Premium Essay

Eli Lilly Case Study

In: Business and Management

Submitted By pds4409
Words 1959
Pages 8
Executive Summary
With the evolution of the Pharmaceutical industry in the US and the current decline of the blockbuster products of Eli Lilly which were coming to an end of their life cycle, the company is in the process of developing three new products that plan to launch in 1996. A great number of factors such as decrease of the industry growth rate, steady decline of innovation, increasing competition from competitors, generic drug substitutes, government regulations and an ever increasing cost in manufacturing, R&D and quality protocols and processes have made the decision to launch new products into the market place a necessity and created a topic of debate within the management and leadership of the company.

In response to these conditions, the management has established a company-wide initiative and goals to accomplish in the launching of their three new upcoming products. These goals were set up keeping in mind that the company wanted to bring new innovative products to their customers faster, cheaper and serving the needs of their customers.
1. Reduce manufacturing costs by 25%.
2. Reduce product development lead time by 50% as compared to the current lead time of 8 to 12 years.
3. Never Stock out – meet projected manufacturing demands.

The dilemma facing this company and the upcoming challenge has given rise to a difficult decision by Steve Muller, Manager of Strategic Facilities and Planning at Eli Lily and Company. The decision was to decide on the type of manufacturing facility that will be used in the manufacturing of these three new products. This was a critical decision as important factors such as Total overall costs of operations, Time to market, the capital investment, long term and short term development decisions, plant capacity profit margin and finally aligning all these decisions to the company’s goals and strategy.

The…...

Similar Documents

Premium Essay

Eli Lilly Case Study

...University of Maryland Case Study Analysis Eli Lilly: Developing Cymbalta Case Study AMBA 650 Section 1131 Kelvin Harris January 24, 2012 Executive Summary Eli Lilly and Company resounding success was the arrival of Prozac in 1988. By mid-1988, a new anti-depressant team was formed to find and develop a drug that would be the successor to Prozac. The strategic issues and problems they faced were developing a new drug to replace Prozac, meeting the company budget constraints to perform clinical trials, and finally launch the new drug by mid-2001. The analysis and evaluation revealed that the pharmaceutical industry is changing fast and it usually takes a long time and millions of dollars to develop a new drug. The recommendation for Eli Lilly is to take the lead in developing the new drug Cymbalta, invest a stable share of the company revenue, seek the FDA approval for the development of Cymbalta before going to market, and not change their market plan from the FDA approved Cymbalta dosage of 20 mg twice daily. Introduction Eli Lilly and Company was founded by Colonel Eli Lilly, Lilly’s namesake, in 1876 when he purchased a laboratory on Pearl Street in Indianapolis, Indiana. Eli Lilly was a pharmacist who had served in the Union Army during the Civil War. The company success included creating the process for applying gelatin-coating to pills for easier swallowing and the introduction of Iletin which was the first mass-produced insulin. ......

Words: 1938 - Pages: 8

Premium Essay

Joint Venture Agreements

...Eli Lilly in India Case Study BUS 545 – Global Business Management May 31, 2015 Andrew Juarez Professor Barnett   Executive Summary This report provides an analysis and evaluation of the case study “Eli Lilly in India”. The general overview of the case study is the discussion of the Joint Venture agreements between two parties. Eli Lilly a reputable pharmaceutical company entered the Indian market in a joint venture agreement with Ranbaxy. The joint venture between both parties was initially a positive move, they both had an increased market share, and were driving earnings, and the relationship between both companies was positive without negative circumstances. Thus, the issue problem arose when the partnership was at an impasse, both of the companies had different perspectives on the future of the joint venture, while Ranbaxy Laboratories Limited felt that generics would be most suitable for the future development of the company, Eli Lilly and Company were focused on growth and innovation. They had both made their mark within the growing Indian economy, though other firms began to flood the market. The decision had to be made whether Eli Lilly would continue to use Ranbaxy as an intermediate or would it be better for them to rethink the joint venture as they were seeking something that Ranbaxy wasn’t, stable growth in the global business environment. The company background, the current situation and any competitive issues. Eli Lilly & company works to......

