Over the Counter HIV Testing: BD Veritor Product Research Analysis

1. Fall 2011
Over the Counter HIV Testing:
BD VeritorProduct Research Analysis
The “MetsGroup”:
JanessaShaikun,Kristin Fiorilli,HelenKim,
CaitlynRyan
Global Strategy Research Paper

2. Introduction
HIV/AIDS continues to be a plaguing issue among the World’s population, particularly in countries
classified as developing, such as India. Although certain studies suggest that India’s HIV prevalence may
have decreased in the last few years, the virus is still growing in specific areas and sub-cultures. In
addition, there are many unreported cases, making it very difficult to gather accurate data.
This research paper will show how BD Diagnostics can improve the treatment and spread of HIV/AIDs in
India by introducing an over-the-counter test called the BD Veritor. Due to the extremely high population
and regional diversity, choosing India may seem questionable; however, India is an ideal product launch
location especially since they currently have the ability to treat HIV/AIDS with inexpensive and effective
locally produced antiviral medications. Unfortunately, the country has been unable to fully utilize these
medications because much of its population is unaware of their infection. If the testing process was made
easier, as the BD Veritor would enable, it is likely that more of the population would get tested. In
addition, India has had a successful past with fighting other diseases such as polio, smallpox, and
tuberculosis (Steinbrooke).
The research in this report examines various components and factors related to the market environment
in India, cumulating in recommendations moving forward. BD Diagnostics is confident that with the
assistance of the Indian government in bringing this product to market, utilizing the BD Veritor is the first
step of prevention and ratification of the presence of HIV/AIDS in India.
Company Overview & Product Description
Becton, Dickinson and Company (BD) is one of the world’s leading medical technology companies. The
Company currently operates within three major business segments – Medical, Diagnostics, and
BioSciences. The BD Diagnostics (BDDS) business segment is primarily engaged in the development,
manufacture and sale of diagnostics, instrument systems, and reagents; and has operations in North

3. America, Europe, Latin America, Japan, and Asia Pacific.
The BD Veritor System, which falls under the BDDS product portfolio, represents the next generation in
rapid diagnostic testing. The name Veritor is derived from the Latin word veritas, which means “truth”; the
idea of truthfulness is one of the underlying values of the BD Corporation. This advanced, CLIA-waived
system is easy to use and comes with all-inclusive test kits. The device is a total system that provides
state-of-the-art sensitivity and specificity via a novel design that integrates unique particle and chemistry
technology with a low-cost, compact (fits in the palm of your hand) digital reader -- eliminating subjective
interpretation of test results and providing objective, definitive, positive or negative test result. The system
will have capabilities to read several different tests identified by a special bar code, and will deliver on-site
results in 10 minutes. The Veritor will first be used for HIV testing, with plans for STDs and infectious
diseases to potentially follow.
Strategic Analysis
SWOT
A SWOT Analysis shows that BDDS's broad product portfolio and global reach help to address the needs
of diverse market segments and minimize operational risk. Conversely, the business’s corporate silos and
limited experience in the consumer market could affect BD's market effectiveness and bottom line. See
Exhibit A.
Strategy Canvas
In order to achieve value innovation in a way that enables BD to attain both a favorable cost structure as
well as a sustainable value proposition to its buyers, the Company must first analyze the industry market
place in which it plays. The BD Veritor is compared against two competitors:
Indirect Competitor: In-office HIV tests
Direct Competitor: Over-the counter (OTC) HIV tests

