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Pharmaceutical Industry Essays and Research Papers

Instructions for Pharmaceutical Industry College Essay Examples

Title: The Pharmaceutical Industry

Total Pages: 9 Words: 2330 References: 0 Citation Style: APA Document Type: Essay

Essay Instructions: Assignment topic:

?The Pharmaceutical Industry?

Research question include: Is thencost pf pharmaceuticals in the US too high? Should we regulate drug prices? Is the FDA adequately protecting us from unsafe drugs? Has Congress been co-opted by the pharmaceutical industry? Can we really afford the new pharmaceutical benefit recently enacted under the Medicare Modernization Act? Other related questions can be addressed as well.

7-9 pages in length with 6 references, 3 of which must include journal articles from peer-reviewed health-related journal.The journal articles must include a comprehensive discussion and analysis of the topic and most should be at least 4 pages in length. Two primary goals of assignment:1)allow you tao gain a solid and in-depth understanding of this important public health policy issue and 2) expose you to top leve, peer review literature in the health care management and policy fiels.

-A title page and page numbers

-Heading are required which presupposes an outline

-typewritten with 12 point font, 1 inch margins and double spaced

-Thoughtful and careful analysis of the elements of the topic, an interpretation of their meaning, and concluding by offering some implication for it all. Neither unsupported personal opinions nor summaries are acceptable. Opinions grounded in evidence and reasoned argument

-references must be submitted with the report-the actual articles. May be drawn from current print media an dmay include articles from the Wall Street Journal and New York Times

-Abstracts are not references nor are letters to the editor

Excerpt From Essay:

Title: US Health Care and Pharmaceuticial Industry

Total Pages: 5 Words: 1597 Works Cited: 1 Citation Style: MLA Document Type: Research Paper

Essay Instructions: Book -Cohn, Jonathan, Sick: The Untold Story of America?s Health Care Crisis--- and the People Who
Pay the Price. Harper Perennial, 2008

written reaction paper
that explains the implications of the issues raised in the book. This paper should
be no more than 5 pages and should focus on the relevant conclusions the
student reached from the reading. The paper should be size 12 font, 1.5 spaced
text and should address the following:
a. Brief summary of the book, including strengths and weaknesses
b. Relationship of the book?s primary subject to current healthcare events and
class lectures
c. Conclusions that impact or healthcare system and/or the pharmaceutical industry

Excerpt From Essay:

Title: market driven management

Total Pages: 75 Words: 25695 Bibliography: 0 Citation Style: APA Document Type: Essay

Essay Instructions: Dear Assay town,
Kindly use the following references in this dissertation
1. Market driven management (Jean-Jacques lambin) 2000
2. Marketing plans (MALCOLM McDonald) fifth edition
3. Marketing management ( Kotler- the millennium edition)

Competitive advantage based upon market-driven business philosophy:
How a pharmaceutical company can sustain a competitive advantage

Today . . . pharmaceutical firms find themselves in an environment characterized by downward pressure on revenues (driven by greater competition and institutional changes), upward pressure on development and manufacturing costs (driven by technological complexity and regulatory forces), and shorter product life cycles over which to recoup fixed R&D and capital investments. Additionally, shorter product lives mean that firms have less time to drive down costs to profitable levels before substitute or generic products reach the market.

This thesis will address the ability of a Sanofi-Synthelabo ?Dubai (an affiliate for a French international pharmaceutical company) to maintain a sustainable competitive advantage, based on adoption of a market-driven business strategy.

The importance of such paper, emerge from the fact that Sanofi-Synthelabo possess a great portfolio of products in the Gulf area, however the company still can not differentiate its products versus its competitors and subsequently still there is a great potential for the company to grow . The objective of the research is to introduce a more sophisticated marketing function to the marketing department of the company as well as to redefine the marketing responsibility inside the company to emphasize the concept that every one in the company has a piece of action all the way down the customer satisfaction road, based upon a more customer oriented business philosophy.


This research will address the concept of ?how to maintain a competitive advantage in the pharmaceutical business, based upon a market driven strategy??
This will necessitate analysis of the pharmaceutical industry in general and the impact of the external environmental factors in the gulf countries upon this industry, how different forces interact within this industry, and subsequently how these forces are driving pharmaceutical companies to differentiate their offering to their customers.