Words: 1097 - Pages: 5

Free Essay

Eli Lilly Case

...Running head: ELI LILLY – DEVELOPING CYMBALTA CASE ANALYSIS 1 Week 4: Eli Libby – Developing Cymbalta Case Analysis Mary Juanita Hawkins University of Maryland University College Author Note This individual assignment was prepared for AMBA650, Section 9245, taught by Professor Philemon O. Oyewole. Introduction Eli Lilly and Company was established on May 10, 1876 in Indianapolis, IN and has been in business more than 132 years. The founder of this pharmaceutical company was Colonel Eli Lilly who was a union army member during the Civil War. This company deals with the development, discovery, sell, and manufacturer of drugs, such as Prozac and integrates supply-chain management within its departments. The first success that the company achieved was the coating of pills using gelatin. In 1923, the company marked another success by introducing Iletin that was used in improving diabetes. This project was the first largest insulin production that the company together with the University of Toronto invented. All through the 1950’s, various advancements were introduced such as the invention of the oral penicillin and the antibiotic known as Erythromycin. Prozac was produced in 1988 and latter succeeded in 1990. In 2000, the drug Zyprexa was utilized in the treatment of schizophrenia and later, the drug Gemzer was introduced for chemotherapy. Before Prozac the treatment available was Tofranil also......

Words: 2475 - Pages: 10

Premium Essay

Cymbalta Case

...Cymbalta Case Study Analysis Executive Summary Introduction: The Problem It’s April 2000 at Eli Lilly and Company where their flagship product Prozac is the leading brand of anti-depression medication and is set to expire in December 2003. Even though that is the official patent expiration date, no one within the company could be sure exactly how much time Prozac had left (Okef & Laufner, p.1). Patent expiration would mean that generic versions of the drug would flood the market and Prozac’s current $2 billion in annual sales would create a huge revenue gap (Okef & Laufner, p.1). John Kaiser, Marketing Director at Lilly is asked to give a presentation on a topic developing a successor to the now legendary anti depressant Prozac, which later on Kaiser titled “No Pain, No Gain.” He presented an overview of what depression is exactly and analyzed the effectiveness of Cymbalta comparing it to Prozac. After a four-and-a-half long marathon, some challenges and concerns were raised by some of the senior leaders of Lilly about their doubts that Cymbalta could in fact replace the leading brand. Strategic Planning In 1998, the New Antidepressant Team (NAT) was formed by two colleagues at Lilly: Mark Demitrack and Brett Schmidli, and later asked two other members Jim Lancaster and John Kaiser to join them based on their professional experience. The mission of the team was to find and develop a drug that would later replace Prozac. They quickly and efficiently narrowed...

Words: 695 - Pages: 3

Free Essay

Lily

...Analysis 18-21 Business-Level Strategy 22-24 Corporate Level Strategy 25-27 Strategy Implementation 28-30 References 31 Executive Summary A Customer’s Hope Eli Lilly and Company is on a mission that benefits millions of people every day by helping them live longer and fuller lives. They provide their customers with answers that matter—life saving and enhancing medicines. They carry out this mission by discovering, developing, and marketing pharmaceutical therapies. Many of the pharmaceutical products Lilly brings to market are first-in-class, providing customers a therapeutic relief that did not exist. An example of this is their newly FDA-cleared drug, Xigris™, which helps thousands of people every day by treating the potentially fatal condition of sepsis. The Lilly research team persevered over two decades to bring Xigris™ to fruition, even when over ten other companies failed to produce a viable drug remedy for sepsis (Eli Lilly Annual Report 2001). This dedication truly exemplifies Lilly’s commitment to their customers and transcends into all their efforts. Eli Lilly continues to be a successful pharmaceutical company, while other pharmaceutical companies have seen their success erode, because of the strategies they employ. Lilly has focused on building partnerships rather than acquisitions and continually reinvests the highest percentage of their sales revenue into research and development. Both of these actions......