4. As the strategy canvas in Exhibit B shows, direct industry competitors compete on features such as price,
test complexity, and time to result. Similar pricing structures are realized as most OTC HIV tests
(including Veritor) have in-country manufacturing plants which allow for cost containment as well as
process standardization and verification. Similarly, these types of products also provide consumers with
access to timely, low-complexity HIV testing that do not require the assistance of a trained medical
professional. Where the BD Veritor creates a sustainable competitive advantage is in Ease of Result
Interpretation and Product Accessibility. See Exhibit B.
ERRC Grid
In order to create a unique value curve and successful Blue Ocean Strategy, four actions must be
identified and implemented by BD. The four actions are as follows: Eliminate, Reduce, Raise, Create
(ERRC). Industry analysis leads us to believe that cost savings occur by eliminating and reducing
industry factors such as price and time to result and test complexity marketing claims. Simultaneously,
Veritor is able to create consumer value through increasing test accessibility and result clarity. See
Exhibit C.
Market Environment
Customer Profiles & Cultural Analysis
Amongst the various religions that are practiced in India, Hinduism is the most predominant, with 80% of
the population identifying themselves as Hindus (www.asianinfo.org). Hindu philosophy is a constant
throughout the Indian culture and essentially acts as the moral law that guides one’s life Invalid source
specified.. Although the attitude and climate towards the issue is slowly changing, the strong, traditional
values of Hinduism have long influenced the opposition of sexual education in India. Sex is rarely
discussed openly and there has been a lack of education on the subject in adolescent school programs.
In 2007, various states in India opposed and rejected new sexual health education initiatives designed by
the National Education Ministry and the government body responsible for combating the spread of AIDS,
declaring it “devaluated Indian culture and its values” (Gentleman). However, access to HIV education,
prevention and testing needs to grow. The rapid social changes sweeping through the country combined

5. with its large population can have damaging results if nothing is improved. Small statistical increases of
even 0.1% of HIV prevalence would mean over half a million newly infected people (www.avert.org). The
launch and open marketing of the Veritor could bring attention to India’s HIV issue that is being neglected
in the education system.
HIV prevalence is primarily within the southern and north-eastern regions of the country (www.avert.org).
States with the highest HIV prevalence rates include Andhra Pradesh (0.90%), Karnataka (0.63%) and
Maharashtra (0.55%) in the south; Manipur (1.40%) and Nagaland (0.78%) in the north east
(www.avert.org).
Within the adult HIV infected population, about 39% of them are women (www.avert.org). Of that
percentage, about 90% were infected by their husband or long-time partner (www.avert.org). Sexually
active and economically productive people between the ages of 15 to 44 are also seeing a significant
trend of infection rates. Other high risk groups identified are female sex workers, homosexual men, and
IV drug users. They account for 5.1%, 7.4%, and 7.2% of the HIV infection population, respectively
(www.avert.org).
Market Attractiveness
The creation of an innovative rapid OTC HIV test adds significant value worldwide, but the new demand
potential (achieved via the simultaneous pursuit of differentiation and low cost) present in India’s market
is superior for multiple reasons.
India’s drug market is expected to grow to 20 billion dollars by 2015 because of rising personal incomes,
the spread of chronic diseases, and the growth of hospitals and clinics across the country. Furthermore,
India has recently been listed as one of the top three countries for emerging pharmaceutical
conglomerates to perform clinical trials. This is largely credited to India’s economic atmosphere, as they
are able to offer faster time to market, reduced costs, and the same high quality that companies demand
(Emerging Market Report, 2007). This puts BD in an excellent position to not only have a successful

6. market entry with their complementary OTC rapid HIV test, but to continue to launch additional STD tests
over time. The ability to expand the Veritor to test more than HIV is key given the relative incidence and
spread of STD’s in India is one of the highest worldwide. In parts of India, 37.7% of the population was
diagnosed with Chlamydia, followed by Gonorrhea as a close second with 32.4%. Physicians predict that
as soon as these rapid tests are made available to the general public, these statistics would be cut in half
in less than five years (Bailey, 2011). This would provide earlier relief to patients, a faster return on
investment, a potential edge over competitors and a longer patent protection.
India offers a population of nearly 1 billion people and a growing market. The capabilities of the country's
scientists are globally some of the world’s best, which aids BD in their Veritor initiative. Also, the English
language is primary for education and research data from India and is preferred in most educational
materials and textbooks (Emerging Market Report, 2007). Though there are plenty of obstacles
pertaining to the difference in business styles of the US and India, lessening the language barrier is
critical in the adoption of new products.
Strong overall economic growth is expected to improve the health-care infrastructure. The Indian
government is also offering incentives to promote local pharmaceutical companies and attract foreign
firms. For example, there is a tax exemption on all profits for companies that conduct in-house R&D.
India plans to create an independent drug regulatory authority that will emulate the U.S. Food and Drug
Administration within the next two years. This central group should lead to more rigorous and consistent
drug regulations and higher overall standards (Chanana, 2007). India is also currently trying to pass
legislation that will make it easier to approve certain drug releases by teaming with the United States for a
dual drug approval process. This process will allow for the release of a drug in one country even if it was
approved in the other. These examples provide additional support that there is potential for the Indian
government and US companies to work together on medical innovations.
Recommendations

