Brazil JV

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Brazil JV

  1. 1. “ADVANTAGE” IN BRAZIL A SUCCESS STORY: Eli Lilly & Boehringer Mannheim JV AUG `96 - DEC `99 Copyright 2009 MANAS KANUNGO 1
  2. 2. Brazil: Lilly / Roche (BMC) Business Results BACKGROUND BOEHRINGER MANNHEIM Corp (BMC) & ELI LILLY HAD BOTH IDENTIFIED BRAZIL AS A PRIORITY COUNTRY w/ SIGNIFICANT GROWTH POTENTIAL. BASED ON THE GLOBAL MARKETING ALLIANCE EXISTING IN 1996, BOTH COMPANIES DECIDED TO INVEST IN A JOINT 5-YEAR AGREEMENT TO DEVELOP THE DIABETES BUSINESS IN BRAZIL. Copyright 2009 MANAS KANUNGO 2
  3. 3. Brazil: Lilly / Roche (BMC) Business Results BACKGROUND • PROJECT FORMALLY BEGAN EARLY `96, AND LAUNCHED IN AUG `96 • A NEW DIABETES CARE DEPARTMENT WAS FORMED WITHIN LILLY BRAZIL • BOTH MAINTAINED SHARED & SPECIFIC MARKETING RESPONSIBILITIES • BOTH COMPANIES SHARED A COMMON SALES FORCE • TEAM PROMOTED THE COMPLETE PORTFOLIO OF DIABETES PRODUCTS - ORAL TABLETS, URINE STRIPS, INSULIN, MONITORING SYSTEM Copyright 2009 MANAS KANUNGO 3
  4. 4. Brazil: Lilly / Roche (BMC) Business Results BACKGROUND THE ALLIANCE WAS TERMINATED OCT `31ST, `98, DUE TO ACQUISITION OF CORANGE / BOEHRINGER MANNHEIM BY HOFFMAN LA ROCHE. MONITORING BUSINESS FROM ASTA MEDICA & LILLY WERE TRANSFERRED TO NEWLY FORMED PATIENT CARE BUSINESS UNIT OF ROCHE DIAGNOSTICS BRAZIL IN JULY & NOV `98 RESPECTIVELY. Copyright 2009 MANAS KANUNGO 4
  5. 5. Brazil: Lilly / Roche (BMC) Business Results RELEVANT DEMOGRAPHICS - BRAZIL • POPULATION: 160 MM > 15% UNEMPLOYED • 250K TOTAL MDs; 150K GPs; 2K ENDOs; 250K NURSES; NO DNEs • 75K PHARMACISTS; 50K PHARMACIES INCL. 35 SPECIALIZED PHARMACIES • 6,500 HOSPITALS: PRIVATE, FEDERAL, STATE, MUNICIPAL Copyright 2009 MANAS KANUNGO 5
  6. 6. Brazil: Lilly / Roche (BMC) Business Results DIABETICS - BRAZIL • 7.6% DIABETICS • 2.5MM UNDIAGNOSED • 0.5MM BEING TREATED WITH INADEQUATE / UNACCEPTABLE THERAPIES • 22.3% OF DIAGNOSED GET NO TREATMENT • 40.7% ARE ON ORAL AGENTS • 29.1% ARE ON DIETETIC TREATMENT • 7.9% ARE ON INSULIN THERAPY Copyright 2009 MANAS KANUNGO 6
  7. 7. Brazil: Lilly / Roche (BMC) Business Results FINANCIAL, MARKET DEMOGRAPHICS: `96 - `98 • 10% - 15% OF EMPLOYED POPULATION WITH DISPOSABLE INCOME • VERY HIGH BUT RELATIVELY STABLE: IMPORT DUTIES CORP / SALES TAXES INTEREST RATES INFLATION • MINIMAL GOVERNMENT REIMBURSEMENT AND INSURANCE COVERAGE TILL JULY ‘96: BAYER ONLY COMPANY w/MONITORING PRODUCTS, > 70% SHARE BIOBRAS, NOVO, SOME LILLY INSULIN Copyright 2009 MANAS KANUNGO 7
  8. 8. Brazil: Lilly / Roche (BMC) Business Results LOCAL $ALES (x$ MM) 10 9.3 9 7.8 8 Humulin 7 Advantage 6 4.5 5 3.1 3.3 4 3 2.1 1.4 2 0.7 1 0 96 97 98 99* *Est $ = R$ 1.80 Lilly $ Share Est = 32% Copyright 2009 MANAS KANUNGO 8
  9. 9. Brazil: Lilly / Roche (BMC) Business Results HUMULIN UNIT SALES 700 700 600 Units x1000 432 500 400 291 300 181 200 100 0 96 97 98 99* *Forecast Copyright 2009 MANAS KANUNGO 9
  10. 10. Brazil: Lilly / Roche (BMC) Business Results HUMAN INSULIN IMS SHARES - UNITS 60.0% 53.1% Lilly Novo Biobras 45.3% 50.0% 42.3% 40.0% 28.2% 28.8% 29.0% 24.5% 26.6% 30.0% 22.4% 20.0% 10.0% 0.0% 96 97 98 Copyright 2009 MANAS KANUNGO 10
  11. 11. Brazil: Lilly / Roche (BMC) Business Results ADVANTAGE ORIGINAL vs ACTUAL LOCAL SALES ® (x$ MM) 18 Orig.Frcst. Actual Tot. Mkt. 18 16 13 14 12 10 12 Mnth 10 7.8 8 12 Mnth 6.3 6 12 Mnth 4.5 Aug - Dec 3.6 4 2 0.5 0.7 0 96 97 98 Copyright 2009 MANAS KANUNGO 11
