El-Lilly And Company: The Standard Gravurexa Case

Ely Lilly and Company
El- Lilly: A pharmaceutical company was founded by a 38 year-old pharmacist and El lilly in May 1876, it was founded in Indianapolis, USA. By opening the door to a small laboratory. Currently it has its headquarter in Indianapolis Indiana, USA, with 38,000 employees worldwide. El-lilly focuses on meeting some of the world’s most urgent medical needs, in the areas of oncology, cardiovascular disease, diabetes, critical care, neuroscience, men’s health and musculoskeletal. El-Lilly has competitive advantage indulging world class scientist in its research and development to produce highest quality of medicine that would solve the world medical need on the areas of it focuses. Profitability by net income is $(mill) 4,088.6
and Market share is 0,03% Lilly focuses on innovation-driven strategies. They choose to remain independent. Their goal is to deliver a flow of new products at lower costs. They are one of the most productive research and development organizations, R&D also being one of their main focuses. Their strategy seems to be rather unclear, they still see their key to success as ”clear”. Their strategy revolves around the fact that they can deliver innovative products at a higher rate with lower costs, and continually increasing the organizations productivity and flexibility. They also aim to be more sustainable, creating a good image for their organization. Their success will stem from their comparative advantage in having one of the most efficient research and development teams, with a plan to launch two medicines per year starting from 2013. They introduced the Lillytab which is a blog provided to exchange information amongst the company and stakeholders in general. This allows them to be closer to consumers and policy makers. They also tend to keep a strong cash-flow to constantly supply the research and development section. In other words, Global growth with cost reduction. Lilly also plan to expand into China and have a strategic partnership with a Chinese manufacturer, Novast Laboratories. They intend to combine the strenghts of both companies, Lilly´s expertise in innovation, commercialization and operations with Novast´s strengths in product development and quality manufacturing. We think that the strategies chosen have worked for the company. The strategies focus on organizational development and expansions into different global areas. They intend to increase their cash flow which will be invested into the research and development sector. With this investment, they are planning to produce two new products yearly. They also give money to charities and relief-programs. Money to charities is good for two reason; people who need charity come from countries in which diseases are quite common, so this could be an indirect expansion plan. The second reason is that it’s an action that is seen positively to the public eye. This way, they increase trust amongst stakeholders and create a positive brand for themselves. This is important because a company must operate on ethical grounds. The expansion into China seems like a great opportunity to increase market share and profitability by combining the strengths of both companies. They can create innovative

products with good quality, strengthening their global comparative advantage.
With this cooperation, they gain strong alliances with different companies. The two main ethical issues in the last years consist in two court cases: the first one is the Standard Gravure shooting and the second one is the Zyprexa case. The Standard Gravure shooting involved Joe Wesbecker, a pressman suffering of mental illness, who entered his former workplace and murdered 8 people, before killing himself. Since it was verified that the murder was under the effect of Prozac during the fact, the relatives of the victims sued Eli Lilly and Company. It was the first of 160 cases pending against Prozac, which represented almost one third of all Lilly’s sales. Lilly won the case but was accused by the judge to have agreed the development of the process with the lawyers from the other side. Surprisingly, Prozac’s sales and Lilly’s credibility were not seriously damaged by the incident. Lilly was also sued and pleaded guilty for hiding some collateral effects of the drug Zyprexa, which caused diabetes. The company was established to pay $ 1.42bilion. The only way to address these issues is to see if any future problems occur, and tackle them when they do. They should be penalized if some of the side effects are hidden or if something goes wrong, maybe due to high dosage or the wrong substance used. For now, it seems that Lilly is looking at things from a business perspective; it seems more profitable to be honest with each product developed and not to hide any side effects, because in the long-run it will be in their favor. Lilly is trying to build strong relationships with customers and intend to create trust from the government, stakeholders and from the population. If these negative occurrences happen frequently, there should be some sort of court ruling, maybe to put an end to testing and make the company limited to the sales of already-tested products. This way, the company could continue
to sell but would be limited to testing. The Company has never had any kind of environmental problem. On their official website, an entire section is dedicated to environmental sustainability which is actually one of the main focuses of the company. The company achieved good results in the last years, decreasing the amount of natural resources used and improving in energy efficiency. In 2010 it was listed as the 58th greenest U.S. Company. There aren´t many issues to address concerning the environment when it comes to Lilly, they try and be environmentally efficient and sustainable when producing their products. One could say that Lilly has a competitive advantage in terms of environmental efficiency. This gives trust to them from Governments and stakeholders. Lilly stands responsible when it concerns the environment, they have a research team involved in the practices they use. They have a lot information on their website concerning their practices, development and sustainability; the environment being one of their main focuses. Lilly is a global company and, in order to be successful, it needs to act keeping in mind the needs of the whole world. Lilly’s strategy consists in finding a meeting point between what they can do best and what world society needs. It is important for the company to discover and develop innovative medicines in order to improve the quality and to reduce the cost of health care. Lilly is also working in order to expand access to medicine collaborating with governments and trying to influence policies. In 2010 LillyPad was launched. It is a blog which focuses on public policy issues, and strengthens mutual trust between the company and stakeholders. The Lillypad is a great way to tackle issues and to keep a good flow of communication between different parties. With this blog, they can address issues when needed and inform the public of future developments and progresses. They also gave high charity to people in need, giving more than 700$ million in contributions.

Lilly have many programs in which they help people in need; they have the U.S. patientassistance programs, Lilly Global Giving, Connecting Hearts Abroad and Global Day of Service. All these programs are used to help less fortunate people, with the main aim in helping people that are in need. They have global help programs and disaster-relief efforts. With this, one can see that they are globally and socially caring and responsible.

Testing 1,2,3. We personally think that adults are allowed to make their own decisions when signing up to be tested on, in this case the choice to become a lab rat. Being an adult, in the world we live in, means that you are allowed to make your own decisions (In most cases), so if somebody is interested in being tested on, that should be their choice. Lilly only give the option, the people who sign up have to be aware of their choice and possible consequence. We think that it’s not directly Lilly’s responsibility when people decide to sign up for these experiments. Homeless and/or alcoholic people make their own choice when signing up for these experiments. There are many ways the government can help these people in need, rather than letting them turn to experimenting on as a means for money. It may be seen as them taking advantage of these peoples situation; but we doubt that Lilly directly targets these types of people. If people want to sign up, they sign up. Of course, these people tend to sign up more because they are need of money. There could be a moral obligation about Lilly’s case in general, but there is always a moral case when it comes to experimenting, how else would we know if something works? It is a tricky one; one could say it is for the benefit of the future, others would say it’s not morally correct to have human test subjects. It is hard to say where to stop when it comes to testing on. On one side of the coin it is seen as immoral due to the fact that people are being tested on, but it can also be seen as the right thing to do since they could find cures for future illnesses. One could say it is for the greater good. As mentioned, even if a drug is the cause of death, it still gives them the opportunity to develop the drug in a safe way and still cure future sicknesses. Whenever it concerns experimentation, people always question the morality of the experiments, even when it comes to testing on animals. We think that people should be compensated for their help, especially if something goes wrong. If Lilly are willing to test on people, they must be willing to take the consequences. If something goes wrong on a test subject, Lilly must be prepared to be penalized in some way. It really is a tricky situation; it is hard to draw the line on the matter. Reflecting on the side effects of Zyprexa, Lilly should be penalized for not having mentioned the side effects that came with the drug. Incidents like these are reason for mistrust when concerning the company; this gives reason to view the organization operating with immoral intentions.

Filippo Massari, Ian O’Donoghue, Chinedu Ekemba