Eli Lilly Ranbaxy joint venture Essay

The case consists of two major pharmaceutical companies that joint to collaborate their research and pharmaceutical technologies to start a joint venture in India. Both have valuable resources that have benefited both companies during the joint venture. Now both are questioning if there is still any value in maintaining the joint venture in India and will be deciding what will be the best route to take. Ranbaxy Laboratories wants to be bought out, but Eli Lilly is worried of the financial implications of such move.

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.

This section we are analyzing the Indian Pharmacy at which the Ajanta Pharma belongs and the overall external environment in which the company is operating.

Those target markets who rely on Johnson & Johnson health and medical needs are mostly patients, doctors, nurses and civilians. Therefore, the company need to sustain their products and services over all these years to ensure that lower income people and underprivileged patients are able to access on their medicines. This however requires the company to balance patient’s access and competitive dynamics in line with their need as the company need to have enough resources to keep on being innovating, creating new and better medicines and at the same time making sure there will be a fair return to the shareholder as well. Johnson & Johnson also work closely with the governments, physicians, non-government organizations and the international donors all around the world to provide its products within an affordable prices to its

Eli Lilly entered into a joint venture with Ranbaxy in India in 1992. A decade later both must decide whether this relationship remains mutual beneficial. Both companies have enjoyed a strong working relationship with identical value system as well as strong growth.

Pfizer is the largest American pharmaceutical company and one of the largest pharmaceutical companies in the world. It competes with Merck and Glaxo, and markets such well-known medications as Celebrex and Viagra. However, the pharmaceutical industry as a whole has undergone changes in recent years with significant consolidation taking place and with increased scrutiny regarding the ways in which drugs are developed, tested and marketed. In addition, recent controversies have erupted regarding Merck's drug Vioxx, and Pfizer has been the target of unwanted publicity regarding its painkiller Celebrex. This research considers the strategic position of Pfizer, including its strengths and weaknesses as well

There are advantages of starting a pharmaceutical firm in India. It has emerged from being an enzyme-producing firm to a biotech powerhouse under the guidance of Ms Kiran M. Shaw. They have a well-established pharmaceutical industry that has been growing since 1947. After the purchase of Hindustan Antibiotics Ltd. and India Drug and Pharmaceuticals Ltd. they were able to compete with the MNC’s (Multi National Corporaton) from overseas (Kalegaonkar, Locke, Lehrich, 2008, p. 2). In the beginning the pharmaceutical industry saw substantial growth. “By the beginning of the 21st century, over 20,000 pharmaceutical companies were operating in India” (Kalegaonkar, Locke, Lehrich, 2008, p. 2). “The pharmaceutical industry in India is ranked third

A company like Teva Pharmaceuticals is subject to all of the factors of the external environment given the nature of its business and global expansion. Pharmaceuticals is an industry where high profits can be achieved, but it is also an extremely challenging business when one considers all of the political/legal aspects involving government regulation and patents. Every country has strict regulation and testing requirements for drugs that affect companies differently depending on their position in the market. Originally, innovative pharmaceutical companies had to obtain patent protection and FDA approval but this would translate to years of protection from the generic competition. Once the

Vital Pharmaceuticals Inc. (VPX) is a supplement company whose mission is: “To produce the highest-grade, university proven sports nutrition supplements and performance beverages in the world” 1. While there have been several clinical studies on VPX products as a whole, which have helped back their product claims, the company have not tested all 39 products they manufacture. However there is enough base level research on individual ingredients found in the products that can help prove the legitimacy of product claims. This gives the impression of reputability to VPX; however, caution should still be used in carrying all of VPX products. Many of the products have proprietary blends which may hide the actual amount of active ingredients 2.

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

Ratios aside, the patent of its older product (mainly Zyprexa) will expire in 2011. However, the increased in the newer products that accounts for total sales has increased to 24% from 18% in

The Japanese Pharma giant Daiichi Sankyo was struggling with the acquired 63.5% stake in Indian drug company Ranbaxy ever since the deal was made in 2008. Daiichi was to improve the manufacturing process of Ranbaxy , having a history of disputes with US regulators since 2002. However after the deal, a ban by the US food and drug Administration on Ranbaxy made drugs from the Indian manufacturing plants. Ranbaxy was accused of wrong data and manufacturing shortcomings. There was also an import ban on import pf Ranbaxy , restricting the export of 30 drugs by the company to the United States, all this within couple of months of the deal. Post this situation the revenue of the company reduced by one fourth in the US and its stock price crashed around 80% below the acquisition price. After struggling for four years and paying a fine of $500 mn the issue was put to rest. But nevertheless the company’s situation was very uncomfortable and it still faces issues in US approvals.

In March 2015, one of the biggest mergers in India’s history happened between Sun Pharma and Ranbaxy, two major pharmaceutical players in the field. The merger was forecasted to bring about more than $250 million USD in synergies in the third year . Moreover, both of these established names were complementary in many of their core competencies, especially in areas of efficiency and expertise. Sun Pharma is known to be a global specialty giant with capabilities in dealing with the complex and niche territories of medicine, whilst Ranbaxy has a stronger global footprint in the sector of manufacturing generics (Jhawar, 2015). In fact, this was a move that was made in line with strategic approaches within the firm as seen in Figure

This report provides an analytical strategic review of the global pharmaceutical industry; its origin, evolution,

Ranbaxy Laboratories Ltd. (RLL) is the largest pharmaceutical company incorporated in India. It is also amongst the top league globally and is ranked 9th largest generic company worldwide. Ranbaxy is also credited with the tag of true Indian multinational. The company traces its roots to a chemist shop in Delhi. It is one of the first Indian pharmaceutical company to start a joint venture abroad. Rapid growth of Ranbaxy is attributed mainly to its focused research and joint ventures in India and abroad. It is also innovation and market driven, with a strong distribution network. The company was able to grow successfully in highly competitive markets. In the current business scenario, Ranbaxy is focusing on innovation, alliances, mergers