  12. 12. Brazil: Lilly / Roche (BMC) Business Results ADVANTAGE MARKET SHARE 43% 34% 7% '96 '97 '98 Copyright 2009 MANAS KANUNGO 12
  13. 13. Brazil: Lilly / Roche (BMC) Business Results MONOTORING COMPANIES - $MM & SHARES ‘98 7.3 5.3 2.5 1.5 1.4 41% 29% 14% 0.5 8% 8% 3% Adv/Lily Bayer Abbott Roche Asta Others Copyright 2009 MANAS KANUNGO 13
  14. 14. Brazil: Lilly / Roche (BMC) Business Results TOTAL BM / ROCHE vs OTHERS - $MM & SHARES ‘98 10.2 Total Roche = Adv / Lilly 7.3 + Roche 1.5 + Asta 1.4 5.3 2.5 57% 29% 14% 0.5 3% Tot. Roche Bayer Abbott Others Copyright 2009 MANAS KANUNGO 14
  15. 15. Brazil: Lilly / Roche (BMC) Business Results ADVANTAGE METERS & KITS UNITS SOLD 36779 28366 Actual 4475 5000 3900 4500 Original 1996 1997 1998 Copyright 2009 MANAS KANUNGO 15
  16. 16. Brazil: Lilly / Roche (BMC) Business Results ADVANTAGE METERS & KITS $ALES & AUP ‘96 ‘97 ‘98 TOT $ Orig 160K 200K 200K Actual 290K 855K 1,169K KITS AUP Orig 42.24 43.29 45.45 Actual 73.21 73.81 76.57 METER AUP Orig 0 2.85 3.00 Actual 28.47 1.88 20.11 Copyright 2009 MANAS KANUNGO 16
  17. 17. Brazil: Lilly / Roche (BMC) Business Results ADVANTAGE EQUIV. VIALS ‘50 UNITS (X000) SOLD 200 160 102 85 Actual 10.9 Original 10.5 1996 1997 1998 Copyright 2009 MANAS KANUNGO 17
  18. 18. Brazil: Lilly / Roche (BMC) Business Results ADVANTAGE STRIPS $ALES & AUP ‘96 ‘97 ‘98 TOT $ Orig 260K 3,200K 5,800K Actual 395K 3,399K 6,279K ‘25 AUP Orig 16.25 14.41 15.59 Actual 18.95 17.05 16.50 ‘50 AUP Orig 30.97 32.25 33.81 Actual 35.78 32.78 30.76 Copyright 2009 MANAS KANUNGO 18
  19. 19. Brazil: Lilly / Roche (BMC) Business Results ADVANTAGE % SALES IN MAJOR SEGMENTS 72.0% 74.5% 69.5% Retail 30.5% 27.0% 25.5% Hospital '96 '97 '98 Copyright 2009 MANAS KANUNGO 19
  20. 20. Brazil: Lilly / Roche (BMC) Business Results ADVANTAGE $MM SALES IN MAJOR SEGMENTS 5.8 Retail 3.1 2.0 1.4 Hospital 0.5 0.2 '96 '97 '98 Copyright 2009 MANAS KANUNGO 20
  21. 21. Brazil: Lilly / Roche (BMC) Business Results 1998 ADVANTAGE % $ALES IN ALL SEGMENTS Govt. Hosp Distrib. 7% 11% Sp. Pharm Chains 48% 16% Priv. Hosp 18% Copyright 2009 MANAS KANUNGO 21
  22. 22. Brazil: Lilly / Roche (BMC) Business Results KEY SUCCESS FACTORS 1. ALL THREE PLAYERS - BM, LILLY, MARKET, WERE READY & COULD GROW 2. AN ALLIANCE DEDICATED FOR DIABETES with a COMPLETE PORTFOLIO 3. RAISING EVERYONE’S LEVEL OF AWARENESS, EDUCATION (H-J), TRAINING (see separate presentation on this initiative) Copyright 2009 MANAS KANUNGO 22
  23. 23. Brazil: Lilly / Roche (BMC) Business Results KEY SUCCESS FACTORS 4. GIVING CUSTOMERS WHAT THEY NEEDED MOST: ATTENTION FREQUENT VISITS, PARTNERSHIP IN THEIR EVENTS, ENHANCE THEIR KNOWLEDGE (H-J) HELP THEM DO THEIR JOB BETTER TOOLS FOR PATIENT USE: MATERIALS FOR EDUCATION, TRAINING, CONTROL PRODUCT THEY COULD RELY ON QUALITY, AVAILABILITY, TIMELY DELIVERY, PRICE, SERVICE, SUPPORT, HELP DESK Copyright 2009 MANAS KANUNGO 23
  24. 24. Brazil: Lilly / Roche (BMC) Business Results KEY SUCCESS FACTORS 5. THE TEAM’S COMMITTMENT FOR EFFECTIVE, LONG-TERM RESULTS: BUILDING AWARENESS & RECOGNITION VIA MEDIA, PROF. SOCIETIES, CONGRESSES HARVARD - JOSLIN - SBD EDUCATION & TRAINING PROGRAM FOR ENDOs, GPs, EDUCATORS * CLOSED - LOOP, PRIORITIZED, VALUE BASED PROGRAMS & PROMOTIONS * Please see separate presentation on this initiative. Copyright 2009 MANAS KANUNGO 24

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