Having said this, next step will entail how Sanofi-Synthelabo is reacting to the market forces, in particularly the thesis will analyse the marketing initiative conducted by the marketing department of the company, the marketing mix for one of the company blockbuster product, and how other department (especially sales department) integrate marketing in their every day business,

A S.W.O.T analysis will then lead to identification of gaps between the current performance of the marketing department and the current business strategy, and the market driven strategy that thesis promote as a strategy for sustainable competitive advantage. The research will also focus on how to perform certain marketing function that can differentiate the company from its competitors i.e. strategic brand management

This research is motivated by the increased complexity in the competitive environment in the pharmaceutical industry, and is emphasising the concept of market orientation as a substitute for the traditional marketing concept of the 4ps.
Finally this thesis proposes a broader treatment of marketing integrating both its dimensions, strategic and operational. The thesis will address marketing function not only as an action-oriented process, but equally important as a business philosophy, that emphasizes the strategic choices upon which market driven management is based.

The key theories that going to be covered in this thesis are:

1-Macro-environmental analysis, evaluation for both external and internal factors affecting this company subsidiary in the Arab gulf area is going to be carried using both the PESTLE analysis and the 7Ss methods to identify to which degree the internal structure of the company fit with its external environment.

2- Competitive analysis. Using Porter analysis, the research is going to examine the role of different external competitive forces to San-Syn, and explain the importance of differentiation as a source of competitive advantage.

3-the role of the marketing in the firm and the different marketing philosophies (passive marketing, operational marketing and strategic marketing) and the limitations of each of these three different philosophies.

5- From marketing to market driven. And what are the implications of the market ?driven orientation on the marketing function of the company.

6- market-driven strategy development. This part is going to set the specific tasks to be performed by strategic marketing that entail identifying potential product segments on the basis of analysis of the customer?s needs which to be met, evaluating the attractiveness of the market, then evaluating the competitiveness level of Sa-Syn . And then on the basis of this strategic audit, a marketing strategy can be formulated for each business unit included in its product portfolio.

7- Change management theories

Proposed methodology
Primary data will be gained through a qualitative research will be conducted as Individual in-depth interviews (questionnaire-based interviews), with medical representatives, the sales managers and the product managers within the affiliate number to be interview will be from 15-20 individual. The aim of the interviews will be to identify the individual perception of different staff within the company regarding the marketing function within the organisation, and how effective this function is inside the affiliate.
Individual in-depth interviews are interviews that are conducted face to face with the
Respondent, in which the subject matter of the interview is explored in detail. There are two basic types of in-depth interviews. They are nondirective and semi structured, and their differences lie in the amount of guidance the interviewer provides.

In nondirective interviews the respondent is given maximum freedom to respond, within the bounds of topics of interest to the interviewer. Success depends on (1) establishing a
relaxed and sympathetic relationship; (2) the ability to probe in order to clarify and elaborate on interesting responses, without biasing the content of the responses; and (3) the skill of guiding the discussion back to the topic outline when digressions are unfruitful, always pursuing reasons behind the comments and answers.

Qualitative method was chosen since. Qualitative data are collected to know more about things that cannot be directly observed and measured like feelings, thoughts and intentions. In the same vein qualitative research is about to find out what is in an individual's mind. It is done in order to access and also get a rough idea about the person's perspective.

Secondary data
A thorough research of published literature will be used with resources such as books, journals, papers, Internet.

This research is going to address the efficacy of the marketing function within the organisation, therefore some of the questions that going to be asked during the interviews Questions that they perceive as invasion of privacy, that they think will embarrass them, or that may have a negative impact on their ego or status will not be honestly answered.
On the other hand, changing the functional role of the marketing department will have a great influence on the way the business flow, not only on the marketing department but equally on the role of the sales department and the affiliate as whole. Therefore it is most likely that, this sort of change will necessitate a leader that can centrally influence different department and clear the path for new business orientation.

The presented research is addressing a more customer oriented business, in an affiliate for an international pharmaceutical organisation as a way of sustaining a competitive edge through changing the traditional view of the marketing function, to a more market driven view. Where every act the business initiates should create value in the marketplace and where every one in the organisation is a marketer, no matter how seemingly remote they may appear from the traditional marketing process.
After completions of the interviews, the next step will entail reviewing different literatures that analyse the role of the marketing function within organisations, and the concept of market driven management.

