Session 5: Fundamentals of strategy: Value chain analysis in the pharmaceutical industry

Question 1

The Pharmaceutical Value Chain – From
Research & Development to the Market

Answer 1

1. Disease focus - Target Identification, Lead Generation & Optimization Compound, Design & Screening
2. Preclinical investigations - Formulation, Clinical Phase I, Clinical Phase II
3. Clinical phase III - Submission & approval,
   Prescription Pharmacovigilance, Phase IV

Question 2

Tool to evaluate whether a firm has resources and capabilities which can serve as a basis for competitive advantage

Answer 2

Financial resources
Material resources
Human resources
Corporate culture
Reputation
Flight operations

Question 3

Drug Development Process is complex and expensive why?

Answer 3

1. drug research - 10000 test compounds
2. preclinical - test on animals and lab
3. Clinical trials - Phase iI 20-100 healthy volunteers, Phase II: 100-500 - safety dosing, Phase III: 1000 -10000 patients, efficacy and adverse effects
4. Evaluation/approval - 2 years
5. Phase IV studies - 2 years

more than a billion dollars to make successful drug and takes 12 to 15 years

Question 4

The pharmaceutical value chain –
Industry background advantages for small firms or biotech and pharma companies

Answer 4

1. Advantages for small and innovative firms - R&D and tests
2. Advantages for Big Pharma - approval, mass production of active ingredients, drug fabrication, marketing & sales

Question 5

Changes in the pharmaceutical/
biotechnology industry value chaing in regards to the old and new paradigm shift

Answer 5

Review slide 24 session 5

Question 6

The New Drug Development Process
leads to a deconstruction of the
pharma value chain

Answer 6

review slide 25