Words: 11111 - Pages: 45

Premium Essay

Developing and Marketing a Blockbuster Drug: Lessons from Eli Lilly’s Experience with Prozac

...Drug: Eli Lilly’s Experience with Prozac BME-6 B. HBS CASE: “Developing and Marketing a Blockbuster Drug: Lessons from Eli Lilly’s experience with Prozac” 1. What factors contributed to Prozac becoming a blockbuster drug? Explain how each factor contributed and what management decisions helped the drug’s success. The following factors contributed to Prozac’s success: • Prozac’s low side effects and toxicity: The many drugs that were available before Prozac, such as tricyclic antidepressants (TCAs) and monoamine oxidase inhibitors (MAOIs) for treating depression, were too toxic or tricky to use except by trained psychiatrists. In the early 1970s, Ray Fuller, a senior Lilly pharmacologist, had been following new European research showing that a low concentration of serotonin in the brain was linked to depression. A Lilly chemist Bryan Malloy had synthesized some compounds intended to boost serotonin without the side effects of the TCAs. Human research data produced consistent and positive data. The new lower dose human studies revealed that 20 mg once a day was better than placebo and just as effective as TCAs taken multiple times a day. Prozac also produced fewer side effects, and was not lethal in overdose. Dropout rates on Prozac were comparable to the other TCAs and lower than for placebo that contributed to its success. • Thoughtful Marketing Launch Plan: When Prozac was launched in January 1988, Ken Cohen, the Marketing Manager made sure that Lilly was......

Words: 7816 - Pages: 32

Premium Essay

Cymbalta

...A Plan for Cymbalta to Surpass its Successor Executive summary: The paper analyzes the success of Eli Lilly and Company’s legendary antidepressant Prozac and determines how to replicate the company’s success with the launch of its new and improved potential product - Cymbalta. Eli Lilly’s growth is in appreciation of its flag ship product – Prozac, however with one year left to act on its expiring patent it is time to do some heavy strategic planning to introduce its successor. The paper will review the history of the strategic plan behind the rapid switch from Prozac to generic brands. As a result of this review a recommendation is made on how to devise a plan to introduce Cymbalta into an already competitive antidepressant market. This paper reviews the achievement of Merck-Medco’s marketing plan to introduce the generic brand of Prozac into the market and the pros and cons of implementing the same strategy when introducing Cymbalta to the market. Introduction: After trying a number of antidepressant drugs and without any real success, many have turned to the help of Prozac. Some complain that others drugs were too depression focused and did not address anxiety issues. Patients who are diagnosed with depression are often told that if they also experience pain it may be in their head and due to the depression or anxiety. Eli Lilly’s flag ship product – Prozac, flooded the drug industry receiving rave reviews for providing just the right amount of balance. As...

Words: 1082 - Pages: 5

Premium Essay

Case Study

...Management Assignment Submission Student Name: Christopher Brendan Cashen – 55455863 MMK1 - MBS in Marketing Cialis (Validus) Case Study Programme: Project Title: Module code: MG511 Lecturer: Project Due Date: Ms. Joanne Lynch 18-Jan-2010 Declaration I the undersigned declare that the project material, which I now submit, is my own work. Any assistance received by way of borrowing from the work of others has been cited and acknowledged within the work. I make this declaration in the knowledge that a breach of the rules pertaining to project submission may carry serious consequences. I am aware that the project will not be accepted unless this form has been handed in along with the project. Signed:_____________________ 2 Table of Contents Introduction – Page:4 External Marketing Audit – Page: The Market – Page: 6-11 Competition – Page: 11 - 14 Internal Marketing Audit – Page: 14 Strategic Issues Analysis – Page: 14 - 21 SWOT Analysis – Page: 21-24 Marketing Objectives – Page: 24 -25 Marketing Mix Decisions – Page: 25 - 29 Organisation and Implementation – Page: 29 -31 Control – Page: 31 -32 Bibliography : 33- 34 4- 6 3 Introduction Through extensive External and Internal analysis, the formulation for the best fit strategy has been developed and refined to suit the resources, culture and infrastructure of Lilly ICOS LLC. The name of the drug has been changed and the marketing approach developed as per the findings of the Macro......

