Eli Lilly and company is a pharmaceutical company that was established in 1876 by Colonel Eli Lilly, who had served in the union army during the Civil War. One of the products the company developed includes the antidepressant drug Prozac, which has been a legendary product for the company and has generated billions of dollars since its launch. As Prozac’s patent expiration date approached, thereby allowing the sale of generic versions in the U.S., the company decided to pursue a product to replace Prozac, named Cymbalta. John Kaiser, the marketing director at Eli Lilly and member of a cross-functional R&D team, new anti-depressant team (NAT), has been tasked to lead this effort. Kaiser prepared a presentation about the potential successor, Cymbalta, and convened a meeting with the NAT members to discuss its future potential. The goal of the meeting was to thoroughly analyze and discuss the pros and cons about Cymbalta’s development and strategic opportunities based on the different options of use.
This paper will identify the strategic issues and problems the NAT faced in developing the new product. The paper will then analyze and evaluate the industry and market behavior by using a SWOT analysis. Finally, this paper will offer a set of recommendations based on the surrounding circumstances and options available to the Eli Lilly team.
Identification of the strategic issues and problems:
Eli Lilly and company’s NAT members began the process of searching for a successful replacement to Prozac by looking into the strategic choices, possibilities, and successful launch of a replacement shortly after the expiration of Prozac’s patent. Cymbalta was considered as a viable successor to Prozac because it seemed a) to be as good as or better than existing antidepressants, b) to show no signs of safety precautions or toxicity issues, c) to meet previous unmet patient needs, and d) to show promising signs of development as a product to also treat pain, especially if it did not cause special side effects.
However, when Lilly developed Cymbalta back in the early 1990’s, for the major depressive disorder (MDD) market, the product failed to show satisfactory levels of efficacy for treating MDD in phase 2 trials in 1993. Additionally, Lilly had so little experience in the therapeutic area. Moreover, there were variances in the opinions of Neurologists and Psychiatrists related to the symptoms of pain, such as chronic back pain or recurring headache tied to depression. Those variances could peril the decision making process from the top management. Also, since there were no clear guidelines from the Food and Drug Administration (FDA), for the development of pain indications associated to depression, the likelihood of FDA approval was very slim.
Kaiser and the team also encountered several constraints. The team had to decide how to prioritize the clinical trials for Cymbalta within the range of $25 to $50 million and a time frame of 15 to 18 months to design, enroll patients for trial, and then analyze and document results for the clinical trial. Each study was a major task for the NAT members and the team had the opportunity to submit only one objective to the FDA for marketing approval. On the other hand, since Cymbalta had been tested with twice daily dosages of 20 mg, 30 mg, and 40 mg, NAT members also looked into the option of conducting a new set of clinical trials to establish once-a-day dosage of 60 mg of Cymbalta to treat Major Depressive Disorder (MDD). The new option would provide more expedient dosing for patients and would also put the product on par with the major competitors. Analysis and Evaluation:
The U.S. pharmaceutical industry is complex and dynamic. It’s an industry that is characterized by high-tech research and development (R&D) expenditures and extensive regulation of its products, especially in comparison with other manufacturing sectors. The U.S. Food and Drug Administration (FDA)...