Mba Cymbalta Analysis

Introduction

Since its inception Eli Lilly (Lilly) has enjoyed success because of its ability to provide innovative effective drugs. Much of that success is due to their leading drug Prozac and the patent they carry on it. However, the patent for Prozac ends in 2003 possibly sooner due to litigation and, Lilly’s leadership knows their competitors have generic versions waiting that will sell at a prohibitively lower price than Prozac. Lilly formed a cross-functional team of marketing and research and development (R&D) managers known as the New Antidepressant Team (NAT) to develop a strategic replacement for Prozac. Out of five possibilities they were investigating NAT has decided the best choice for a Prozac replacement is a new drug known as Cymbalta. NAT felt Cymbalta had the potential to work as good as or better than the competition, no apparent toxicity or side effects, and it could be differentiated by meeting previously unmet patient needs. The NAT was meeting to decide which clinical trial action would best strategically place Cymbalta in the market.

Strategic Issues and Problems

There are several underlying problems facing Lilly, the loss of revenue when the patent for Prozac expires, the hyper competitiveness of the anti-depressant market, and what trials to run in order to best place Cymbalta strategically in the market as a replacement for Prozac. Although Lilly has experienced great financial success with Prozac since its launch, Prozac at present is Lilly’s star drug with over “$2 billion in annual sales”; they have been repositioning their drugs in anticipation of when the patent expires. Higher management is aware that when the patent protection for Prozac comes to an end, the generic fluoxetine and branded substitutes such as Paxil with a new formula in 2001 and Lexapro expected to enter the market in 2002 to acquire a larger share of the prescription market and it will foreseeably leave a large financial gap for Lilly to fill....