Xigris case study
Question 1: Should Brandon Meyers recommend a delay in the launch? Justify your decision (by case facts and data)
Brandon Meyer should recommend a delay in the launch. Although there are several downsides to a delay, the pros greatly outweigh the costs.
As mentioned in the case, Xigris took 20 years and millions and dollars to come up with. The time and effort invested in the creation of the drug demands that the stage is set properly for its launch, to allow Eli Lilly to reap the maximum benefits from it. While a timely launch would benefit Eli Lilly in the short run such as providing higher investor confidence, a slipshod launch could hurt Eli Lilly’s profits in the long run, such as setting a sub-optimal pricing for Xigris.
In addition, Eli Lilly has no approved competition at the moment and are protected by patent. As such, a three to six month delay would not cause them to lose out in first mover advantage.
Question 2: What are advantages and disadvantages of a delay?
There are several advantages to a delay. Firstly, it would allow them to revise their pricing strategy. With the FDA limiting their market to adult patients with severe sipsis, Eli Lilly should consider increasing the price of their drug to reap back their high cost of investments.
Secondly, it can allow them to re-explore their distribution channels. A significant percentage of patients who died from sepsis did so within a week of contracting the disease. As such, demands for the drug are likely to be urgent. As such, they may consider using Syncor, which is an emergency-response delivery service. In addition, this can reduce the need for hospitals to stock up on the expensive drug.
However, there are disadvantages as well. The pharmaceutical industry is extremely competitive. A delay may result in a loss of investor confidence which could cost Eli Lilly to lose out to competitors.
Brandon Meyer should recommend a delay in the launch. Although there are several downsides to a delay, the pros greatly outweigh the costs.
As mentioned in the case, Xigris took 20 years and millions and dollars to come up with. The time and effort invested in the creation of the drug demands that the stage is set properly for its launch, to allow Eli Lilly to reap the maximum benefits from it. While a timely launch would benefit Eli Lilly in the short run such as providing higher investor confidence, a slipshod launch could hurt Eli Lilly’s profits in the long run, such as setting a sub-optimal pricing for Xigris.
In addition, Eli Lilly has no approved competition at the moment and are protected by patent. As such, a three to six month delay would not cause them to lose out in first mover advantage.
Question 2: What are advantages and disadvantages of a delay?
There are several advantages to a delay. Firstly, it would allow them to revise their pricing strategy. With the FDA limiting their market to adult patients with severe sipsis, Eli Lilly should consider increasing the price of their drug to reap back their high cost of investments.
Secondly, it can allow them to re-explore their distribution channels. A significant percentage of patients who died from sepsis did so within a week of contracting the disease. As such, demands for the drug are likely to be urgent. As such, they may consider using Syncor, which is an emergency-response delivery service. In addition, this can reduce the need for hospitals to stock up on the expensive drug.
However, there are disadvantages as well. The pharmaceutical industry is extremely competitive. A delay may result in a loss of investor confidence which could cost Eli Lilly to lose out to competitors.