Company history
Sanofi was established in1973, when the oil conglomerate Elf Aquitaine merged several diverse companies into one subsidiary. Capabilities of the new company included healthcare, cosmetics and animal nutrition.
In 1979, Elf spun off Sanofi. From this point on the company grew through a series of acquisitions and alliances, including a joint venture with American Home Products (now Wyeth) in 1982.
Towards the end of the 1980s and into the 1990s, the company developed its cosmetics operations with the acquisitions of Nina Ricci, in 1988, and the perfume business of Yves St. Laurent, 1n 1993. Later in the 1990s, Sanofi began to divest its veterinarian and biotech operations. This was closely followed by its beauty division, which had begun to incur losses. Nina Ricci was sold in 1996 and by 1999, the rest of the division had followed suit.
In 1999, Sanofi merged with Synthelabo. Synthelabo was founded in 1970, from the merger of Laboratoires Dausse and Laboratoires Robert et Carriere. L?Oreal bought a 53% interest in the company in 1973. In 1980, the company bought the drug firm Metabio-Jouillie. Other acquisitions followed throughout the 1980s. There were also several joint ventures established, including those with Mitsubishi Chemical Industries and Tanabe Seiyaku. In the early 1990s, the company acquired several smaller French companies.
This gave Synthelabo the strength to compete in the big international markets in the US and Asia. Sanorania Pharma was bought from Pharmacia & Upjohn in 1997, before the Sanofi merger in 1999.
After 1999, Sanofi-Synthelabo began to reorganize itself into a pharmaceutical specialist. This resulted in the sale of its animal feed, diagnostic and veterianary interests. During 2000, the company targeted the US market, by increasing its sales presence. Furthermore, in 2002, the company enhanced its capabilities with an alliance with Immuno-Designed Molecules, a biotechnology firm that developed cancer drugs.
Also in 2002, The Food and Drug Administration (FDA) approved Eligard for the treatment of advanced prostate cancer, and obtained supplementary US patents for the Eloxatin and Elitek active ingredients.
The FDA also gave marketing approval in major indication extensions for Plavix in acute coronary syndrome and for Aprovel in diabetic nephropathy (kidney disease) in patients with high blood pressure and type 2 diabetes. In March 2003, the FDA granted ARIXTRA (fondaparinux sodium) a six-month priority review for the new indication Prophylaxis of deep venous thrombosis, which may lead to pulmonary embolism, in patients undergoing hip fracture surgery, including extended prophylaxis.

Sanofi-Synthelabo is a drugs company, which specializes in four development areas that cover cardiovascular, central nervous system, oncology, and internal medicine formulations. For the fiscal year ended December 31, 2002, the company generated revenues of $7.0 billion, an increase of 15% over the previous year.
Sanofi-Synthelabo has a portfolio of around 50 compounds in development programs, around half of which are in phase II or III clinical trials. The company is well established in Europe and is attempting to capture the lucrative US and Asian markets. Sanofi is headquartered in Paris, France.

BUSINESS DESCRIPTION of the marketing department in the Gulf affiliate

Sanofi-Synth?labo offers a product range focused on a core group of four therapeutic areas. These areas include the Cardiovascular disease/Thrombosis segment; disorders of Central Nervous System, Oncology and Internal Medicine sectors. The company also operates in the fields of Consumer Health (OTC) Products and Generics.
Within the cardiovascular fields, it launched Aprovel (irbesartan) in 1997, in partnership with Bristol-Myers Squibb. Now marketed in more than 30 countries around the world, this marks the group?s development in the Hypertension field.
Plavix (clopidogrel), a platelet aggregation inhibitor, was launched in the US and Europe in 1998. A CAPRIE study involving over 19,000 patients suffering from first symptoms of atherothrombosis showed that it was apparently more effective than aspirin (the standard prescription). Sanofi entered the oncology field in 1996 with the launch of Eloxatin (oxaliplatine) in France. The product is registered in more than 50 countries. New compounds are under clinical investigation and others are in the launch phase, such as FASTURTEC.
Within the central nervous system field, the company?s Depakine, which has been in use for the past 30 years, is one of the world?s most-prescribed anti-epileptic medications. Another product in this field, Gabitril (Tiagabine), used for partial epilepsy, was prescribed to 14,500 patients during its launch year in 1998.
Urology, gastroenterology, allergy, respiratory disease, rheumatology, the muscular system and food metabolism are the main fields covered by Internal Medicine. Xatral
(alfuzosin) is indicated for benign prostatic hypertrophy, condition experienced by more than half of all men 60-years-old and over.
Sanofi possesses strong brands in the consumer health market, where products are either prescribed by a physician, recommended by a pharmacist, or purchased by consumers without a prescription.

Research results;
Interviewed staff
General manager 1
Product managers 4
National managers 3
Medical representatives  UAE: 4
 Kuwait: 4
 Oman : 2
 Qatar: 2
 Bahrain : 2

Total = 21 interviews were conducted
First question was about the main responsibilities of marketing in the affiliate
The responses to this question vary as follow;
General Manager associated marketing, with the followings; (new ideas generation, new opportunities, establishment of excellent relation with key opinion leaders in the field of medicine and supporting medical reps. in their duties.

National managers almost have the same response; all of them highlighted the responsibility of supporting medical reps. in their duties either through training sessions for the reps. or organising educational activities to the doctors. Furthermore national managers also associated marketing with the launch of new products (Kuwait manger), and the designing of the promotional materials used by medical reps. (U.A.E manager).

