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Research Details
AstraZeneca, Prilosec, and Nexium: Strategic Challenges in the Launch of a Second-Generation Drug
Abstract
Tom McKillop, CEO of AstraZeneca, faced the classic quandary of large pharmaceutical firms. Within the year, the firm's patent for Prilosec (active ingredient omeprazole) was expiring. Prilosec was a US$6.2 billion/year blockbuster that revolutionized the treatment of chronic gastro-esophageal reflux disorders (GERD). Severe cost-based competition from generic drug manufacturers was, however, inevitable. Patent expirations were nothing new for the US$15.8 billion in revenues drug firm. AstraZeneca had Nexium, an improvement on the original Prilosec molecule, in the pipeline. Ideally, it would like to move brand-loyal Prilosec customers to Nexium. Additionally, the company had the opportunity to introduce its own version of generic omeprazole, hence becoming the first mover in the generic segment, and/or introduce an over-the-counter (OTC) version of omeprazole. Tactically, AstraZeneca would like to use regulatory incentives and intellectual property rights to strengthen its competitive position. How could the company use its entire portfolio of intellectual properties—including patents and trademarks—to actively manage the priced-based competition and achieve a revenue growth strategy in the GERD market? Use with Case Supplement #5-404-753 (KEL335).
Type
Case
Author(s)
James Gerard Conley, Robert Wolcott, Eric Wong
Date Published
01/01/2006
Discipline
Management;Strategy
Key Concepts
Intellectual Property, Regulation, Patents, Innovation, Trademarks
Citations
Conley, James Gerard, Robert Wolcott, and Eric Wong. AstraZeneca, Prilosec, and Nexium: Strategic Challenges in the Launch of a Second-Generation Drug. Case 5-404-752 (KEL334).
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