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Eli Lilly Developing Cymbalta - Case Study Example

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This case study "Eli Lilly – Developing Cymbalta" discusses a US-based company that manufactures and sells Prozac – a kind of anti-depressant drug which has been protected by a patent right back in 1988 (Ofek and Laufer 5). Prozac’s patent right was expected to expire in December 2003 (1)…
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Eli Lilly Developing Cymbalta
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Eli Lilly – Developing Cymbalta Identification of the Strategic Issues and Problems Eli Lilly is a US-based company that manufactures and sells Prozac – a kind of anti-depressant drug which has been protected by a patent right back in 1988 (Ofek and Laufer 5). Prozac’s patent right was expected to expire in December 2003 (1). Even before it expires, Eli Lilly and company had to find a new successor for Prozac (7). Other pharmaceutical companies such as Barr Laboratories have been waiting for the right moment to enter the market by selling generic drugs that are similar to Prozac (i.e. generic fluoxetine, etc.) (1). To prevent other pharmaceutical companies from grabbing a large portion of Eli Lilly’s market shares in the selling of antidepressant drugs, Eli Lilly and company is considering the need to replace Prozac with its successor. Eventually, the successor of Prozac is expected to be launched at least 18 months prior to the date wherein Prozac’s patent right would expire (18). The New Antidepressant Team (NAT) is composed of people from Eli Lilly’s R&D and marketing department (7). During the initial stage of searching for Prozac’s successor, members of NAT investigated a total of five (5) assets known as: (1) R-fluoxetine; (2) olanzapine-fluoxetine combination (OFC); (3) 5HT2 antagonist SSRI; (4) business development opportunities; and (5) Cymbalta (duloxetine) (7 – 8). In general, there are serious constraints in the first four (4) assets. Therefore, the members of NAT decided to pursue the future development of Cymbalta as the best option. For instance, even though the use of R-fluoxetine can prevent the side effects of Prozac which include sexual dysfunction and insomnia, this particular drug composition is patented by Sepracor. In the process of entering a license agreement with Sepracor, Eli Lilly will have to share part of its profit with the said company. Furthermore, the use of R-fluoxetine can trigger serious side effects on the part of the patients. Therefore, it is not advisable for Eli Lilly to invest in the future development of R-fluoxetine. Although OFC has been approved by the FDA, investing in the future development of OFC is also questionable because of the small market size of people with bipolar depression (2.5 million patients or less than 1% of U.S. population) as compared to individuals with major depressive disorder (10% of U.S. population). It means that focusing on the development of OFC would mean less sales and profit on the part of Eli Lilly. The 5HT2 antagonist SSRI is effective in terms of reducing side effects such as anxiety, agitation, insomnia, restlessness, and sexual dysfunction. However, it is not advisable to invest further on this option because of its toxic effects on animals. Lastly, there was an issue of business conflict in Eli Lilly’s in-license compound from other pharmaceutical companies (8). As a potential successor of Prozac, the NAT has to decide on three (3) options for Cymbalta before the official NDA submission. These options include: (1) the need to prove the efficiency or effectiveness 60 mg of Cymbalta once a day (QD) when treating major depressive disorder; (2) conduct a clinical trial which aims to allow the company to come up with an entirely new pain indicator for Cymbalta on top of presenting the drug efficacy using 20 to 40 mg of Cymbalta at least two times a day (BID); and (3) postpone the NDA submission for several years until option 1 and 2 has been satisfied (15). Analysis and Evaluation In search for Prozac’s successor, conducting a marketing research is important in terms of determining the target market and the future expected sales and profitability of Eli Lilly. Specifically the end users of Cymbalta include all individuals who are suffering from major depressive disorder. In line with this, it is necessary to take note that consumer behavior about certain drugs is highly dependent on what they physicians would prescribe to them. In this context, it is clear that physicians play a significant role as one of the strongest influencers in the selling of prescription drugs next to advertisements (12). Pros and Cons of Each Alternative Option First Option – Conduct a clinical study to prove the efficiency or effectiveness 60 mg of Cymbalta once a day (QD) when treating major depressive disorder Although the first option will enable Eli Lilly to serve the pharmaceutical needs of patients who prefer to take medications only once a day, this option can be very costly on the part of the company. Furthermore, only 8% of the physicians would consider dosage as a factor for prescribing a specific antidepressant drug (24). It means that pursuing this option does not necessarily mean that the future market shares nor the company’s sales and profitability would increase by taking this particular option. Second Option – Conduct a clinical trial which aims to allow the company to come up with an entirely new pain indicator for Cymbalta on top of presenting the drug efficacy using 20 to 40 mg of Cymbalta at least two times a day (BID) Eli Lilly is planning to consider associating Cymbalta as a pain indication for either fibromyalgia or DPNP (p. 14). Basically, this option is more favorable as compared to the first and third option. In line with this, developing an entirely new pain indicator for Cymbalta would mean widening the market segment and increasing the potential market size for Eli Lilly. Among the most important attributes considered each time a physician would recommend a specific antidepressant drug include: (1) tolerability (47%), (2) secondary efficacy (18%), (3) primary efficacy (18%), (4) safety (9%), and (5) dosing (8%) (24). In most cases, physicians would refuse to prescribe an antidepressant drug in case it could promote gain weight (62.7%), triggers sexual dysfunction (43.9%), and develop