As for the product mangers
All product managers identified S.T.P (segmentation, targeting and positioning) as the core functions of the marketing department. However all of them didn?t associate their daily work with these concepts, and responded that most of their work are related to allocation of investments to certain educational events to customers (round table meetings, medical symposia and international medical conferences) and training sessions to medical reps. Furthermore all of them agreed that they contribute in the process of promoting the drugs when they join the medical reps, when the medical reps are
Incompetent to transfer the message they are requested to. In the same vein product managers felt that one of their main responsibilities are to keep close contact with K.O.Ls, and to convince the G.M regarding the investments allocated to each of them.

Last but not least, product managers highlighted the responsibility of collecting market data regarding the size of the different therapeutic segments, through questionnaires that are given to the medical reps, to be handed to the concerned doctors.

One product manager (among the four) regarded the annual marketing plan that are prepared each year to be sent to France head quarter at September, as a serious responsibility, for the others, they were taking the annual plane as an administrative job , since they agreed that these planes were never taken seriously by France head quarter.

As for the medical reps; all of them highlighted two roles for the marketing department. First the training sessions conducted to them by the product managers fro products medical knowledge and the round table activities that are conducted to doctors.
Medical reps in Kuwait and U.A.E ( the biggest two countries among the five countries) especially highlighted the need for marketers to develop relationship with key opinion leaders and other important non prescribers as purchasing department in ministry of health and medical store personnel in the ministry.

On the other hand, Medical reps in Qatar and Oman, indicated that the marketing department?s responsibility is to support them (with medical information and tactics) in order to help them to have this kind of strong relation with K.O.Ls.

Second question;
Addressed the effectiveness of the marketing function within the affiliate

The general manger responded to this question, that the marketing initiatives, that are requested from France office, to be implemented in the Gulf, are still not accomplished e.g. identifying the size of segments to be targeted for each product. However he did appreciate the support giving to the medical reps by the marketers in the affiliate.
He also addressed the need for creative ideas to be implemented by the product managers, without mentioning the nature exactly of what he meant.

As for the national managers, the respond varies from one to another;
For U.A.E manager , he appreciated the role played by the product managers in the educational activities, on the other hand he felt that allot of the questionnaires that are giving to the med reps in order to survey an incidence or prevalence of a diseases or in order to have key account data base, were some how ineffective and are not helping in better sales for the company, in the same vein U.A.E manger stated that he never ( not even once) read the marketing plans prepared annually by the product managers .

For Kuwait manager, he stressed the fact the product mangers are adding value to the company, mainly through the training sessions they are conducting for the medical reps.
Since the regional office of the Gulf countries is in UAE, he explained that K.O.Ls management is mainly done by him and his team in Kuwait and that the role played by the marketing department regarding this function, is minimal and should be improved.

For the third national manager of (Oman, Qatar and Bahrain)
He felt that the market department is very effective in both supporting his team, with the training sessions they are conducted for product knowledge, and for the level of relationship , the marketing department developed with K.O.Ls doctors in his countries. Furthermore he requested improvement in communication between him and the market department.

For product mangers
All of them complained from allot of administrative working. In addition they felt that there is no enough time for them to analyse their market or to plan for future activities. All of them agreed that , most of their time they are responding , either to requests from the medical reps to solve certain problems in the market , or to requests from the marketing director in France , who does not involve him self allot in understanding the nature of the market , they are operating in.

For the medical reps
Medical reps in U.A.E were the responders who felt allot of support from the marketing department, in different activities i.e. helping them in improving relation with doctors in key accounts, supporting them in understanding their market and how to deliver a proper message to the target doctors.
In Bahrain and Oman, medical reps also appreciated the kind of support; they are receiving from the product mangers, especially in allocating investment to certain marketing functions in their countries.

On the other hand both Kuwait and Qatar medial reps. complained from insufficient support from the marketing department, they felt that most investment decisions were taken without their participation in making those decisions, and therefore they felt that most of investments that took place were misplaced, because of misunderstanding of the market department to Kuwait market.

Macro-environmental analysis

PESTLE analysis is a useful framework that gives structured insight into what are the changes occurring in the organization?s general environment (Leicester2604. P, 1.46)
A PESTLE analysis will be carried out to SANOFI~SYNTHELABO subsidiary in the Arab gulf countries (UAE, Kuwait, Oman, Qatar and Bahrain) in order to analyse different factors that can influence the performance of SANOFI , in response to its external environment.

P stands for political factor
The political system in the gulf countries allows international organization to exist inside their countries, only under the umbrella of a native pharmaceutical agency, where part of the company revenue, goes to the agency, and in return this agency is expected to provide the company with strong level of connection within the country which can facilitate the activity of the company and the distribution of its goods. Therefore it is one of the important elements to the pharmaceutical companies in the Gulf States, to have a strong support from its native agency , in order to have better opportunities for its activity base on the level of support it receive from this agent.

