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and fund-redistribution mechanisms will benefit pharmaceutical
firms, allowing them to be more agile and responsive, rather
than committing resources or even draining funds.
Generic Alliances
Alliances with generics companies can have other benefits. In
From Fight to Flight
western markets, many prescription generics are becoming
commodity items that will be on a consumer’s regular shopping list.
For decades, travelling by aeroplane was a high-end option.
As with the regular household grocery shopping, people needing to
It was expensive, but also luxurious. As the idea of flight fill prescriptions will not want to visit many different stores to get
became accepted and barriers to entry fell, the option of
the individual best deals for each of their drugs and would prefer to
flying became open to people with more modest means.
The established carriers refused to lower ticket prices or
pick them all up at once, whether branded or generic. Therefore, it
change their model, so a new breed of airline operator behoves a pharma to see generics as complementary rather than
filled the gap.
competitive. By integrating with the whole healthcare ecosystem,
Budget airlines offered no-frills travel, stripping away the
pharma can better understand consumer habits and get closer to
luxuries to leave the bare minimum: affordable flights. The their patients (see ‘Leveraging Channels’ overleaf).
budget airlines understood what their customers wanted and
what they were willing to pay for. The concept took off with
Southwest Airlines in the US in the 1970s; the model was
Outside of the domestic market, working with generics
copied by many others, including Ryanair in Europe in the
manufacturers is one way to gain access to new international
early 1990s and AirAsia in 1996. Today these airlines
flourish, to the extent that they have taken passengers from
markets. Emerging economies, at the early phase of adoption of
the high-end carriers, eating into what had been considered
western medicines, are highly price-sensitive. The
a precious market. Traditional airlines' attempts to start their
pharmaceutical companies that first establish a base in these
own budget airlines, such as Delta Express (Delta Air Lines),
Ted (United Airlines) and Go (British Airways), have had
areas are either local firms that have started by manufacturing
limited success. Most of the traditional airlines found they low cost off-patent pharmaceuticals or western generics
could neither block these carriers nor compete with them;
manufacturers. These companies will have done the hard work
they had to accept them and try new avenues of innovation.
One such strategy is Star Alliance, which is a partnership of
setting up new sites, working within local customs,
24 airlines across the world working as one organisation to understanding the regulations, connecting with the government
facilitate passengers' journeys.
and/or ministry of health, building networks of suppliers and
This study can be seen as a parallel to the pharmaceutical
partners and developing channels to market.
world. Pharma can learn from generic manufacturers, which
are doing a good job of giving healthcare stakeholders what
Such firms may produce generics that at home could be
they want: effective, lower-cost therapeutics. There is no need
to compete; it is a two-way process: established companies
considered competitive, but in these regions they are in effect
need to meet stakeholder expectations, while generic
the market leaders, and have a lot of important knowledge and
companies need to improve their offering as consumers start
expertise. For a brand pharmaceutical manufacturer looking to
to differentiate on more than simply price. Some measure of
acceptance and co-operation is essential; aggressive business
access these markets, an alliance with the local generics firms
practices risk damaging the industry as a whole.
could save a lot of work – and the time and costs associated with
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