Porter's Generic Strategies Framework
Marketing Strategies in the
Competition between
Branded and Generic
Antibiotics (A)
Clamoxyl in 1996
02/2007-5057
This case was prepared by Pierre Chandon, Assistant Professor of Marketing at INSEAD, Olivier Kovarski, Professor of Marketing at ESC Normandie, Jacques Lendrevie, Professor of Marketing at HEC, Sarah Spargo, Research
Associate at INSEAD, and Marc Vanhuele, Associate Professor of Marketing at HEC, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. We thank Pierre
Chahwakilian from GSK for his help and support.
Copyright © 2003 INSEAD
N.B. PLEASE NOTE THAT DETAILS OF ORDERING INSEAD CASES ARE FOUND ON THE BACK COVER. COPIES MAY NOT BE MADE WITHOUT PERMISSION.
Paris, October 10, 1996
Pierre Chahwakilian, Marketing Director of SmithKline Beecham laboratories (SB) for
France, was re-reading a letter sent in July 1996 to all French doctors by the CNAM, the
French health management governing body (see Exhibit 1). The letter urged doctors to protect the cherished French social security system by prescribing generic drugs instead of the more expensive—but therapeutically equivalent—branded drugs. Clamoxyl, the original amoxicillin antibiotic and one of SB’s ‘jewel’ drugs, was specifically targeted because its substitution by generic amoxicillins could save up to €26.5 million for the French social security system, more than any other drug.
Clamoxyl was no ordinary drug. It was the first amoxicillin (a type of antibiotic) introduced to the market (in 1974) and, despite losing its patent in 1980, was still the highest selling amoxicillin in France. Virtually every doctor in France knew and prescribed Clamoxyl, many developing an emotional attachment to a brand that had helped them cure countless respiratory infections for adults and children over the years.
Yet sales of Clamoxyl had dropped by 30% in the three months since the CNAM letter had
been
Competition between
Branded and Generic
Antibiotics (A)
Clamoxyl in 1996
02/2007-5057
This case was prepared by Pierre Chandon, Assistant Professor of Marketing at INSEAD, Olivier Kovarski, Professor of Marketing at ESC Normandie, Jacques Lendrevie, Professor of Marketing at HEC, Sarah Spargo, Research
Associate at INSEAD, and Marc Vanhuele, Associate Professor of Marketing at HEC, as the basis for class discussion rather than to illustrate either effective or ineffective handling of an administrative situation. We thank Pierre
Chahwakilian from GSK for his help and support.
Copyright © 2003 INSEAD
N.B. PLEASE NOTE THAT DETAILS OF ORDERING INSEAD CASES ARE FOUND ON THE BACK COVER. COPIES MAY NOT BE MADE WITHOUT PERMISSION.
Paris, October 10, 1996
Pierre Chahwakilian, Marketing Director of SmithKline Beecham laboratories (SB) for
France, was re-reading a letter sent in July 1996 to all French doctors by the CNAM, the
French health management governing body (see Exhibit 1). The letter urged doctors to protect the cherished French social security system by prescribing generic drugs instead of the more expensive—but therapeutically equivalent—branded drugs. Clamoxyl, the original amoxicillin antibiotic and one of SB’s ‘jewel’ drugs, was specifically targeted because its substitution by generic amoxicillins could save up to €26.5 million for the French social security system, more than any other drug.
Clamoxyl was no ordinary drug. It was the first amoxicillin (a type of antibiotic) introduced to the market (in 1974) and, despite losing its patent in 1980, was still the highest selling amoxicillin in France. Virtually every doctor in France knew and prescribed Clamoxyl, many developing an emotional attachment to a brand that had helped them cure countless respiratory infections for adults and children over the years.
Yet sales of Clamoxyl had dropped by 30% in the three months since the CNAM letter had
been