Recently all of the gulf countries have decided to restrict free medications within its ministry of health hospitals (the big institutional hospitals), only to native individuals. This policy has restricted expatriates from receiving their medications from the institutional sector. Accordingly most of the pharmaceutical companies started to suffer from reduction in both, the consumption and subsequent ordering for its products from the ministry of health?s hospitals.
Nevertheless this was partly compensated by increasing request for medications in the private sector. This is the main reason why many pharmaceutical companies have started to shift its field force to the private sector and the private health insurance hospitals, in order to compensate their loss in the institutional sector.

The political system is also supporting two local pharmaceutical companies (Gulphar & Global) as there is a preferential treatment for these two companies i.e. through awardation of major contract of ministry of health to them in their line of products.

E refer to economic
Gulf countries saw very strong growth during the second half of the 1970s (8.6 per cent) (1975-1980), followed by a sluggish economic growth at 1.2% during the period 1980-2000.(United nations developmental programme2002.P,92) Figure 6.1 illustrates the pattern over time and shows that the overall trend was downward over the period as a whole. The fluctuating economic growth pattern seen in the gulf countries reflects mainly movement in the oil market on which mainly it strongly depends. This overall down trend has the affected the pharmaceutical industry in this area of the world by two ways;
First a very aggressive price regulation was stressed over the last few years among the Arab gulf countries which resulted in squeezing of the profit margin of most of the companies, and secondly the over all health care system?s expenditure on drugs ( specially new innovative drugs with premium price ) was reduced.

S refer to social
The Gulf countries has become a home to substantial expatriate population, reflecting a combination of the oil boom and domestic labour shortages, the number of the foreign workers in the gulf countries increased fivefold from 1970-1990 , expatriate are estimated to constitute over two third of the population in the gulf countries (UNDP 36)
Age Structure in the gulf countries is significantly younger than the global average, with about 26 % of the population under the age of 15.
the dependency ratio ( the ratio of economically inactive to the working age population, defined as those 15 to 64 years of age) are lower in the gulf countries than else where in the Arab world , owing to the presence of a large numbers of foreign workers.
Further more it is estimated that the proportion of the population age 65 or older will increase in the gulf countries to up to 9 % in 2020.
(United Nations developmental programme2002.P 38)

These key demographic dates can have the following impact on the pharmaceutical industry in the gulf countries:
 Majority of the population in these countries are expatriates, most of them are Asians with low income that can weaken their demands for medicines especially brands with premium prices.
 There is a good trend in the future, with increasing the proportion of the native elderly in the population and consequently increase the need for medications for this age group.

T stands for Technological
Arab countries have some of the lowest level of research funding in the world, according to the 1998 world science report of the United Nations educational, scientific and cultural organization (UNESCO). R& D expenditure as a percentage of GDP was a mere 0.4% For the Arab world in 1996 compared to 2.35% in 1994 for Israel as an example for comparison. (United Nations developmental programme2002.P, 65)
Despite the fact that technological changes are not expected to take place swiftly in the region and consequently local pharmaceutical companies will not have the competencies to compete against international companies like Sanofi~Synthelabo, still local pharmaceutical companies started to compete versus internationals , by manufacturing and selling drugs that become out of patent protection ( saving the huge budget of R& D) and providing much cheaper prices compared with the original brands produced by the internationals.

L stands for Legal environment
Legal dimensions in the Gulf countries don?t differ significantly from that of the developed world. The government has set of regulations in order to control the behaviour of the pharmaceutical industry. i.e. Legislation governs the rights of employees, it governs the way pharmaceutical companies can market its products ( code of ethics). Furthermore it sets out standards that must be embodied in the products provided by the company (through quality control and sample analysis for any medicine).
The legislative arm of the government also plays a role in pricing medicines and assuring the rights for the patients receive an honest data about the medicine from the company of manufacture in case he or she requests to have them.

In order to keep a sound relation with the government, it is important for the pharmaceutical companies to be aware of the legislations of each particular country and to run their activities in line with these regulations.

E stands for environmental or Ethical consideration
In the late twentieth-century urbanization created major air pollution problems in the Arab countries as a whole. The transport, industrial and energy sectors have had substantial effect on the environment (United Nations developmental programme2002.P, 45). Now there is a growing awareness of the community toward the environmental effect of the products and services. Sanofi~Synthelabo is giving a great deal of attention to the environmental and safety issues, there is no pharmaceutical manufacturing facility for the company, nevertheless still the gulf subsidiary is compliant with the policy of Sanofi~Synthelabo regarding this issue .This policy is the work of the HSE (health, safety and environmental) department within the company and it can be summarized as follow;
 1-In all the places in which the group operates it respects the applicable laws and regulations, applies expert recommendations and uses best industrial practices.

