GSK Promoting Collaboration Through Radical Openness
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Case Code: BSTR484 Case Length: 18 Pages Period: 2001-2015 Pub Date: 2015 Teaching Note: Not Available |
Price: Rs.600 Organization: GlaxoSmithKline plc. Industry: Pharmaceutical Countries: US Themes: Radical Openness |
Abstract Case Intro 1 Case Intro 2 Excerpts
Excerpts
Growth Drivers
As per World Health Organization's 18 (WHO) 2015 report, between 1990 and 2013, the life expectancy of men and women had increased by six years and had gone up to 68 years and 73 respectively. Between 2013 and 2018, the world population aged 65 and above would grow faster than any other age segment and contribute about 30% of the total population growth. This demographic change and rise in spending on diagnosis and treatment of chronic.....
Challenges
In addition to the increasing competition, the rising expectations of customers, lack of talent, development of alternative therapies, expiring patents, rising Research and Development (R&D) costs, and falling scientific productivity were the major concerns for the industry. The scientific productivity of the industry had not grown much in the period 2000 to 2011. It was further dented by the rising costs of molecule development....
About GSK
GSK, a research driven global healthcare company, was based in London, U.K. It came into existence in January 2001 after the merger between Glaxo Wellcome and SmithKline Beecham. After the merger, GSK became the world’s leading pharmaceutical with combined sales of £15 billion and about a 7.3% share in the global pharmaceutical industry....
Radical Openness @ GSK
Experts opined openness was started at GSK in 2004 when court ordered the company to share its clinical trials data. In June 2004, Eliot Spitzer (Spitzer), the then Attorney General of New York State, sued GSK for misleading the public about Paxil, an antidepressant drug, charging the company with hiding the negative results of studies conducted on the drug and disclosing only the most favorable results. Later, in August 25, 2004, GSK settled the lawsuit and paid US$2.5 million as a part of the settlement.....
The Criticism
Many industry observers and NGOs appreciated the changes in GSK's policies. However, they were not sure how much and how far these would really help the people suffering from diseases because even at the discounted price, GSK's drugs were out of reach for patients in LDCs. Some experts were of the view that the price cut was nothing but a part of the company's market segmentation strategy and differential pricing strategy and was not new to global pharma companies. These companies used different prices for different markets based on the market's ability to pay and the demand....
The Outcomes
Under Witty's leadership, GSK had come a long way in becoming more open and transparent. This was due to the various steps it had taken toward radical openness. These efforts helped GSK to lead the bi-yearly 'Access to Medicine Index' since the launch of this index in 2008. GSK got its first success through collaboration when it developed the malaria vaccine RTS,S, or MosquirixTM in partnership with PATH Malaria Vaccine Initiative (PATH MVI). This was the first malaria candidate vaccine of which the European Medicines Agency (EMA) had a positive opinion....
Next Level of Openness
GSK had extended radical openness to its sales and marketing departments also. To bring openness in sales and marketing practices, GSK decided that by 2016, it would completely stop the payments it had been making to healthcare professionals (HCPs) to prescribe its drugs and medicine. The company decided to use different methods such as the digital system and real time information to provide information about its products to HCPs. To further boost transparency, GSK planned to add the complete data of all its clinical studies carried out since 2000 in the online system by 2017.....
Exhibits
Exhibit I: Value Chain of the Pharmaceutical Industry
Exhibit II: Growing Revenue of Global Pharmaceutical Industry (in US$ billions)
Exhibit III: Pharmaceutical Industry's Scientific Productivity
Exhibit IV: The Cost of Creating a New Drug
Exhibit V: Three Years Selected Financial Information of GSK
Exhibit VI: GSK's Radical Openness Steps at a Glance
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