Strategic Alliances in Marketing

8/9/2019 Strategic Alliances in Marketing

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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.

J. B. Chemicals & Pharmaceuticals Ltd.www.jbcpl.com. Copyright 2005 J. B. Chemicals Pvt. Ltd.


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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).



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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.



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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.



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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



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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.



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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 !

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Strategic Alliances in Marketing

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