7. Naturally, due to India’s massive population and vast range of market segments, the BD Veritor cannot
immediately be brought to market on a country wide scale. BD’s recommendations for the product launch
are as follows:
 Initially target the larger cities in India that have regular access to drugstores and disposable
income.
 Build a partnership with Indian government to help streamline Veritor’s distribution channels. In
this example, the Indian government would purchase the BD Veritor and its accompanying test
kits and place them in high risk locations. The incentive for the government would be a risk
sharing program, if the government helps place the product in stores, BD would provide a
discount for all purchased systems.
 Due to limited experience selling to India’s consumer market, it is recommended that BD solicit
government assistance in marketing the product. For Veritor’s initial launch, the two entities
should collaborate on the following marketing and promotional items in order to establish
immediate awareness. These include:
o Press release before product is made available.
o Print advertisements with QR codes linking directly to where the closest location a test
can be found at.
o Social media campaign to quickly and cheaply reach segments that are frequent
computer users.
o Sensitive product placement and packaging: promote discreet packaging due to the
taboo nature of the product. Make available in vending machines and for online
purchasing (online sales will also increase reach and consumer data).
 Work with government to set up trending and disease monitoring programs in order to measure
compliance and disease state incidences. This can then be tied to downstream cost avoidance
due to an assumed decrease in HIV cases.

8. Appendix
Exhibit A:
Strengths
Diverse product portfolio
Since its inception, BD has made a conscious effort to enhance its product portfolio through strategic
acquisitions and internal development. Not only does BD have a broad product portfolio amongst each of
its three business segments, but also offers diverse business solutions within each of the business
segments themselves. The Diagnostic segment alone produces a wide range of instruments and reagent
systems to detect a comprehensive range of infectious diseases, healthcare-associated infections, and
cancers. The segment’s diverse detection solutions help to cater to assorted health-states and customer
needs. A broad product portfolio enables BD to be the one stop shop, catering to different needs of its
customers.
Strengths
• Diverse product portfolio
• International operations
• Strong brand equity
Weaknesses
• Limited experience in B2C market
• Limited customer touch points
• Corporate silos
Opportunities
• Aquisition of complementary medical
technologies
• Increased penetration in emerging
markets
• Global partnerships
Threats
• Government healthcare reforms and
policys
• Industry competition and consolidation
• Patent and intellectual property
infringement
Becton, Dickinson
and Company

9. International operations
As stated earlier, BD has operations in North America, Europe, Latin America, Japan, and Asia Pacific.
Not only has this enabled the Company to gain a deeper understanding of diverse needs around the
world, but this is particularly beneficial for the Company as it alleviates performance pressure from one
specific geographic population. It is important to note that BD, specifically their Diagnostic business
segment, both distributes and manufactures products in several regions, including India. Not only does
this reduce dependency on any one region for raw materials, but also offers a safeguard in the event of
unforeseen plant closures and disruptions. One example of this would be the earthquake that struck
Japan in 2011. Despite the fact that BD’s manufacturing plant in Japan was forced to close during that
period, customers were not without product due to the reallocation of resources in other manufacturing
plants within close proximity.
Strong brand equity
BD is a market share leader in nearly every business space it competes. Its favorable business reputation
aids in the adoption of new products and the regulatory acceptance.
Weaknesses
Limited experience in B2C market
With marketing and advertising trends now focused on the beneficiary of the treatment, the patient, BD is
perceived to be at a disadvantage in its experience to effectively market its products to the consumer
market. With most of its value propositions geared towards physicians and laboratorians, BD will have to
place a greater priority on marketing to and persuading end-users to proactively ask their healthcare
providers for BD products. Similarly, with testing trends becoming less complex as advancements in the
medical technology field are realized, consumer-operated diagnostic equipment has become a reality.
With the end-user and beneficiary being the same person, BD must look to develop customer personas
for their target audiences.
Limited customer touch points

