Strategic responsiveness  of the survivors of Big Pharma companies Amit Rangnekar NMIMS-PhD-2004 DIIS Seminar, Copenhagen ...
Industry Brief Pharmacies Takeda Pharmacies , dyes  Roche,  Hoechst, Ciba, Sandoz Pharmacies , dyes  Wyeth, BMS, Lilly , M...
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....
Dynamics of the 21st century pharma <ul><li>Drivers </li></ul><ul><li>Demographics </li></ul><ul><li>Biologicals </li></ul...
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 ...
Big Pharma- Growing dominance <ul><li>Rx oligopoly of the Top 10 Pharma companies </li></ul><ul><li>5 each from the US and...
Big Pharma driven strategic Shifts <ul><li>1995 </li></ul><ul><li>Fragmentation </li></ul><ul><li>R&D focus </li></ul><ul>...
Big Pharma Survivors (In red) <ul><li>Rank 1995 </li></ul><ul><li>Merck </li></ul><ul><li>Glaxo  </li></ul><ul><li>Bristol...
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 ...
Increasing Pharma Focus (%) <ul><li>Bayer decreased focus, lost MS, confirming lack of focus results in MS decline </li></...
Strategies of Survivors  Use of strategy:  High  +++ , Moderate  ++ , Low  + ++ ++ Strategic stake Novartis Roche GSK BMS ...
Performance differentiators of Survivors  Impact of strategy:  Maximum  +++ , Moderate  ++ , Minimum  + ++ +++ + +++ ++ Eu...
<ul><li>The survivors launched 7 new molecules per year against 4 new molecules for the stayers and the fringers </li></ul...
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Global Pharmaceutical Strategy

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Global Pharmaceutical Strategy

  1. 1. Strategic responsiveness of the survivors of Big Pharma companies Amit Rangnekar NMIMS-PhD-2004 DIIS Seminar, Copenhagen 2 nd October, 2006
  2. 2. 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
  3. 3. 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
  4. 4. Dynamics of the 21st century pharma <ul><li>Drivers </li></ul><ul><li>Demographics </li></ul><ul><li>Biologicals </li></ul><ul><li>Emerging markets </li></ul><ul><li>Innovation </li></ul><ul><li>Resistors </li></ul><ul><li>Drug discovery </li></ul><ul><li>Patent expiries </li></ul><ul><li>Generic onslaught </li></ul><ul><li>Attrition rates of new molecules </li></ul><ul><li>Opportunities </li></ul><ul><li>Therapy niches </li></ul><ul><li>Lifestyle diseases </li></ul><ul><li>Unmet needs </li></ul><ul><li>Outsourcing </li></ul><ul><li>Concerns </li></ul><ul><li>Drug safety </li></ul><ul><li>Drug prices </li></ul><ul><li>Industry credibility </li></ul>?
  5. 5. Big Pharma Marketshare (1995-2004) Strivers
  6. 6. 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
  7. 7. Big Pharma- Growing dominance <ul><li>Rx oligopoly of the Top 10 Pharma companies </li></ul><ul><li>5 each from the US and EU </li></ul><ul><li>Occupy Top 2 positions in every key therapeutic segment </li></ul><ul><li>6500 sales force employed in the critical US market (average per Big Pharma) </li></ul>
  8. 8. Big Pharma driven strategic Shifts <ul><li>1995 </li></ul><ul><li>Fragmentation </li></ul><ul><li>R&D focus </li></ul><ul><li>Organic growth </li></ul><ul><li>Domestic dominance </li></ul><ul><li>Technology </li></ul><ul><li>Healthcare / Chemicals- focus </li></ul><ul><li>Prescription drugs </li></ul><ul><li>Ownership </li></ul><ul><li>2004 </li></ul><ul><li>Consolidation </li></ul><ul><li>R&D Outsourcing </li></ul><ul><li>Inorganic growth </li></ul><ul><li>Global reach </li></ul><ul><li>Innovation </li></ul><ul><li>Pharma focus </li></ul><ul><li>Generics </li></ul><ul><li>Partnership </li></ul>
  9. 9. Big Pharma Survivors (In red) <ul><li>Rank 1995 </li></ul><ul><li>Merck </li></ul><ul><li>Glaxo </li></ul><ul><li>Bristol-Myers Squibb </li></ul><ul><li>Hoechst </li></ul><ul><li>Roche </li></ul><ul><li>SmithKlineBeecham </li></ul><ul><li>Pfizer </li></ul><ul><li>Ciba Geigy </li></ul><ul><li>Sandoz </li></ul><ul><li>Bayer </li></ul><ul><li>Rank 2004 </li></ul><ul><li>Pfizer </li></ul><ul><li>GlaxoSmithKline </li></ul><ul><li>SanofiAventis </li></ul><ul><li>Johnson & Johnson </li></ul><ul><li>Merck </li></ul><ul><li>AstraZeneca </li></ul><ul><li>Roche </li></ul><ul><li>Novartis </li></ul><ul><li>Bristol-Myers Squibb </li></ul><ul><li>Wyeth </li></ul>
  10. 10. Big Pharma 2004- Market shares since 1997 Survivors of Big Pharma Other Big Pharma
  11. 11. 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
  12. 12. Increasing Pharma Focus (%) <ul><li>Bayer decreased focus, lost MS, confirming lack of focus results in MS decline </li></ul><ul><li>EU Big Pharma increased pharma focus thrice as much as the US companies </li></ul>
  13. 13. 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
  14. 14. 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
  15. 15. <ul><li>The survivors launched 7 new molecules per year against 4 new molecules for the stayers and the fringers </li></ul><ul><li>Pfizer, GSK, Merck and BMS spent an average $5 million per year between 1998 to 2004 on lobbying costs </li></ul><ul><li>The survivors occupy the Top 2 positions in every key therapy segment except CNS and GI </li></ul>Key facts 1995-2004

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