 2- Every product launch will be subjected to a safety, health and environmental risk assessment integrating all the scientific and technical knowledge of the group.

 Sanofi~Synthelabo takes care to minimise consumption of raw materials and energy and monitor and control gaseous emissions, aqueous effluents and solid waste
(Environnemental report 2002 Sanofi~Synth?labo 2001. P, 27)

The Arabic region especially the Gulf area is showing tremendous changes affecting all aspects i.e. politically, few local pharmaceutical manufactures are starting to build up the technology required for survival in this industry; furthermore these companies are receiving favourable treatment from the health authorities in these different countries, putting international pharmaceuticals in more fierce competition versus these local industries.
On other hand the fluctuating economic growth pattern, have reduced the health system budget, and exerted a lot of pressure on the pricing policy of a lot of pharmaceuticals.
Last but not least aging of the population will constitute an opportunity for companies producing drugs for this segment.

Industry analysis
Porter 1982, has determined the forces that drive any industry competition, his analysis is based on the idea that a company?s ability to exploit a competitive advantage in its reference market depends not only on the direct competition it faces, but also on the role played by rival forces , such as potential entrants , substitute products, customers and suppliers. The first two forces constitute a direct threat; the other two an indirect threat, because of their bargaining power. It is the combined interplay of these five competitive forces which determines the profit potential of the product market.

Figure: Porter?s Five Forces Model
Source: Porter (19800.

Using this framework to analyse the competition in the pharmaceutical industry

Threat of new entrants

The threat of new entrants in the pharmaceutical industry is minimal, since barriers to entry constitute a big challenge for any new comer. The main barriers are:

1- Capital requirements , which can be considerable , not only for production facilities, but more important for R& D investments that is crucial for the success of any pharmaceutical firm to succeed , marketing expenses and so on . Introducing a single drug can cost from $ 600 million to $1 billion from conception to launch. The average product can takes up to 15 years to develop.

2- Economy of scale and economy of scope, to an industry afflicted with excess production capacity. The logic of combining operations has been compelling enough to generate more than $150 billion of mergers and acquisitions among pharmaceutical companies in the last six years in order to achieve economy of scale and economy of scope.

3- Legal protection obtained through patents, is also another entry barriers that minimise the entry of new entrants.

Threat of substitute products
Substitute products are products that can perform the same function for the same customer groups, but are based on different technologies.
Substitution in the pharmaceutical industry were seen during the last ten years, especially in the cardiology field, where most of the heart beat irregularity diseases
(Cardiac arrhythmias) were treated with pharmaceutical products as a first line of therapy,
Recently pharmaceutical product?s role has been so much weaken, after the introduction of new technology i.e. I.C.D (Intra cardiac defibrillators) that becoming increasingly encouraged as a first line of therapy instead of drugs.
However, special attention has to be paid to switching costs (real or psychological), which is very high, and can offset the total replacement of anti arrhythmic drugs with I.C.Ds. Therefore with advanced technology it is foreseen that the medical equipment industry can represent a threat to pharmaceutical products in certain specialities of medicine.

Bargaining power of buyers
Unforgiving health regulatory regimes have put a lot pressure on pharmaceutical prices and have reduced the profit margin of firms within this industry. Brands with premium prices have to be endorsed by key opinion leader doctors, who influence the purchase of such products, and the practice of other doctors.
Furthermore medical associations either internationals or locals can influence to great extent the prescription habit of physicians and consequently the sales of a given pharmaceutical product. Medical guidelines and recommendations have always been one of the major drivers of any pharmaceutical product.
Recently with the era of the internet and the easiness of access to information regarding pharmaceutical products and pharmaceutical companies, has empowered end users i.e. patients role in choosing their medicine, and is becoming more and more important.
A well informed patient is increasingly becoming a decision maker regarding which drug to use.

Bargaining power of suppliers
Suppliers can exert bargaining power in the pharmaceutical industry either by rising prices of their raw materials or through reducing quality. This has lead to vertical integration within the pharmaceutical industry, where vertical integration for a big pharmaceutical company may therefore amount to acquiring or collaborating with a biotech company to obtain enabling technologies or to enrich its own R&D pipeline. In the case of the acquisition of a biotech company, the acquired research will very probably be non-overlapping with the in-house research, so that research at the sites of acquired company can continue as it is for the time being. Later, it can be tailored and pruned according to the needs of the acquiring company.

