Eli Lilly in India: Rethinking the Joint Venture Strategy

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.

Instead of keep on compete with similar product on the market, Eli Lilly should look for new opportunities. Eli Lilly should ask their customers what their value for the

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.

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

1. Pricing: Many Asian and African countries are poor and cannot afford the costly medicines. The Pharmaceutical firms spend vast amounts on R&D in creating and marketing drugs, thus charging high prices enables for cost of capital recovery and profit generation.

However, according to exhibit 7, the major product segment information of Lilly has shifted from 35% anti-infectives and 26% neurosciences in 1996 to 48% neurosciences and 24% endocrinology in 2000. While the major project segment of Ranbaxy remains in anti infectants from 49% in 1996 to 56% in 2000. This suggests that the conflict of product between the two companies was insignificant and therefore, from Eli lilly’s perspective, continuing the joint venture would be a good option.

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

These are some of the reasons why the pharmaceutical companies think it is better to go out of the country so that they can make money there. In almost all the other countries of the world, the branded medicines are used

Critical issued of the appropriateness of conducting clinical trials in emerging countries has arisen over years. Being a leading company in biopharmaceutical industry, Novo Nordisk faces the critiques of whether it is justice to offshoring their clinical trials in developing economies. With the consistency of ethical principles brought up by Novo Nordisk, the company would be able to move their trials into emerging economies with the best interest for stakeholders. I will also propose ideas to Mr, Dejgaard for possible approach to media as well as the practices that Novo Nordisk could have changed over time at the end.

The Pfizer case provides an introduction to external analysis. The case highlights the pharmaceutical industry, which has enjoyed extraordinary long-run profitability. The case also demonstrates how broad changes in broad environmental factors (i.e. demographics, technology, culture, etc.) have an impact on industry competition. The case is not especially complex, so it is not overwhelming as a first case.

To obtain a competitive advantage, through the rapidity, efficiency and maximization of the profits, Eli Lilly should adopt the heavyweight team approach for the successful commercialization of Evista. In an industry where the rate of development of a successful product is 0.2% and the development time of more than 10 years, commercialization of a drug must be given utmost short-term importance lest a bad decision waste years of work. The short-term challenge the company faces is the resistance from the functional teams. The managers of the functional teams must be trained to understand the importance of generating profits for the organization and hence the need for sharing/temporarily losing their key resources. Though the heavyweight teams were given free-hand in choosing and utilizing the resources in the development phase; during the

Most analysts awarded this change in the drift to Cipla's strategy, which showed to be more suitable to the market scenario then. In early 2005, competition was increasing and pricing pressure was unrelenting. Ranbaxy was the most globalized pharma company in India, with a ground presence in 49 countries, products available in 125 countries, and manufacturing operations in eight countries. In '05, Ranbaxy's formulation sales in markets outside India were $463m (40% of overall revenue). On the contrary, Cipla dis not even have its own marketing presence anywhere outside India. Cipla was also,

Eli Lilly & Company (Lilly) was founding in 1876 by Colonel Eli Lilly in Indianapolis, Indiana. A veteran of the United States Civil War and a pharmaceutical chemist by trade, Lilly set out to start a company with three underlying goals. First manufacture high quality pharmaceutical products, second medications would be dispensed by medical staff rather than through a mobile tradeshows which was popular at the time, and finally, Lilly’s medication would be developed using current science data. In 1886, Lilly went on to hire a pharmaceutical chemist which led to Lilly’s esteemed research and development history that they are known for to this very day (Lilly, 2015).

There are two main operational strategic issues that Eli Lilly will face: the war on patents and the golden pipeline. These operational issues go hand in hand with each other. Taking a look at the golden pipeline, this an area that can either kill or bring a pharmaceutical company to stardom. There is a choice that pharmaceutical companies need to make: either create a different drug that is more effective for something that is already produced or create something new that has not been on the market before. Eli Lilly needs to strategically think of where they want to be and how their pipeline will align with their vision: “We will make a significant contribution to humanity by improving global health in the 21st century” (Eli Lilly About).

Global pharmaceuticals had presence in India since early 80’s and it was not until 1993 that Eli Lilly International decided to establish a Joint Venture with India’s second largest laboratory and exporter, Ranbaxy. This move happened in a very challenging context as both companies have very different profiles and backgrounds. The main differential characteristic was the nature of their products. While Ranbaxy was focused on generics and in other intermediate products, Eli Lilly International core business was the commercialization and development of new drugs through an aggressive R&D strategy. The trigger for Eli Lilly to