Words: 11768 - Pages: 48

Free Essay

Cymbaltamkamara

...Cymbalta case Analysis Mohamed A. Kamara AMBA 650: Marketing Management and Innovation January 22, 2013 Table of Contents 1.0. Identification of the strategic issues and problems. 2.0. Analysis and evaluation. 3.2. Recommendations. 1.0. Identification of the strategic issues and problems. In April 2000, Eli Lilly’s New Antidepressant Team (NAT) convenes to review the potentials of alternative medications, and to subsequently adopt a replacement to the company’s premier antidepressant drug, Prozac, a form of fluoxetine molecule (Ofek & Laufer, 2008). Prozac’s huge market success after its market entry in 1988, these authors argue, is predicated on its ability to produce fewer side effects that resulted from targeted serotonin uptake; its tolerance to overdose; and, of course, its efficacy. However, Prozac’s success, with revenues of $2 billion a year, is without challenges. First, Prozac’s patent term expires in less than three years [in 2003], a patent already challenged by competitor, Barr Laboratories. In addition, the field of drugs that comprises Prozac has become crowded with available substitutes, such as Paxil, Zoloft, and Celexa, to name three. Also the market introduction of a much cheaper generic fluoxetine was imminent (Ofek & Laufer, 2008). The NAT’s task is to formulate a pre-mortem strategy for the highly profitable Prozac, specifically to find a replacement in Cymbalta. Cymbalta, the front runner among Prozac’s successors, bore......

Words: 1238 - Pages: 5

Premium Essay

Eli Lily

...Eli Lilly: The Evista Project® In early 1998 Dr. August “Gus” Watanabe, executive vice president of science and technology for Eli Lilly and president of Lilly Research Laboratories (see Exhibits 1 and 2), looked out his office window toward downtown Indianapolis. He was contemplating the future commercialization path for Lilly’s new, potential blockbuster drug, Evista®, which had received FDA approval on December 9, 1997, for the prevention of post-menopausal osteoporosis. Evista®, generically known as raloxifene hydrochloride, would be entering the estrogen replacement market, a market that had worldwide sales in excess of $1 billion in 1997.[1] Of even wider significance was the fact that in initial trials, Evista® appeared to lower the incidence of breast cancer and reduced total LDL in post-menopausal women without the negative side effect profiles of currently available estrogen replacement therapies. The potential of this new therapeutic and its impact on Lilly could be enormous. Some analysts predicted that Evista® might become a $1B drug for the company.[2] With this in mind, Watanabe knew that the decision on how best to commercialize Evista® would have a profound effect on Lilly’s well-being. Should Lilly follow its traditional approach to commercialization? Or should Lilly follow a course more in line with the development approach adopted for Evista® in early 1995, which would require the organization to transform its heavyweight......

Words: 7202 - Pages: 29

Premium Essay

Cymbalta

...Executive summary: With the fast approaching expiration of its Prozac patent, Eli Lilly has to decide regarding the future course of action of its next generation anti-depressant drug. In this case analysis, the company faces three critical decisions before NDA submission: 1) establish Cymbalta as efficacious for treating major depressive disorders (MDD) using once-a-day (QD) dosing, 2) pursue a separate pain indication in addition to submitting for an MDD using twice-daily (BID) dosing, and 3) delay submission until both issues were established. All of these options are complex and not without difficult trade-offs but based on market research of its customer segments and market potential, the best strategic option is to prove efficacy for treating MDD using QD and only after launch get FDA approval for treating pain. 1. FDA approval for once-a-day dosing for Cymbalta is more important to have at launch. First, Cymbalta is the successor to Prozac and with it carries the brand that creates this resonance in the mind of consumers (patients/physicians). This is a successful brand that patients trust, value and can identify with. With this brand, Lilly has established a perceptual positioning and differentiation from its competitors, and so as to introduce this next generation product for the first time for a different indication, Lilly could run the risk of losing their large customer base. Second, establishing efficacy for treating MDD using QD dosing is more promising than......