10. In an effort to contain and reduce spending, BD has chosen to limit its sales and marketing efforts to
largely include only clinical studies and direct marketing sales materials. What the company chose to
drastically reduce was its online inventory presence, sales catalogs, journal advertisements, and in some
cases, sales personnel in low producing regions. The reduction of these customer touch points will likely
have an adverse effect on product and brand awareness, as well as purchase behavior, as the only way
to learn about or purchase new product is through an on-site sales visit from a BD associate.
Corporate silos
Despite the fact that each of BD’s three business segments have the same business objective (maximize
shareholder value), each segment largely acts independently of one another. The presence of such silos
is most commonly noticed when analyzing the BD sales force. In this instance, because of the Company’s
broad product portfolio, it is common to see sales personnel competing for the same customer accounts.
The proliferation of contradictory messaging has resulted in customer confusion and believably concerns.
BD must work to find a way to cohesively and effectively communicate and sell its portfolio with minimal
cannibalization and internal friction.
Opportunities
Acquisition of complementary medical technology businesses
Strategic acquisitions have allowed BD to expand its operations and product portfolio. The BDDS
business segment alone has made four significant acquisitions in the past 5 years, including the original
technology that inspired the development of the BD Veritor. With technology changing at a rapid pace it is
advantageous of BD not to devote years of internal development in pursuit of transient technologies, but
to continue to look for innovation through acquisitions that will complement its already diverse product
portfolio.
Increased penetration in emerging markets
Developing countries such as Brazil and India offer market attractiveness due to favorable healthcare
regulations and relatively limited economic depression. While BD has already set the ground work in
several emerging markets, there is now the opportunity to start refining these business strategies in order

11. to increase awareness and product penetration within these regions. Due to historically primitive
healthcare initiatives, emerging markets offer both growth potential for current BD products, as well as
limited competition in the diagnostics space.
Global partnerships
BD’s partnerships with such foundations as UNICEF and PEPFAR have not only showcased and
reinforced its internal message to ‘help all people live healthy lives,’ but their associations with these
types of organizations help to solidify BD’s favorable brand image in the market space. The continuation
of government and organizational partnerships offer BD the opportunity to sustain its positive reputation,
as well as foster relationships with whom the Company will need for product approval and endorsement.
Threats
Government healthcare reforms and policies
Despite its best efforts, BD cannot predict long-term government policies and reforms. Because of this,
BD is left susceptible to various tariffs and taxes, as well as costly approval processes that could
potentially delay or prohibit product launches. While the effects of future government-issued mandates
are unpredictable, these factors could result in reduced demand for BD’s products and increased
downward pricing pressure.
Industry competition and consolidation
The recent macro-economic landscape has led to much industry consolidation within the medical device
and diagnostic industries. Competitive partnerships and emerging industry players could affect BD’s
market share, as well as its ability to successfully compete within the space.
Patent and intellectual property infringement
The rise of technology and transparent partnerships has given way to an increased number of patent and
intellectual property (IP) infringement cases. BD must be mindful of infringement and patents as to avoid

12. low-cost generic offerings of their products. Both situations have the ability to drive down the cost of
products significantly, even to the point of knocking BD out of the market space.
Exhibit B:
In order to create a unique value curve and successful Blue Ocean Strategy, four actions must be
identified and implemented by BD. The four actions needed to create value are as follows: Eliminate
Reduce, Raise, Create (ERRC).
Industry analysis leads us to believe that cost savings are realized by eliminating and reducing industry
factors such as price and time to result and test complexity marketing claims. Simultaneously, Veritor is
able to create consumer value through increasing test accessibility and result clarity.
0
1
2
3
4
5
6
7
8
9
10
Strategy Canvas:BD Veritor
BD Veritor
In-Office HIV tests
Other OTC HIV tests
available in India

