strategic alliances in marketing
TRANSCRIPT
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J. B. Chemicals & Pharmaceuticals Ltd.
www.jbcpl.com Copyright 2005 J. B. Chemicals Pvt. Ltd.
Strategic Alliances in Generic Marketing
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Co-operation adds to skills, reduces risksand the cost of entering new markets.
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Generic Product
Product containing an active ingredient which is
off-patent in majority of its markets
A typical product life cycle
Gro
wth
0
50
100
Year
20 3010 40
Proprietary Generic Commodity
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Importance of Generics
Global sales of Drugs : USD 600 billion
Generic Market in 2005 : USD 45 billion
4% more than previous year
Generics market share in coming 5 yrs :USD 00 billion
~ USD 00 billion (~ Rs 0,000 Cr.)
Products introduced in 980s and 990s are
getting off-patent Number of NCEs is not considerably high
Pharma Industry is ever growing industry
with demand always in surplus
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Art is to select generic that will bewinner versus one where there will
be enormous competition.
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Strategic Alliance
Strategic alliance is an inter-firm cooperative
relationship that involves trading of mutually
beneficial resources such as technologies and
skills.
Such relationships are built on credentials of
each participant and mutual trust.
Alliance involves sharing of risks with aim ofachieving increased gains for each participant.
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Need for Alliance
Regulatory prerequisite
Market reach newer markets for existing products
Newer products for existing markets
Cost effectiveness
Access to newer skills and technologies
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APIs
Packaging
Manufacturing
Clinical /BA-BE Studies
RegulatoryMarketing
Distribution
R &D
CRAM
IPR
Alliances
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Types of Alliance
M & A
Joint Venture
Equity investments and equity swaps
Marketing agreements
R&D collaborations and technology sharing Licensing and shared distribution/ service agreements
Collaboration for Government tenders
Long-term sourcing agreements
Joint manufacturing collaborations
Custom manufacturing
Contract Research and Manufacturing
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Generic Competition and Drug Prices
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Indian Pharmaceutical Industry - SWOT
Strengths
Low cost of production.
Large pool of installed capacities
Efficient technologies for large number of Generics.
Large pool of skilled technical manpower.
Increasing liberalization of government policies.
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WeaknessFragmentation of installed capacities.
Low technology level of Capital Goods of this section.
Non-availability of major intermediaries for bulk drugs.
Lack of experience to exploit efficiently the new patent
regime.
Very low key R&D.
Low share of India in World Pharmaceutical Production
( .2% of world production but having 6. % of world's
population).
Indian Pharmaceutical Industry - SWOT
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Weakness (contd.)
Very low level of Biotechnology in India and also for
New Drug Discovery Systems.
Lack of experience in International Trade.
Low level of strategic planning for future and also for
technology forecasting.
Indian Pharmaceutical Industry - SWOT
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OpportunitiesAging of the world population.
Growing incomes.
Growing attention for health.
New diagnoses and new social diseases.Spreading prophylactic approaches.
Saturation point of market is far away.
New therapy approaches.
New delivery systems.
Indian Pharmaceutical Industry - SWOT
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Opportunities (contd.)
Spreading attitude for soft medication (OTC drugs).
Spreading use of Generic Drugs.
GlobalizationEasier international trading.
New markets are opening.
Product patents
Indian Pharmaceutical Industry - SWOT
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Threats
Containment of rising health-care cost.
High Cost of discovering new products and fewer
discoveries.
Stricter registration procedures.High entry cost in newer markets.
High cost of sales and marketing.
Competition, particularly from generic products.
More potential new drugs and more efficient therapies.
Switching over form process patent to product patent.
Indian Pharmaceutical Industry - SWOT
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International Generic Drug Market & Penetration
The generic market in US is growing while in India it
may reduce as India moves towards Product Patent
Country Generic DrugMarket Generic Drugs as% of All Drug Sales
USA $ 24.8 billion 9%
Australia $ 0.58 billion 10%
Canada $ 1.24 billion 11%
UK $ 4.1 billion 18%
Mexico $ 9.0 billion 20%
Russia $ 4.1 billion 30%
India $ 5.7 billion 70%Source : The Wall Street Journal on 2/14/05
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Look at the sky.Look at the sky.We are not alone.We are not alone.
The whole universeThe whole universe
is friendly to us andis friendly to us and
conspires only toconspires only to
give the best togive the best to
those who dreamthose who dream
and work.and work.
H.E. President Dr. A.P.J. Abdul KalamH.E. President Dr. A.P.J. Abdul Kalam
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Thank you !