transient psychomotor effects (5.3%) (24). Cymbalta, when taken at least two times a day (BID) at the dosage of 20 to 40 mg has been proven effective particularly in terms of receiving a higher response rate from the patients who have taken the drug (49%), more effective in terms of treating the symptoms of depression as compared to the use of Prozac, a higher rate of safety and tolerability, and significantly low rates of severe side effects (11, 23). Therefore, in the process of presenting the drug efficacy using 20 to 40 mg of Cymbalta at least two times a day (BID), Eli Lilly can save a lot of money from unnecessary and redundant clinical tests. In general, obesity is strongly related to the risks of developing DPNP – a type of “pure pain condition” that is mostly affecting patients with diabetes (14). Within the U.S. population, between 10% to 20% of patients with diabetes are suffering from DPNP (14). On the other hand, fibromyalgia is actually pain that is related to osteoarthritis. Within the U.S. population, roughly 20 million individuals have been diagnosed with osteoarthritis (14). Even though the prospective target market after associating Cymbalta as a pain indication for fibromyalgia is big, Eli Lilly should take into consideration that by doing so, the company will have to compete with other well-known existing pharmaceutical brands that are currently targeting patients with arthritis and osteoarthritis (i.e. Celebrex and Vioxx) (14). Regardless of whether or not Eli Lilly would decide to pursue pain indication for either DPNP or fibromyalgia, this company would definitely end up being able to capture a bigger share in the market. Likewise, the process of pursuing a separate pain indication for Cymbalta would definitely increase its competitive advantage as compared to other MDD drugs. In fact, the only disadvantage associated with this particular option is that Eli Lilly may not be able to encourage 8% of the physicians who prefer to prescribe MDD drugs with a dosage taken only once a day (QD) (24). Third Option – Postpone the NDA submission for several years until option 1 and 2 has been satisfied The third option is the worst among the three options. First of all, delaying the NDA submission for several years could mean a lot of business opportunity loss on the part of Eli Lilly. The close market competitors of Eli Lilly include: (1) TCAs (18.5%), (2) Pfizer’s Zoloft (15.8%), (3) Eli Lilly’s Prozac / Sarafem (15%), (4) GSK’s Paxil (15%), (5) others (i.e. Desyrel, Fluvoxamine, Luvox, Remeron, Remeron Soltab, Serzone, and Trazodone), (6) GSK’s Wellbutrim IR/SR (7%), (7) Forest’s Celexa (6.9%), (8) Wyeth’s Effexor (6.6%), and (9) total combos (i.e. Amitriptyline/Chlordiazepoxide, Etrafon, Etrafon Forte, Etrafon-A, Deprol, Limbitrol, Limbitrol DS, Perphenazine/Amitriptyline, and Triavil) (0.8%) (18). In the process of waiting until option 1 and 2 has been satisfied, Eli Lilly could lose its market shares to other pharmaceutical companies that are also serving the pharmaceutical needs of patients with major depressive disorder. (See Table I – Summary of Pros and Cons of Each Option below) Table I – Summary of Pros and Cons of Each Option Pros Cons 1st Option: Conduct a clinical study to prove the efficiency or effectiveness 60 mg of Cymbalta once a day (QD) when treating major depressive disorder. Satisfy patients who prefer to take medications only once a day. Expensive; Unnecessary cost on the part of the company; Only 8% of physicians are concerned with the dosage. 2nd Option: Conduct a clinical trial which aims to allow the company to come up with an entirely new pain indicator for Cymbalta on top of presenting the drug efficacy using 20 to 40 mg of Cymbalta at least two times a day (BID) Increase the potential market size for Eli Lilly; Widens the market segment for Cymbalta; Increase Cymbalta’s competitive advantage as compared to other MDD drugs; Save a lot of money from unnecessary clinical tests with regards to dosage. Eli Lilly may not be able to encourage 8% of the physicians who prefer to prescribe MDD drugs with a dosage taken only once a day (QD) 3rd Option: Postpone the NDA submission for several years until option 1 and 2 has been satisfied. - n/a - Serious business opportunity loss; Eli Lilly could lose its market shares to other pharmaceutical companies. Recommendations Among the three (3) options, this report strongly recommends that Eli Lilly should select option 2. When deciding on whether or not to pursue pain indication for either DPNP or fibromyalgia, this report strongly recommends that Eli Lilly should choose pain indication for DPNP instead of fibromyalgia. First of all, Vioxx has been marketed for its ability to cure chronic pain associated with osteoarthritis (14). Since there are no other existing pharmaceutical drugs that can effectively treat chronic pain associated with DPNP (14), this report strongly recommends that Eli Lilly should stay focus on finding ways on how the company can associate Cymbalta as the best pharmaceutical drug to treat chronic pain due to DPNP. Furthermore, the FDA has not approved any pharmaceutical drugs that could effectively treat pain associated with DPNP (14). For this reason, pursuing pain indication for DPNP would increase the chances wherein Eli Lilly could receive FDA approval for Cymbalta right after the company has completed the required clinical tests which can prove the drug’s efficacy in its claims. Likewise, this particular marketing strategy could help Eli Lilly increase its chances of being able to capture an entirely new market in the United States. Investment on pharmaceutical R&D is very costly. In fact, a large-scale clinical trial would require at least US$25 million up to a maximum of US$50 million for a 15 to 18 months study (2). Therefore, to protect the financial stability of the company, Eli Lilly should immediately apply for a patent right as soon as Cymbalta has been clinically proven effective in treating both major depressive disorder and chronic pain associated with DPNP. By doing so, this company will be able to prevent other pharmaceutical companies from copying the formula used in the manufacturing of Cymbalta. *** End *** Total Number of Words: 1,750 Reference Ofek, Elie and Ron Laufer. "Eli Lilly: Developing Cymbalta. Harvard Business School. 9-507-044." (2008): pp. 1 - 28. Read More
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