Rivalry among existing firms
The intensity and form of competitive struggle between direct rivals in a product market vary according to the nature of the actual competitive structure. This defines the degree of interdependence between rivals and the extent of the market power held by each competitor.
The pharmaceutical industry is characterized by being a very fragmented industry, recently mergers and acquisitions has led to a significant shift in the balance of power across the pharmaceutical industry, creating a number of ?mega-companies?. For the first time, take-over bids were completed amongst major companies, including Pfizer with Warner- Lambert, Pharmacia & Upjohn with Monsanto and Glaxo Wellcome with SmithKline Beecham. If other expected mergers go ahead, even larger entities could be created.

That factors that have been identified as driving companies to seek alternatives beyond organic growth, include:
 Slowing sales growth
 Cost containment is key on customers? agenda due to pressure on drug budgets
 Renewed emphasis on pharmaco-economic evidence, given the drive to meet budget constraints
 Shorter life-cycles of new compounds
 Scarcity of ?blockbuster? drug compounds.
 Higher costs of drug discovery technologies.
 Increased price competition and marketing spend required to combat:
o Patent expiries
o Generics
o Parallel imports

Still the opportunity for consolidation in this diffuse industry is very high, since the market share of the leading pharmaceutical company Pfizer constitutes only 7%.

However it should be considered that the competition between pharmaceutical companies is determined mainly by the therapeutic category, such as antihypertensive drugs, anti thrombosis drugs and so on.
Different therapeutic categories may show different competitive structures, for example the therapeutic class of anti cholesterol drug is an oligopolstic market where the number of competitors is low (Pfizer, Novartis, BMS and recently Astra Zeneca) and the degree of differentiation between the products is high. As a result rival firms in this class are highly interdependent, each firm knows well the forces at work and the actions of one firm are felt by the others, who are inclined to react. Therefore the outcome of a strategic action depends largely on weather or not competitor firm react.

The pharmaceutical market is sill a fragmented market, with more opportunities for consolidations through further mergers and acquisitions. The creation of mega companies will enable them to exploit economy of scale and of scope, and will give them a competitive edge with the size of investment they will afford to allocate to R&D.
However on the other hand, companies like SANOFI-SYNTHELABO, are having the chance to differentiate them self versus mega companies like Pfizer, through trying to identify strategies with more customer orientation. This will entail a genuine focus on the strategic aspect of the marketing function within the company, and how efficient the company will diffuse this customer orientation through its hierarchical structure.

Internal audit of SANOFI-SYNTHELABO (GULF)
The 7S framework is a useful framework for carrying out an internal audit of the organization, it forces one to audit an organization from all perspectives both hard (strategy, structure and systems) and soft (style, staff and shared values).
It was the first framework to incorporate resources and distinctive competence (skills of the organization). (Leicester2604.P, 1.51)

Carrying out a 7S analysis for Sanofi-Synthelabo in the gulf subsidiary will yield the following:
The strategy in the Gulf subsidiary, is concerning the strategic initiatives and approaches to manage this geographical area which includes five small countries (UAE, Kuwait, Oman, Qatar and Bahraini), and for handling daily operating tasks with strategic significance (Operating strategy).
These strategic initiatives may include decisions regarding;
 how to strengthen the company long term business by recommending certain company products to be marketed in the area according to the market need and deletion of certain products that are not profitable within this area
 how to achieve competitive advantage via allocation of the company resources including man power among the five countries according to the size of market and the potentiality of each market in the future.
 How to achieve the performance targets by providing the subordinates with action plans and monitor their performance with a reporting system in order to take corrective measure when needed.

Strategy is determined according to the area manager own thoughts and assumptions for this area of the world (strategy as thinking) (Leicester 2604.P, 1.17), moreover there is a relatively good feedback loop between the subordinates (the medical representatives and functional managers) and the area manager which influence the strategic decisions made by him. Thus a learning school of strategic decision process (leicester2604.P, 1.18) can be seen as well, especially in defining the quality of service needed for the customers (doctors & pharmacists). Finally the environmental factors like regulations of the gulf countries and the economic status also direct the strategic decision making process.

To conclude the strategy present in Sanofi~Synthelabo gulf subsidiary is basically
(A growth strategy) aiming toward communicating the uniqueness of the company products to its prospect to maintain a quality differentiation for its products in the mind of its prospects and continue to grow both in market share and revenue, this is implemented through;

 Training field force that is able of providing quality service to its target customers.
 Allocation of resources among the company products & among the different countries in the area.


Sanofi ~Synthelabo is having a vertical functional structure (Daft.P,316) with much defined line of authority where medical representatives of each country report and held accountable to one national manager , who in turn report to the area manager, further more also the medico-marketing department is reporting to the area manager directly.
 Line authority flows down this hierarchy form the position of the area manager, down to the supervisors and finally to the medical representatives.

