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Eli Lilly Case

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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 known as tricycle antidepressants (TCA’s) and was for the treatment of depression. However, some of the side effects of this drug include blurred vision, mouth dryness, cardiac complications and when overdoses or misused could be highly lethal. Prozac was later launched in 1988 and was a selective serotonin inhibitor uptake. The Prozac was much safer than TCA because of its minimal side effects. When the Prozac was launched it showed that about 2.5 million prescriptions were given in a month in every year. Also the SSRI were introduced in the 1990s to the market. They include Celexa, Zoloft and Paxil. (THIS IS WHERE I LEFT OFF TO PROOFREAD)
Case summary Prozac is one of the anti-depression drugs produced by this company and it is set to expire in the few coming months. Lily Company is thinking of introducing another alternative drug to Prozac to be sold to the market after Prozac expiry. The NAT team is made of Brett Schmidli, and Mark Demitrack who work as colleagues at Lily Company. They introduced other two colleagues to NAR who are John Kaiser and Jim Lancaster due to the professional experience they had. The main of NAT team members is to find and develop a new alternative drug that would replace Prozac. Based on several test and analysis, the drug Cymbalta was chosen as the preferred drug that would replace Prozac. The marketing director of the company who is Kaiser was requested to present a topic concerning the development of Cymbalta drug as an antidepressant in place of Prozac. This report was given the title, “no pain no gain by Kaiser. He presented a general introduction on depression and analyzed the effectiveness of Cymbalta and comparing the effects it hand with that of the earlier brand Prozac. After his presentation, various challenges and concerns were raised by some members of the committee. These challenges according to the committee members would have an impact on the general goal of Cymbalta that was replacing the major brand. Various recommendations and suggestions were provided by the team members that were derived from the identified challenges. Depression Depression is mainly characterized by continuous emotional disturbance that affects the normal daily activities of an individual. Depression has an impact on one’s eating and sleeping and also in studies and work. The disease can last for a period of two week or may take even years. New England Journal of Medicine indicates that depression is a chronic disease that is highly prevalent as hypertension or high blood pressure in the medical practice. Other scientific publications studies have indicated that depression affects every individual in the population by 10 to 25% at a point in one’s life. Women are more at risk of developing depression and it is twice the chances as the men. Many people however do not seek medical interventions immediately despite the symptoms they have of depression.
Strategic Issues and Problems The report provided by Kaiser provides an in-depth analysis of the different options that will be associated with the alternative drug. The report shows how this new drug Cymbolgil will be implemented, the advantages it has, tradeoffs and risks associated with the replacement of the drug. With the expiration of the Prozac drug, Eli Lilly has been forced to make tough decisions concerning the development of a next generation patent as an antidepressant. Mainly the company has to decide whether it is supposed to develop a dose for once a day which is the Cymbalta (Duloxetine) or to first evaluate its efficacy on pain treatment and later seek the approval of the FDA. basically the drug Cymbalta (Duloxetine) had been tested to be an effective substance for major depressive disorder treatment and still stood to be approved by the FDA . In such a dilemma there is need to make decision concerning how the drug Cymbalta could be easily identified in the market place in contrast with other antidepressants this pose a challenge on the marketing strategy to be adopted as the main challenge that this new drug will pose to the company. The main challenge the company was facing was to find a new successor for the Prozac drug before its expiry in December 2003. Based on the facts from the case the Eli Lilly Company expects the new generic brand to have a much less costs compared to the Prozac. The company intends to make the generic brand to be less by 80% of the current price of Prozac. Another challenge is that the competitors do expect to cut down the sale of Prozac. These competitors are Paxil and Zoloft who aim that in a time period of two years they will have cut down the sale of Prozac by half.
Main factors in addressing the successive drug In order for Lilly Company to succeed in its new drug, it has to ensure the differentiation of the brand of this product and at the same time to ensure the uniqueness of the company is maintained. Branding enables the customers to be familiar with a product and to associate the product with a company that provides authentic drugs. The color as well as other physical attributes of the brand have to be made unique that will make the customers want to know what the new brand its. The company has already established a positive reputation in the market for more than a decade and is commonly referred to as the Prozac Company. This is not something that the company is not relaxed about; it has to ensure that the new product is capable of treating depression a just as the way the Prozac was effective. The company is also required to establish further studies in determining the link between depression and pain. This will enable the company to come up with a product that tackles all the depressive symptoms that a patient is experiencing. Eli Lily & Co is mainly facing the pressures from its profit based on these challenges various options have to be considered. Based on the findings by the NAT members the viable successor of Prozac as Cymbalta because they considered it as the better anti depressant compared to the existing ones.
