Glaxo Wellcome Mini Case

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  • Topic: GlaxoSmithKline, Sumatriptan, Migraine
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Glaxo Wellcome Inc.
Mini-case Report
April 2, 2007


Executive Summary

Glaxo Wellcome Inc’s primary business is to market prescription products to physicians and health care providers. One of the top three pharmaceutical firms in the world, Glaxo Wellcome Inc. held about 4 percent of the worldwide prescription pharmaceutical market. The U.K. based company was formed in 1995 when Glaxo Pharmaceuticals acquired Burroughs Wellcome. While the company is based in the U.K., the U.S. market represented approximately 40 percent of worldwide sales while the U.K. produced about seven percent. As of 1997 Glaxo Wellcome Inc. had 22 local operating companies in nine countries including the U.S. Because of the harsh requirements of the Food and Drug administration (FDA) most products are introduced in one of the other eight countries before seeking U.S. approval. Migraine medicine is a primary growth area for Glaxo. The company was first to manufacture and market triptans, a new class of prescription migraine medicine. Triptans were launched in 1993 and work specifically on the 5HT-1 receptor sites believed to be the primary cause of migraine headaches. Imitrex was the first triptan produced and sold by Glaxo in the U.S. The concern now is how the company should best market the second-generation triptan by the company, Amerge. This will be the first time a pharmaceutical company has two prescription triptans available on the market. Problem Statement and Key Issues

Glaxo Wellcome’s U.S. division faces the task of determining a positioning strategy for their new triptan, Amerge, to increase total market share in the currently underdeveloped migraine market. Not only should the marketing decisions combat pressure from competitors with comparable products, but also the pharmaceutical marketers must elevate the importance of the new product’s placement on the formularies of managed care plans. Additionally, the development of a direct-to-consumer (DTC) advertising campaign that is informative and persuasive, without offending the medical community, must be included as a part of the positioning strategy. SWOT Anaylsis for Glaxo Wellcome Inc.

• Seen as a reliable prescription drug manufacturer, therefore has a positive reputation • Global company with 4% of the worldwide prescription pharmaceutical market • Company has a strong balance sheet and growth potential • Imitrex dominates the migraine market as the first and only triptan available from 1995-1998


• Does not have a clear marketing strategy for the triptans • Largely focused on competitor activity instead of growing market share • FDA regulations create long approval periods
• The recent business combination of Glaxo Pharmaceuticals and Burroughs Wellcome in 1995 has created organizational challenges


• 90% of the migraine market is underdeveloped
• More marketing options include the ability to directly contact consumers as well as doctors and hospitals (in the U.S. division) • Ability to market line extensions for new products such as Amerge • Difficult for new competitors to enter the market because of R&D and approval processes


• Non-acceptance as a formulary of managed care plans
• Competitors’ products, such as Zomig, released before and out-performing Amerge • Changes in healthcare legislation, including Medicaid and Medicare

Alternative Courses of Action

1. Replacement Strategy: the U.K. division chose this plan of action, ceasing all promotion of Imigran (U.K. name brand for Imitrex) and positioning Naramig (the U.K. brand name for Amerge) as the recommended drug to start treatment of migraine patients. The replacement strategy results met Glaxo U.K. expectations, but damaged the growth of Imigran and did not prevent Zomig from successfully entering the market. Furthermore, the U.K. market has...
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