Genzyme/Geltex Pharmaceuticals Joint Venture

Pharmaceutical products do not obey the rule of marginal utility. One gets no additional satisfaction by consuming an additional unit of a drug. The majority of consumers only take prescription drugs whenever they need them and are prescribed by a doctor. This means there is low likelihood of people taking more drugs to satisfy their desire, just like other goods.

3. No new drugs are to be available in the market for this indication in the next 5 years so it makes the product very lucrative.

21. What proportion of the drugs tested on human subjects are eventually approved by the FDA?

Another issue is too much power is given to scientists in decision-making of candidate drugs. Also there were inadequacies and lack of communication between marketing and research. Merck’s marketing and research needed to realize that the making of the drug is not only the most important part in increasing sales, but it also included a strong advertising campaign that will satisfy the needs of the customers.

In 2015, the pharmaceutical industry spent over 27 billion dollars on advertising. The two greatest components of this effort were promotional advertising and free medication sampling, which the pharmaceuticals invested 15.5 and 5.7 billion dollars respectively (“Persuading the Prescribers”). Promotional advertising involves direct contact with health professionals, the most common being extravagant lunch conferences held for physicians and their staff. On the other hand, sampling involves distributing free sample of medications to physicians, who then have a choice of providing these samples to patients. As a result of these methods, the industry has seen revenue around $400 billion with 90% of physicians having a relationship with a drug company (Campbell 2007). Moreover, the prices of prescriptions continue to rise; a copay of a generic drug is $11.72, preferred brand drug is $36.37 and a specialty drug is $58.37 (Coleman and Geneson 2014). Although the profits are immense in the numbers demonstrated above, it is no surprise when pharmaceutical drug companies elevate their prices even more. For instance, recently Turing Pharmaceuticals raised the price of their medication Daraprim from $13.50 to $750. Keep in mind, this medication is used for threatening parasitic infections, aids, and cancer with alternative options currently found to be inefficient (Pollack 2015). Another example of this practice involves cycloserine, a drug used to

Prescription drug prices rose three times faster than inflation in the decade between 1981 and 1991, making the pharmaceutical industry the nation's most profitable business. Prescription drugs even exceeded the rapidly rising inflation rate for all other medical services. They now represent at least 10% of all the medical

Issues have recently started developing around the drug since just a few years after it was put onto the market. Hundreds of people have died from taking the drug for the

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.

How did this happen? In the 1990's pharmaceutical companies said patients would not become addicted

affordable, the reform will likely increase the volume of drugs used in the U.S. — prescription rates are likely to rise, as will patients’ compliance to treatments.

I imagine that consumers would start to compare $150 a month to other things they pay $150 for: a week of groceries, a cell phone bill, a cable & internet bill, gas, etc. They may have hard time justifying the value of the drug at this price point and opt for a lower priced alternative, whether it’s Alli or a gym membership.

Prescription drug use has increased steadily in the U.S. over the last ten years. Nearly 70 percent of Americans are on at least one prescription drug and more than half of those receive at least two or more prescriptions. The amount of people who took at least one prescription drugs has accelerated 4 percent between the years 1999 and 2008. As there is a steady increase in drug consumption, drug development and regulation process should be taken more

Ratios aside, the patent of its older product (mainly Zyprexa) will expire in 2011. However, the increased in the newer products that accounts for total sales has increased to 24% from 18% in

This enabled numerous “me too” drugs to achieve satisfactory returns on investment. Imitating a known drug reduced R&D risk considerably, while the marketplace was open to products offering minor advantages such as a more convenient dosage with fewer side effects, but with much the same therapeutic outcome. Generics legislation had a major impact on the industry, providing incentives for innovation and a race to market. The time during which R&D costs could be recouped was drastically curtailed, putting upward pressure on prices. By the end of the 1970s generic entrants and more stringent controls on clinical trials had led to substantial increases in R&D spending.

In the late 1970s, Merck was falling off a 10-year dry season as far as new items. For about 10 years, the organization had depended on two physician endorsed drugs for a critical rate of its around $2 billion in yearly deals: Indocin, a treatment for rheumatoid joint inflammation, and Aldomet, a treatment for hypertension. Henry W. Gadsden, Merck's CEO from 1965 to 1976, alongside his successor, John J. Horan, were worried that the 17-year patent security on Merck's two major moneymakers would soon terminate, and started putting a tremendous sum in research.