How Can Biopharmaceutical Companies Control Patient Treatment Decisions?

There are multiple health concerns worldwide and more and more drugs are needed every day. Many drugs however, are extremely expensive to develop, test, and produce. According to the Tufts Center for the Study of Drug Development (2002), it costs up to $802 million to bring a new drug to the market. In 2002, pharmaceutical companies spent $34 billion in research and development (Center-Watch, 2003). In addition to the costs, the overall time from the discovery to approve and market the drug can take up to 15 years.

This case describes the reorganization of drug discovery at GlaxoSmithKline (GSK) following the formation of GSK from the merger of Glaxo Wellcome and SmithKline Beecham. This reorganization placed nearly 2,000 research scientists into six centers of excellence in drug discovery (CEDD). Each CEDD focused on a small set of therapeutic areas and possessed decision rights over the progression of pharmaceutical compounds through the early stages of development. It addresses issues about the benefits of focus vs. diversification in R&D, the role of decentralized vs. coordinated decision making, and the importance of alignment between the structural and infrastructural (e.g., performance incentives) aspects of an operating model.

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

Improvements in health care and life sciences are an important source of gains in health and longevity globally. The development of innovative pharmaceutical products plays a critical role in ensuring these continued gains. To encourage the continued development of new drugs, economic incentives are essential. These incentives are principally provided through direct and indirect government funding, intellectual property laws, and other policies that favor innovation. Without such incentives, private corporations, which bring to market the vast majority of new drugs, would be less able to assume the risks and costs necessary to continue their research and development (R&D). In the United States, government action has focused on creating the environment that would best encourage further innovation and yield a constant flow of new and innovative medicines to the market. The goal has been to ensure that consumers would benefit both from technological breakthroughs and the competition that further innovation generates. The United States also relies on a strong generic pharmaceutical industry to create added competitive pressure to lower drug prices. Recent action by the Administration and Congress has accelerated the flow of generic medicines to the market for precisely that reason. By contrast, in the Organization for Economic Cooperation and

The twenty-first century has seen pharmaceutical companies grow in unprecedented size and strength. Due to the unprecedented growth the larger pharmaceutical companies have gained leverage and power in the prescription drug industry, but they lack innovation to market and they seek ways to help the business continue to increase its profits. The pharmaceutical industry was once ethically sound and was a valuable player in the development of human health. However, overtime with the lack of innovation pharmaceutical companies are becoming an unethical market that exploits patients, doctors and anyone else it can to increase its profitability. With eyes only on profitability this can create a hazard for patients because there

Prescription drug prices are on the rise in the United States. Currently, the United States does not implement a price control on prescription drugs. Every day the supply and demand for prescription drugs fluctuates. Pharmaceutical companies produce drugs that are necessary for survival. Therefore, it is necessary for research and development to continue in the United States. Those suffering the effects of exorbitant prices must do so until a generic form of a prescription drug is produced. Once approved by the FDA, new drugs will make their appearance on the market and patients will no longer suffer financially. Until then, it is necessary for pharmaceutical companies to price their drugs based on the idea of supply and demand. This produces the profit used to fund research. Price controls discourage innovation. If a price control were set in place, of course the price of prescription drugs would decrease. However, the development of new drugs decreases with it. Today’s generation would benefit from lower prices, while future generations would suffer from the loss of drug innovation.

The first category of stakeholders in this case are the executives and managers. Their consideration is that the business strongly relies on partners helping them in the provision of the best value products to their customers. Retailers become increasingly dependent on strong managerial relationships in providing the best quality products within their customers’ optimal price points. The second category of stakeholders are the Medicare, Medicaid, and VA patients. These are the main cutomers of PharmaCARE. They are mainly interested in quality customer service as well as top-range products to address their needs (Jennings, 2010). For this reason,

Merck has initiated towards combining functional departments with a core cross-functional structure that focused on strategies and implementation. For instance, Ray Gilmartin established the Worldwide Business Strategy Teams (WBST) in 1995. The WBST, which consisted of 12 or 15 members from the US Human Health, marketing and MRL’s internal group, focused on managing, improving efforts and coordinating therapeutic franchises worldwide. Cross-functional groups can promote resources for category drugs, decide if marketable drug be evaluated in Phase V studies, look at possible impact sales and push for initiatives. If cross-functional groups are designed and perform correctly, then they will be

Within the last ten years a new topic has been on the discussion board. The topic, biosimilar drugs. Biosimilar drugs are drugs that are similar to biologics, but does not have the exact same chemical make up as biologics (). The reason for this is the fact that biologics are large scale molecular drugs that require a complex system to make the biologics. Biosimilar drugs would act like how generic drugs do in today’s market. One of the key goals of biosimilar drugs is to lower the overall cost of a medication (). The best way to describe it is the amount of money spent on a biologic as a patient is extremely high and the cost of a biosimilar drug would save the patient money by charging less.

For the past few years, there has been consistent media coverage detailing the trends of escalating prescription drug cost. Furthermore, articles question the pharmaceutical industry’s motives for such a significant increase in the cost of medications. There are accusations that industry price increases are a result of tactics to increase profits. In particular, the media’s coverage focused on major drug companies where price increases were obviously egregious. For example, Valeant Pharmaceuticals, Turing Pharmaceutical and Mylan Pharmaceutical were called before Congress in the past year, to answer questions pertaining their significant price increases for life saving medications. These three companies are considered to be outliers in the

The foremost concern the Pharm Universe management has is its’ desire to transform the organization into a multi-product company that would be able to compete in a global scale. The company has had a patented discovery and marketing of an effective blood clotting drug and they have been intent on developing new formulas for medications that would strengthen resistance against bacterial infections and reduce memory loss for the elderly. The pressure is on, though, for the unit members to come up with new and viable formulas that would put Pharm Universe ahead of the pharmaceutical competition. Failure to do so would mean dire consequences for the management team, even worse, termination from the company. Organizational issues can be rooted upon

Achieve a median composite eight-year product development cycle by 2010. Deliver two new molecular entity (NME) launches on average per year from 2010. In order to achieve the above objective, ensure that we have 10 or more NMEs in Phase III development by 2010. Development cycle times and quality for small molecules and biologics. Number of NME launches per year. Attrition rates. Number of development projects by phase. Number of in-licensing deals, alliances and acquisitions. R&D investment levels. Improving R&D quality and speed through leading-edge science, effective risk management and decision-making and overall business efficiency. Maximising the value of our biologics business and continuing to build a major presence in this fast-growing sector. Investing in external opportunities to enhance our internal innovation through in-licensing, alliances and acquisitions. 2008 target exceeded for small molecule development cycle times. NME and life-cycle management progressions

Drug portfolio management is one of the most important determinants of long-term prosperity of research-oriented pharmaceutical companies.

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

Although R&D has been retained by the large pharmaceutical firms, there has been a continuous decline in the R&D productivity. Controlling R&D is imperative to the success of a Pharmaceutical firm. However, as the pharmaceutical industry is maturing, there are diminishing returns to the R&D investment. Fewer and fewer blockbuster drugs are being discovered and therefore R&D is not the most value adding component in the value