Words: 874 - Pages: 4

Premium Essay

Cialis Case Study

...Introduction In 2002, product leaders from the Biotech start-up ICOS, and Eli Lilly prepared to take a new erectile dysfunction medication to the market. Cialis would be positioned in a market which was currently dominated by Viagra, an erectile dysfunction medication that had been introduced by Pfizer in 1998. In the following case analysis, I will examine the process used by Lilly ICOS, LLC to bring Cialis to market. Utilizing the Harvard Business School Case “Product Team Cialis: Getting Ready to Market” I will point out certain facts surrounding the case, and highlight key issues. Alternative courses of action around bringing the product to market will be identified and evaluated. Finally, a recommended course of action for the company will be discussed. Facts Surrounding the Case At the time that Cialis was developed as an erectile dysfunction (ED) treatment, that landscape was being dominated by a single player. Viagra, developed by Pfizer, was released four years prior and enjoyed great success over the previous three years. Viagra, whose main ingredient is Sildenafil, was generating over $1 billion in sales for Pfizer year over year for the previous three years (Ofek, 2010). While Viagra was successful in its initial years in the initial market, it was not without its problems. Patient satisfaction with Viagra was below 50% in all markets with the exception of Germany and Italy. Viagra was only effective for hours post dosage, and was affected by the......

Words: 2108 - Pages: 9

Premium Essay

Seeds of Growth(Innovation & Technology Management)

...use of the business Web and digital techniques for connecting to customers can be an important part of this strategy. In his new book, How to Grow When Markets Don’t, Adrian Slywotzky of Mercer Management Consulting tracks through many case histories—and outlines the steps involved—in what he terms “demand innovation.” He illuminated the story further in a keynote speech at a recent meeting of the Institute for the Study of Business Markets (ISBM) at Penn State. Demand innovation involves thinking out of your normal place in the value chain and systematically investigating alternatives to create fundamental new value for and relationships with customers. This approach involves better understanding and unlocking the power of a firm’s “hidden assets” including (1) know-how, (2) special competencies, (3) manufacturing capacity, (4) Web-based resources, (5) knowledge of customers’ buying behavior, and (6) knowledge of customers’ downstream applications. Slywotzky discusses how firms such as Cardinal Health Care, Johnson Controls, Clarke American, Exxon Mobil, and others have found ways to grow—when markets don’t—by exploring new opportunities in the creation of demand together with their customers. As shown in Exhibit 1 on page 41, many of these cases involve an innovative look at where a firm is currently in what we’ve termed the “value Web.” This is the broadest space in which your firm has the opportunity to create value together with your customers, their customers, other......

Words: 1992 - Pages: 8

Premium Essay

Capstone

... | |Wyeth |NJ, U.S. |13,964 |17,358 |80.45% | |Abbott |IL, U.S. |13,600 |19,680 |69.11% | |Eli Lilly |IN, U.S. |13,059 |13,858 |94.23% | |Takeda |Japan |8,648 |10,046 |86.09% | |Schering-Plough |NJ, U.S. |6,417 |8,272 |77.57% | |Bayer |Germany |5,458 |37,013 |14.75% | |Source: 2004 Annual Reports of the companies |  |  | As Table 1.1 shows, the majority of the largest pharmaceutical companies are not diversified. They are either concentrated exclusively on pharmaceutical products (Eli Lilly and AstraZeneca are good examples with virtually 100% of their revenues coming from sales of pharmaceutical products) or, although they develop and manufacture other health care products, they still have pharmaceutical divisions as the core of their business that provide more than 50% of their revenues.......

Words: 10094 - Pages: 41

Premium Essay

Pharma Industry

... | |Wyeth |NJ, U.S. |13,964 |17,358 |80.45% | |Abbott |IL, U.S. |13,600 |19,680 |69.11% | |Eli Lilly |IN, U.S. |13,059 |13,858 |94.23% | |Takeda |Japan |8,648 |10,046 |86.09% | |Schering-Plough |NJ, U.S. |6,417 |8,272 |77.57% | |Bayer |Germany |5,458 |37,013 |14.75% | |Source: 2004 Annual Reports of the companies |  |  | As Table 1.1 shows, the majority of the largest pharmaceutical companies are not diversified. They are either concentrated exclusively on pharmaceutical products (Eli Lilly and AstraZeneca are good examples with virtually 100% of their revenues coming from sales of pharmaceutical products) or, although they develop and manufacture other health care products, they still have pharmaceutical divisions as the core of their business that provide more than 50% of their revenues.......

Words: 10094 - Pages: 41