Pharmaceutical Industry in the Global Economy - Case Study Example

THE BRISTOL-MYERS SQUIBB COMPANY Introduction Bristol-Myers Squibb is an international biopharmaceutical company that focuses on a mission to determine, expand and bring innovative medicines that help patients overcome the severe diseases such as diabetes, hepatitis, HIV/AIDS, psychiatric disorders, cardiovascular disease and cancer (Bristol-Myers Squibb, 2010). The company seeks to bridge the gaps in health care and address health disparities and its foundation focuses to fight HIV/AIDS in Africa, hepatitis in Asia, type 2 diabetes and serious mental illness in the U.S and cancer in East and Central Europe. The company is also recognized as a world leader in environmental sustainability through integrating pollution controls, comprehensive energy management, and other practices that reduce environmental impacts (Bristol-Myers Squibb, 2014). The BMS foundation is to encourage universal health equity by mobilizing communities to fight diseases. The changes Bristol-Myers Squibb has gone through from 2007 to 2013 The Bristol-Myers Squibb went through an incredibly planned change. It has acquired important new companies and spinning off others. It has developed into a major pharmaceutical company (Pearce & Robinson, 2015). When the company hired the CEO James Cornelius a strategy called the “string of pearls” was formed. The strategy focused on Bristol restocking its product pipeline by acquiring small and medium-sized businesses that had promising products in development. Bristol has gone beyond its core disease areas to new formulations like the fibrosis and congestive heart failure for deal making. It entered into strategic alliance agreements with Pfizer and AstraZeneca to co-commercialize and co-develop investigational compounds. The agreements with AstraZeneca involved the compounds that are used to treat diabetes while that of the Pfizer focused on anticoagulant that was used for the treatment and prevention of venous and arterial thrombotic conditions (Bristol-Myers Squibb, 2014). The Bristol Company purchased Kosan Biosciences, a company that is cancer therapeutic, which provided the classes of anticancer agents in 2008. It also acquired a Medarex in 2009 which expanded the company’s oncology pipeline and gave it full rights to immunotherapy that studied prostate cancer, lung cancer, and melanoma (Pearce & Robinson, 2015). In 2010, the company purchased ZymoGenetics which gave it the full rights to investigate compounds for the hepatitis-C virus and it was the first time it secured an existing product called Recothrom that was used to control bleeding during surgery. In 2011, Bristol acquired Amira and Ambrx Pharmaceuticals Inc. The Amira developed pharmaceuticals for fibrosis hence complementing the company’s therapeutic research efforts while the Ambrx produced drugs for diabetes and congestive heart failure (Bristol-Myers Squibb, 2014). In 2012, Bristol started manufacturing generic versions that lowered the price of the blood thinner drug called Plavix. It is in 2012 that the company lost patent protection on its Plavix drug resulting in of over $3.5billion in annual sales. Furthermore, the company signed an agreement with Reckitt Benckiser in the year 2013. The terms of the alliance this time gave Reckitt all the rights to sell, distribute, and market seven different products including Dermodex and Tempra for Bristol. The collaboration made Bristol gain market share in Latin American markets like Mexico and Brazil (Pearce & Robinson, 2015). The company intensified its search for ways to replace the lost sales by looking into the purchase of Biogen Idec Inc. that was a producer of neurological disease medication for multiple sclerosis. It also attempted to acquire Shire PLC whose products included medication for attention-deficit disorder and hyperactivity disorder. These two companies had a combined market value of over $57 billion that almost equalized the size of Bristol (Bristol-Myers Squibb, 2014). In the same year, it expanded its relationship with Simcere Pharmaceutical group in China (Pearce & Robinson, 2015). It also partnered with Samsung Biologics, a Korean based company on a 10-year agreement to manufacture a commercial antibody cancer drug (Bristol-Myers Squibb, 2014). The deal increased Bristol’s biologic manufacturing capacity and ensured a long-term adequate supply of the antibody. As a result, these acquisitions enabled Bristol Company to reorganize how it identified, contacted, secured and managed the relationships it had with third parties. They also made the company modernize its relationships. These strategies thrived well for all the seven years. They made Bristol Company to be a more focused organization. The company also focused on the development and commercialized its products both within and through partnerships (Bristol-Myers Squibb, 2013). The changes also led to an overall upward trend. The Bristol’s financial results improved and its stock steadily improved. Presently, the company is evolving into a diversified specialty Biopharma. It is driving results and making a difference in the lives of the people. With the continued changes that pose both the opportunities and threats, Bristol has successfully evolved and adapted (Bristol-Myers Squibb, 2014). The strategic resilience has allowed the company to discover, develop and deliver innovative medicines that have helped the patients to prevail over the current serious diseases. It is also able to keep pace with the ability to address the critical issues needs of the patients and creating extraordinary possibilities for making a difference in their future lives. In addition, the Bristol-Myers has realigned its finance, commercial and manufacturing organizations to support its evolution to a specialty business model. In order to address the unmet requirements of the patients, the company developed R&D strategic focus. It also developed a pipeline, product portfolio, and technology platforms (Bristol-Myers Squibb, 2013). These made it to position itself for sustainable growth. It has recently increased its commitment to immune-oncology that is a new field with the aim of