaxar) due to negative trial results. Kenneth Frazier, Merck’ CEO, has also come under heavy criticism due to his unconventional decision not to cut research budgets in order to increase profits. This strategy differs greatly from the usual path and it has cost Merck investor confidence which resulted in lowered stock prices . Although Merck has been subjected to challenges throughout their history they have always managed to stay afloat and maintain their reputation as a leader in healthcare.

GSK is the 2nd largest pharmaceutical firm in the world, and the largest in the UK by sales and profits, it is responsible for 7% of the worlds pharmaceutical market, and has its stocks listed both in UK and US (O 'Rourke, 2002). The origin of the so called blockbuster model, is partly linked with Glaxo (as it was previously known). In the early 80’s, then Glaxo brought to light their first blockbuster drug, Zantac, which was an anti-ulcer drug, which was very similar to the a pre existing drug Tagamet (first ever blockbuster) sold by Smith Kline & French, their completion at the time (MONTALBAN and SAKINÇ, 2011). The introduction of this drug, brought about an increasing sales force in the US, the company soon became dependent on the drug, because it represented a large part of their profit. In 2002, 8 blockbusters of GSK contributed to $14.240 million sales revenue, taking up 53% of its total ethical sales (Froud et al 2006). However, due to the nature of the pharmaceutical industry, the patent began to expire, in other to avoid the patent cliff, Glaxo merged with Wellcome in 1995, which ensured a growing number of sales force, and with Beecham in 2000 (Froud et al., 2006) this merger, boosted the confidence of investors, by growing the business inorganically. For Big Pharma, this block buster model is very profitable, because with the high cost of R&D, the drugs are able to generate ample profit, to cover the sunk costs