 The medico-marketing department is having both staff authority and functional authority (Leicester 2600.P, 7.28) over the national managers and the medical reps.

there is a wide span of control with each national manager responsible for all medical reps within each country ( average 5 reps /country ) and one national manager is responsible for the medical reps of three countries ( Oman, Qatar and Bahrain) .

Decision authority is located at the top of the chart i.e. the area manager, giving the company a highly centralized structure with low level of delegation to the subordinates. The area manager has an autocratic style of leadership (Leicester2600.P, 7.32).

Analysing the mentioned structure, can show that the, level of coordination between the marketing department and the sales department is very poor. Product mangers are not allowed to view the daily reporting from the sales representatives, and market feed back data are mainly gained through joined visits with the sales reps, furthermore the higher manager is also promoting a sense of autonomy within each department, and in the same time he is not acting as a point of link between the different department. Therefore allot of opportunities are not cessed and the response of the company to the market and the customer?s requirement are some how slower than the competitive companies.

Sanofi~Synthelabo in the gulf is having a formal procedures through which it operates on daily basis.
The financial system records all expenses regularly and identifies expenses to its related activity and related products, in order to give an update view regarding the resources allocated to each country, each product and each activity. Thus resources are properly allocated among the different activities of the company.

The company also having a budgetary system, which is set annually .This system, helps to allocate resources to different products within each country according to the projected sales of each country.
Other systems which exist inside the company is the reporting system and the operational system, where the medical reps are given certain procedures in performing their work, then each medical rep has to perform a written daily report to his supervisor detailing his daily visits and providing feed back from the market.
Recently many medical reps have commented that these reports are time consuming and that it concentrates on performance rather than achieving tasks.
Finally the rewarding system inside the company is based on a financial incentive, where the medical reps are evaluated according to two main criteria; first achievement of individual targeted sales and second achievement of the whole country sales.
As for the product managers and the national managers, a monthly report is submitted to the general manager with the main activities conducted during the month and the plan for the next month activities. It is worthy to mention, that at this point, the product managers are having an access to all the national mangers reports.

The general manager in Sanofi-Synthelabo gulf, depend mainly on command and control with little or no participation from the supervisors or the medico marketing department.
This centralization is always accompanied by a consultative type of authority to limit its severity. As for national managers and the marketing seniors, they are more people oriented as they are in direct contact with the medical reps and therefore they represent the link between the field force and the general manager.

Sanofi~Synthelabo in the gulf is considering training of its medical representatives as a continuous process, furthermore hygiene factors (Daft. P, 540) like good offices, the pay system and stability in the company are all available.
Motivation is related to a monetary incentive scheme with an appraisal prepared by the area manager, furthermore the loyalty and the commitment present among the subordinate is moderate at the best estimate, since most of the time the appraising system is subjective and depends on the personal feeling of the general manager toward the subordinate.

Management of product
The first skill that Sanofi-Synthelabo does well in the gulf is the degree paid to product knowledge, since this is seen in every activity the company performs. Further more this skill is present among all the level of the organization hierarchy up to the area manager.
Another skill which the company perform it relatively good is the way it manages its products, there are three lines of product within the company, each line is a responsibility of one marketing senior, further more there a marked coordination between the marketing individuals. Thus products management is based on two concepts; first growing the product to its highest potential and second utilizing all the company products directed to one prospect, to improve the company image and create a sense of partnership between the doctor and the company.

Shared value

In order to understand the shared values of Sanofi-Synth?labo as a group, a little detailing of its history will be necessary to explain the origin of these values.
Basically Sanofi-Synth?labo had created after a merge took place between two small French companies, during the period from 1998 till the present time the company succeeded to be one of the 20 largest companies in the pharmaceutical industry worldwide, ranked number seven in Europe and second in France.

This growth did not alter the values presented in the two small companies at the time of the merge. Both companies did not offer the best monetary package in the pharmaceutical field (not even close), but there was always a sense of family spirit that was easily to be felt between the staff of the company at all levels, this was helped by the average size of each company alone which created an emotional bond between the employee of the company, that by some how was seen as a compensation for the low monetary package.

The best example to show the shared value (people come first) inside the organization, is that when the merge took place in 1999 non of the employee of the new company was laid off, which was not the case with many other mergers at the time
( Glaxo-wellcome had laid off thousands of its employee by the time it merged).

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Title: Quality and Data Base Management

Total Pages: 1 Words: 484 Sources: 0 Citation Style: MLA Document Type: Research Paper

Essay Instructions: Write a 300 word essay addressing the following issue: pharmaceutical industry is the most profitable sector of the U.S. economy. Is this a curse or a blessing to our healthcare system? Why?

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