improving the survival expectations and the way patients are living with cancer. It has also currently expanded its efforts in targeted oncology agents, for instance, stroke prevention, hepatitis C and HIV/AIDS. The comparison of Bristol-Myers Squibb and other Pharmaceutical companies The Bristol Company has a strong legacy of innovation. Its success as a biopharma leader has been fueled by its pioneering approach. Its collaborations, acquisitions, agreements, and alliances have helped it to balance its portfolio and build its cluster of expertise in key therapeutic areas where the unmet medical needs are so great. Bristol-Myers Squibb is the only company to achieve the number one ranking three times, including 2009 and 2012 and has ranked among the top 10 each of the last six years. It is first among health care companies on Corporate Responsibility magazine’s 2014 list of the 100 Best Corporate Citizens. The company is unique as compared to the other pharmaceutical firms because of its focus on acquiring skilled people, great science, potential products and also marketing products in some areas (Bristol-Myers Squibb, 2013). Therefore, it has positioned itself as a strong partner in the biotech circles by demonstrating its ability to nurture innovation, assets, and talent. It is the Bristol’s commitment to patients that makes it unique. Also, its focus on finding innovative medicine to combat diseases is a plus. It has been hailed as one of the best companies for working mothers, a great place to work for scientists and an acknowledged industry leader in environment, health, and safety (Mizuha Industry Focus, 2014). I would wish to invest in this company because it is among the most admired companies within the pharmaceutical industry globally. Secondly, it is also among the top companies recognized as the best place to work. Additionally, it has been identified as a national leader and an innovator hence recognized in the business leadership category. It also helps in building the community because there is continued growth thus sustainable development. How the influence of ongoing pressure on the economy affects Bristol-Myers Squibb’s future The pharmaceutical industries are facing increased pressure from all the stakeholders that are related to the reimbursement and coverage of the new and existing therapies. The government, consumers and the players also continue to pressure the industry to lower the costs regardless of the outcome of the reforms (Mizuha Industry Focus, 2014). This makes the Bristol Company to be uncertain of the future regarding their products and services. The economic challenges affect the compensation practices. Recently, the Patient Protection and Affordable Care Act has been a considerable topic of concern for the pharma­ceutical industry, as it will directly impact and challenge the current reim­bursement landscape. The industry faces top-line pressure from patent expirations on many top-selling drugs, as well as negative foreign exchange. This has negatively affected industry profitability. For instance, there is regulatory pressure on drug pricing hence affecting Bristol’s income. This will favor the companies with rich generic pipelines (Bristol-Myers Squibb, 2013). The changes in the market affect the pharmaceutical industry. These changes are dynamic for instance; the shift from chemical-based small molecules to biology-based large molecules like antibodies and protein has shaped new opportunities in the industry. The strategic recommendations for the Bristol-Myers Company Diversity is vital for the Bristol Company. It has a team of diverse employees; therefore, inclusive culture is important for its innovations and successful execution of its Biopharma business strategy (David & Greblov, 2005). At Bristol, the culture of inclusion enables the company to create a work environment where all are free to contribute fully and reach their maximum potential. The company's workforce diversity efforts focus on addressing health disparities on a global scale. Apart from focusing on diversity, the company must also deal with competition from within and without. It should also manage within a world of price controls that dictate a wide range of prices from place to place (David, & Greblov, 2005). Similarly, the company must be constantly on guard for patent violations and seek legal protection in new and growing global markets. Finally, they must manage their product pipelines so that patent expirations do not leave them without protection for their investment. Drug portfolio management is one of the most important determinants of the long-term prosperity of research-oriented pharmaceutical companies. It takes an extremely long time to develop a new drug, and only a very small portion of all projects is successful (David & Greblov, 2005). Projects that the company starts today will determine its financial performance 10-15 years later. A careful planning of R&D project is very important for lasting stability of the company. Developing countries contain a significant potential for further expansion of pharmaceutical industry in the future hence that should be Bristol’s other future opportunities to exploit. References Bristol-Myers Squibb Company, (2015). Research and Development: A Focus on Unmet Medical Needs. Retrieved from Bristol-Myers Squibb. (2010). Company Overview. Delivering our Commitments. Bristol-Myers Squibb. (2013). Company Overview. The Frontiers of Science. Developing New Possibilities for Patients. Bristol-Myers Squibb. (2014). Company overview. Evolving to a Diversified Specialty Biopharma Company. Davidson, L & Greblov, G., (2005). The Pharmaceutical Industry in the Global Economy. Indiana University Kelley School of Business Bloomington, Indiana FierceBiotech, (2015). Bristol-Myers Squibb Company Outlines Strategy and Productivity Transformation. The Biotech Industry’s Daily Monitor. Mizuho Industry Focus. (2014). Restructuring the Pharmaceutical Industry. Global Corporate Advisory Americas. Pearce, J., A., & Robinson, R., B. (2015). Strategic Management, Planning for Domestic & Global Competition, Case 1 “Bristol-Myers Squibb’s growth through addition, Subtraction and Sharing”, Read More