Analysis and Evaluation The main strength that Eli Lily Company has is the strong historical background and it is known as a company that has introduced new products in the market place. Its innovations have seen the introduction of SSRI class products which have no side effects. The company is also working towards meeting the unmet demands and needs of customers. This can be seen in the provision of Prozac product that had minimal side effects compared to the previous anti depressant medication. Some of the challenges or weakness which the company has is the tendency of products to expire within a short duration, the high costs of the products and the internal challenges such as resistance for a successor medication. The Cymbalta was also considered for it’s showed on effects related to toxicity and other safety precautions. The selection of this drug was also to ensure that the needs of patients were meet and it showed promising signs of a product that could treat both depression and pain. In introducing the alternative for Prozac , it is important for the company to consider ways of dropping the prices not only of the new successor product but also of Prozac so that its sales does not drop. The new succeeding product also has to be developed through minimum overhead costs to ensure that the end product is affordable to customers. The 80% fall of price aimed by the company is a good strategy to fight the perception that Lily Company produces expensive products. This results to two alternatives that the company can choose from. It can either find a successor of Prozac or to consider the ethical concerns by dropping the Prozac prices.
Three Alternative Courses and their Pros and Cons The asset that Eli Company has to consider is;
1) R-fluoxetine this alternative has the same molecular chemical as fluoxetine but is mainly associated with various intolerability problems to the patients and this became an issue.
2.) The second option is the OFC that was combined with Zyprexa an active ingredient as well as the Prozac an active ingredient. Though the fact that FDA had approved of its use, it generally had a very small market compared to MDD.
3.) The 5HT2 is the third asset that the company could choose from. This product instead to block the serotonin stimulation selectively but its main limitation is the side effects it has on patients such as insomnia, agitation, restless and anxiety. Opportunities Lily Company has several business development opportunities to undertake. One of the opportunities is on the licensing compound in the treatment of depression which it can get from other companies dealing with pharmaceuticals at their different development stages. The results of this offered Lily two main opportunities but these opportunities were denied. The first opportunity was the Cymbalta product which is a nonrepineprine and serotin which was developed in 1990 by Lily Company but the medication failed to provide a satisfactory level for the treatment of MDD effectively at 20MG each day. Another opportunity that Lilly had from this analysis is the duloxetine – Cymbalta. The three key factors that characterize this product became Prozac’s successor. This product had no any issues related to toxicity or safety. It has the efficacy of being a better and good product compared to other existing antidepressants. The product also enabled the previously unmet needs of customers to be met. The main challenges that Cymbalta has are that the product lack a distinct and strong differentiation in the market. This is a product that had not been approved by FDA since it is at its trial phase. Third challenge is that the product is capable of relieving pain but it is not considered as a pain killer. There is also the challenge of Prozac cannibalization. The alternative in Cymbalta launching In the introduction of Cymbalta as a pain reliever it has to have the cost alternative. This will require enough time to carry out research which can be from 15 months to 18 months. Money is also needed in conducting trial and this can cost something from 25-50 million dollars. There will also be the need of promotional advertising that will support product branding and differentiation. On the option of introducing Cymbalta as an antidepressant as well as a pain reliever will require the following. First is that the cost alternative will something ranging from $50-$100 million that will be used in clinical trials. These trails will be two. There will also be need of conducting promotional advertising, research to justify the depression and pain side of the drug. There will also be the costs of potential loss as the first advantage mover. The financial constraints will be due in a period of 30 to 36 months. In launching Cymbalta as a pain reliever, the benefits and advantages will be the advantage as a first mover, will capture the niche market in becoming a pain reliever, Prozac will be cannibalized and Elli Lilly Company will benefit in terms of becoming more diverse as far as its products are concerned. Some of the disadvantages and problems incurred with the introduction of Cymbalta as a pain killer include the potential of internal resistance within Lily Company in dealing with pain. The company also faces a challenge of lack of experience in the therapeutic sector. There is also lack of proper guidelines by FDA in pain indicators development and there is the classification of a single pain item in HAMD-17. In the second option which is launching Cymbalta as both anti depressant and a pain reliever, the potential benefits will that Cymbalta will function in blocking neropinephrine and serotonin uptake. There is the benefit of using a single product in curing two health problems. The product will also help emphasizing the objectives of the company. And lastly is that the unmet needs of the previous customers will be fulfilled. The disadvantages and problems is this second alternative include the huge resources needed both in terms of money and time in ensuring that the products gets to the customers. Another challenge is lack of consistency among physicians in linking depression and pain. There is also the challenge of possible loss that is included in the first mover advantage.
Recommendations
Introducing Cymbalta as an anti-depressant and as a pain reliever has the best reasons. The drug will promote the long term growth and objectives of the company. There is also the possibility of differentiating Cymbalta from Prozac and the acts best option is that two health conditions a can be treated using one drug simultaneously and this reduces the end cost to the consumers. The other alternatives are not the bests because they only lead to short term growth, they do not comply with the needs so the company, the ability of product cannibalization and lack of differentiation. The company needs to develop and implementation plan that will include the clinical trials expenses, the need for approval from the FDA, market plan implementation, and for further research. The planning will be nationally implemented and this will only come after FDA has approved the product. The company also has to know the success measurements through researching on the prescriptions given by physicians, focus group differentiation, revenues, and comparing the sales between Cymbalta and Prozac.

Reference Eli Lilly: Developing Cymbalta pdf.

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