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Eli Lilly Developing Cymbalta Case Solution

Solution Id Length Case Author Case Publisher
2317 3239 Words (13 Pages) Elie Ofek, Ron Laufer Harvard Business School : 507044
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The case analysis pertains to the issue faced by Eli Lilly to create strategy for a successor medicine for Prozaic. Prozac is a very successful product of Eli Lilly contributing $2 billion per year revenues from antidepressant drug. The issue is highly pressing because there are only a few years remaining for patent protection of Prozac to expire. Major competitors of Eli Lilly are Pfizer, GSK and Wyeth that have patented alternate medications with slight different properties. To compete in this fiercely competitive environment, it is a common practice for drugs manufacturers to employ direct-to-consumer advertising. The new product will need to compete with competitive offering of other competitors and generics in the market.

Following questions are answered in this case study solution:

  1. Executive Summary

  2. Strategic Issues and Problems

  3. Analysis and Evaluation

  4. Recommendations

Case Study Questions Answers

Interviews which were carried out with different physicians revealed that there is a large number of depression patients which also have an ailment of pain in upper body. The incidence of pain was not only reported by general physicians, rather interviews with psychiatrists also confirmed the presence of pain among depression patients. Psychiatrists are more empathetic towards reporting of pain by their patients of depression. They believed that pain was caused by underlying physical conditions and were more willing to treat pain associated with depression. The characteristics of antidepressant which are most relevant for decision making process of the target market are safety feature of the product, minimization of side effects and dosage of the product. Price is found to be an important factor of purchase decision determination among almost all segments. 

The recommended strategy for Eli Lilly is to launch Cymbalta as soon as possible without waiting for either a one-day trial or pain-relief approval from FDA. A single-day dosage and pain relief are the product attributes which are going to be established later on. Clinical trials and FDA approval for pain relief can continue simultaneously to product launch.

2. Strategic Issues And Problems

Strategic issues and problems faced by Eli Lilly are multifarious. The central issue is to device a successor strategy for Prozac. Prozac is a very successful product of Eli Lilly Company and the marketing team at Eli Lilly is faced with the challenge of selecting one strategy for marketing a replacement product for Prozac among five available alternatives. The issue is highly pressing because there are only a few years remaining for patent protection of Prozac to expire. If issue is not resolved and solution implemented before expiry of patent protection, then Eli Lilly will lose its competitive edge and its $2 billion per year revenues from antidepressant drug will dry up when generic versions of the same Prozac could be sold by competitors. The complexity of the issue if heightened by the fact that it is not clearly known how much time is left before Prozac’s patent protection will be eliminated by the court of law. The problem is to reach a decision which can be implemented within time limit, minimizes side effects of anti-depressant drugs and offers features which are more desired by the target market and is favored by regulatory authorities, as well. 

3. Analysis And Evaluation                

Since the problem presented in the case has multiple dimensions, a number of different approaches have been used for analysis of the issue. The issue is not simply making a singular decision, rather the cross functional teams at Eli Lilly need to take a number of decisions in succession pertaining to the successor product. Assessment and analysis undertaken in this segment will systematically investigate the following areas: 

  • Weighing three criteria for selection of one product alternative; namely, efficacy, presence of toxicity and meeting previously unmet needs

  • Even after one product alternative is selected, prioritizing objectives of clinical trials need to take place

  • Whether to conduct a new set of clinical trials with the objective of establishing once-a-day dosage

  • Whether to delay submission of Cymbalta (a highly probable selection) for marketing approval for FDA

Some of the approaches used in the analysis focus on external environment, while others pertain to internal analysis of the company. 

Competitive Analysis: the market for anti depressant comprises of more than a hundred and twenty people worldwide. The cumulative market of anti-depressant drugs is almost eleven billion dollar in the year 2000. Several competitors partake of this eleven billion dollar market. Clinical depression comprises of a condition which lasts for more than two week and interferes with patients’ routine and normal activities. To category to this market, major players like Pfizer, GSK and Wyeth have patented alternate medications with slight different properties. The strongest competitor in anti-depressant product category is Wyeth with its brand of Effexor. The market share among these major players is almost equally divided except Wyeth with a market share of thirty six percent and sales in excess of three billion dollar annually. 

Eli Lilly does have considerable competitive edge in this highly competitive market based on supremacy of its existing brand Prozac. To compete in this fiercely competitive environment, it is a common practice for drugs manufacturers to employ direct-to-consumer advertising and to alter side-effects profile of the drugs with the objective to position their product slightly different from those of competitors. 

Even though, the mechanism through which these products work is the same in most part, yet these firms attempt to change small portions of their product offering to maximize benefits of pain relief and other minor benefits to the patient. The role of generic versions of the drug as a competitor in the current market is quite limited because majority of products have patent protection from being manufactured as generic versions. 

Valuable lessons can be drawn from competitor analysis. For instance, the market supremacy of Wyeth is found to be based on the fact that its brand Effexor also promises consumers relief from adjoining conditions other than depression. The drug is marketed to consumers as a cure for depression along with proven benefits to social anxiety disorder, panic attacks and generalized anxiety. Pristiq also gain its competitive edge from its adjoining function. Pristiq has the added functionality of enabling improved metabolism of the user. 

Another reason for which Pristiq has gained a competitive edge in a comparatively short period of time is that the packaging of product is also available in lower dosages. Eli Lilly should, therefore, tend to choose the product option which can treat adjoining ailments along with depression and which can be made available to consumers in smaller dosages, rather than being restricted for a maximum intake of once or twice a day.  

Competitor analysis also shows that patent on a few competitors’ products is about to expire too. This implies that the marketing effort of Eli Lilly will need to compete with those of other competitors in the market. 

Key Lessons From Market Research On Physicians: the market research in which physicians were inquired about the needs of the market and the preferences for attributes of the new product was highly helpful of product development and subsequent decision making. It has been found in competitive analysis above that that those products have a strong presence and a competitive edge in the market which derives their strength from treating those adjoining conditions which are found in patients of depression. 

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