Global Pharmaceutical Strategy

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Information about Global Pharmaceutical Strategy

Published on March 7, 2008

Author: rangnekar

Source: slideshare.net

Strategic responsiveness of the survivors of Big Pharma companies Amit Rangnekar NMIMS-PhD-2004 DIIS Seminar, Copenhagen 2 nd October, 2006

Industry Brief Pharmacies Takeda Pharmacies , dyes Roche, Hoechst, Ciba, Sandoz Pharmacies , dyes Wyeth, BMS, Lilly , Merck, Pfizer, Origin Cost controls Price controls, non harmonisation Pricing, marketing, innovation,generics Drivers / resistors 11% 29% 44% Market share Dominant, 8 of the top 10, account for 75% of local sales More US sales (43%) than European (34%), except SanofiAventis Strong US sales (60%), but low Europe sales (25%) Local companies Pharma Takeda, Sankyo Chemicals,agro,dyes, drugs, OTC- Hoechst, Bayer, Ciba, Sandoz Pharma, healthcare Pfizer, Merck, Wyeth, J&J Traditional focus on Japan Europe US

Key Growth Elements In Top 10 Markets IMS-Health MIDAS, December, 2005 9.1 2.5 4.3 2.3 Average 5.7 2.3 1.8 1.6 2005 7.2 2.3 2.7 2.2 2004 10 2.6 4.5 2.9 2003 9.2 2.6 4.3 2.3 2002 13.4 2.8 8.1 2.5 2001 Total New Products Volumes Price Year

Dynamics of the 21st century pharma Drivers Demographics Biologicals Emerging markets Innovation Resistors Drug discovery Patent expiries Generic onslaught Attrition rates of new molecules Opportunities Therapy niches Lifestyle diseases Unmet needs Outsourcing Concerns Drug safety Drug prices Industry credibility ?

Drivers

Demographics

Biologicals

Emerging markets

Innovation

Resistors

Drug discovery

Patent expiries

Generic onslaught

Attrition rates of new molecules

Opportunities

Therapy niches

Lifestyle diseases

Unmet needs

Outsourcing

Concerns

Drug safety

Drug prices

Industry credibility

Big Pharma Marketshare (1995-2004) Strivers

Big Pharma v/s World Pharma Growth % World pharma growth (%) Big pharma growth (%) Big Pharma on an average, has grown at 67% more than the world pharma industry growth rate between 1995 and 2004

Big Pharma- Growing dominance Rx oligopoly of the Top 10 Pharma companies 5 each from the US and EU Occupy Top 2 positions in every key therapeutic segment 6500 sales force employed in the critical US market (average per Big Pharma)

Rx oligopoly of the Top 10 Pharma companies

5 each from the US and EU

Occupy Top 2 positions in every key therapeutic segment

6500 sales force employed in the critical US market (average per Big Pharma)

Big Pharma driven strategic Shifts 1995 Fragmentation R&D focus Organic growth Domestic dominance Technology Healthcare / Chemicals- focus Prescription drugs Ownership 2004 Consolidation R&D Outsourcing Inorganic growth Global reach Innovation Pharma focus Generics Partnership

1995

Fragmentation

R&D focus

Organic growth

Domestic dominance

Technology

Healthcare / Chemicals- focus

Prescription drugs

Ownership

2004

Consolidation

R&D Outsourcing

Inorganic growth

Global reach

Innovation

Pharma focus

Generics

Partnership

Big Pharma Survivors (In red) Rank 1995 Merck Glaxo Bristol-Myers Squibb Hoechst Roche SmithKlineBeecham Pfizer Ciba Geigy Sandoz Bayer Rank 2004 Pfizer GlaxoSmithKline SanofiAventis Johnson & Johnson Merck AstraZeneca Roche Novartis Bristol-Myers Squibb Wyeth

Rank 1995

Merck

Glaxo

Bristol-Myers Squibb

Hoechst

Roche

SmithKlineBeecham

Pfizer

Ciba Geigy

Sandoz

Bayer

Rank 2004

Pfizer

GlaxoSmithKline

SanofiAventis

Johnson & Johnson

Merck

AstraZeneca

Roche

Novartis

Bristol-Myers Squibb

Wyeth

Big Pharma 2004- Market shares since 1997 Survivors of Big Pharma Other Big Pharma

Big Pharma Geographical Ranking 4 10 10 29 47 WMS % Novartis Pfizer Pfizer GSK GSK No 2 GSK Pfizer Latin America Novartis GSK Asia (minus Japan) Astellas Takeda Japan Novartis SanofiAventis Europe J&J Pfizer North America No 3 No 1 Region

Increasing Pharma Focus (%) Bayer decreased focus, lost MS, confirming lack of focus results in MS decline EU Big Pharma increased pharma focus thrice as much as the US companies

Bayer decreased focus, lost MS, confirming lack of focus results in MS decline

EU Big Pharma increased pharma focus thrice as much as the US companies

Strategies of Survivors Use of strategy: High +++ , Moderate ++ , Low + ++ ++ Strategic stake Novartis Roche GSK BMS Merck Pfizer + +++ ++ Eur +++ + + US +++ ++ +++ ++ Organic growth + + Co-promotion + + Eur ++ Eur + US ++ +++ US Alliances M&A Origin

Performance differentiators of Survivors Impact of strategy: Maximum +++ , Moderate ++ , Minimum + ++ +++ + +++ ++ Eur Novartis Eur Eur US US US Origin +++ ++ + ++ +++ Key segment presence ++ +++ + ++ +++ Block Busters + ++ +++ +++ +++ Patent threats +++ ++ Roche ++ +++ GSK + + BMS ++ ++ Merck + ++ Pfizer Lucrative Niche presence New Drugs

The survivors launched 7 new molecules per year against 4 new molecules for the stayers and the fringers Pfizer, GSK, Merck and BMS spent an average $5 million per year between 1998 to 2004 on lobbying costs The survivors occupy the Top 2 positions in every key therapy segment except CNS and GI Key facts 1995-2004

The survivors launched 7 new molecules per year against 4 new molecules for the stayers and the fringers

Pfizer, GSK, Merck and BMS spent an average $5 million per year between 1998 to 2004 on lobbying costs

The survivors occupy the Top 2 positions in every key therapy segment except CNS and GI

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