Abstract

This case is about one of the world's top pharmaceutical companies, AstraZeneca Plc.'s (AstraZeneca) strategic defense of its market leadership in the Gastrointestinal (GI) drugs market. The company had dominated the GI drugs market, more specifically the acid-related disorder market, ever since it launched the drug Omeprazole (a Proton Pump Inhibitor) which was marketed as Losec worldwide and Prilosec in the US. Losec/Prilosec became one of the world's top best selling drugs in the 1990s. As the drug was scheduled to lose its patent protection in 2001, the company put together a cross-functional team in 1995 to formulate a strategy that would ensure that the company did not lose its market share due to the patent expiry. This resulted in the company coming out with a new drug (Esomeprazole) that was but a mirror image of Omeprazole. AstraZeneca branded the new drug as Nexium and started efforts to switch the existing sales of Losec/Prilosec to Nexium. The strategy proved to be very successful as AstraZeneca was able to maintain the leadership position in the GI drugs market even after the patent expiry of its blockbuster drug. As of 2006, Nexium was ranked second among world's largest selling drugs, and its marketing had won AstraZeneca and its ad agencies a number of awards and recognition in marketing. However, AstraZeneca's strategy also came in for strong criticism with many critics contending that the success of Nexium was a triumph of marketing over science. The company also faced several lawsuits regarding its strategy for Nexium.

Learning Objectives

The case is structured to achieve the following Learning Objectives:

• Understand the issues and challenges faced by market leaders in a particular segment in maintaining its leadership position
• Understand the issues and challenges faced by companies in managing the product lifecycle (PLC) of the drug with special emphasis on the defence strategy against multiple cost-based competitors
• Understand the marketing and branding initiatives adopted by AstraZeneca for Nexium
• Understand the ethical issues related to marketing and promotion of a drug.

Keywords

Market leader strategies, Sandwich strategy, Intellectual property management, Defense strategy, Product Lifecycle management strategy, Shark fin curve, e-detailing, Branding, Ethics, AstraZeneca, Marketing, Prilosec, Nexium, Procter & Gamble, Pharmaceutical, Marketing