13. Exhibit C:
Eliminate Price Wars
In an effort to penetrate the market, many OTC HIV tests go head-to-head with pricing, each trying to
outdo the other with price reductions in hope of gaining sales volume. BD has chosen not to participate in
these price wars for four reasons:
1. Consumer behavior studies tell us that there is a strong perceptual correlation between price and
quality. While current OTC brands may advertise that they are giving their customers a ‘good
value,’ what they are really doing in de-valuing their brands and giving off the perception that their
product is of lower quality. This is an extremely risky strategy as the last thing HIV-testing
customers want is uncertainty over whether their test result is the correct diagnosis.
2. Price wars also have a detrimental effect on profit margins. As a for-profit company, BD’s primary
business objective is to maximize shareholder value. By offering the BD Veritor at market or
Eliminate
• Price Wars
Reduce
• Test Complexity
and Time to
Result Marketing
Claims
Raise
• Ease of Result
Interpretation
Create
• Accessibility

14. close-to-market price BD delays both the recuperation of invested funds, as well as future profit
margins.
3. Continually lowering price to match competitors shortens the product lifecycle tremendously and
will lead to the commoditization of BD’s brand at a much faster rate compared to natural attrition.
BD has chosen to maintain a premium pricing strategy to not only protect brand valuation, but
also to deflect brand corrosion and acceleration of product commoditization.
4. Lastly, the reason BD has chosen not to engage in price wars is to reinforce brand consistency.
BD is known in the market as a provider of high-end diagnostics. The implementation of a pricing
strategy inconsistent with their global brand is detrimental to their reputation.
Reduce Time to Result and Test Complexity Marketing Claims
When reviewing the value propositions of current OTC HIV tests all make similar claims with regard to
test complexity and time to result. While differences exist amongst competing brands, they are relatively
insignificant when looking at the broader picture. One example of this would be: Uni-Gold offers a result in
10 minutes, while Clearview Complete offers customers a definitive result in 15 minutes. Regardless of
the result, the relative impact of 5 minutes in irrelevant. BD has chosen to look beyond these marketing
claims as there is an understanding that both of these factors are transient technologies that WILL be
matched and improved upon by emerging technologies. In other words, result time and test use
complexity are not sustainable competitive advantages.
Raise Ease of Result Interpretation
The Veritor system creates a significant advantage in its ability to give an easy-to-read, objective result,
unlike in-office tests which require trained medical professionals to interpret results. The Veritor offers a
similar advantage over OTC HIV tests as the system’s digital reader eliminates any apprehension or
uncertainty over the result of a patient test when used by a non-medical operator. As shown in the
example below, the BD Veritor’s digital result readout allows customers to feel confident about the result
they receive. The elimination of result ambiguity is especially important in regions like India as there are
several dialects and the propensity for misinterpretation is high.

15. Create Accessibility
According to published reports, only a small portion of the Indian population (16.5 percent in urban areas
and 11.4 percent in rural areas) knows where to go for HIV testing. Furthermore, OTC HIV diagnostic
tests do not currently exist in traditional retail markets (only through licensed distributors). BD Veritor
looks to change the way sexually active adults’ access testing by making Veritor available for public
purchase in such places as online websites, convenience stores, pharmacies, and high-end vending
Shown (above): Two OTC
HIV tests are taken by the
same woman one after another.
One line means Not Positive,
two lines means Positive.
Based on these pictures, her
result is inconclusive.
Shown (below); BD Veritor’s
result readout which eliminates
any misinterpretation.

16. machines. Increased testing will not only help to drive awareness, but may act as a strong deterrent of the
spread of HIV. A lower incidence of HIV is assumed to then create a downstream cost avoidance
associated with drug therapy and costly patient treatment plans.
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