key stakeholders and the effect of their actions on the financial sustainability of the...
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Key Stakeholders and the effect of their actions on the Financial Sustainability of the Pharmaceutical CompanyTRANSCRIPT
Key Stakeholders and the effect of their actions on the Financial Sustainability of the Pharmaceutical Company
Group A1
OverviewThe pharmaceutical companiesThe stakeholders
◦Who are they?◦Responsibility over profit
The stakeholders stages of involvementWho are the key stakeholders?
◦What are their roles?◦Power & Interest
How do these groups effect the financial sustainability of the company?
Conclusion
Pharmaceutical Companies
Who are the stakeholders?
Source: Dimitris Dogramatzis, Pharmaceutical marketing: a practical guide (2001), p27-29
Responsibility over profit
TrustEstablishing trust among shareholders and
social responsibility among customers
Innovation Ensuring constant innovation and
development
Value Creating both financial and nonfinancial
value
Stage 3Clinical Trial
Stage 3Clinical Trial
Ethical DrugEthical Drug
Stage 1& 2Stage 1& 2
Patent & Licenses
Stakeholders
R & D
Main Company (CEO, Management)
Key Opinion Leaders (i.e. Consultants)
Marketing (Education)
Regulatory Institutions (FDA, EMEA, MHRA)
Research & Development (Phase I to IV)
Marketing (Further Education & Selling)
Health Provider (Doctor, Nurse & Hospitals)
Patient & General Public
Certain Institution (Insurance Companies)
Government (i.e. Socialized Medicine Policy)
Regulatory Institutions
A license to print money?
Who are the key stakeholders?
Power/Interest Matrix - Gardner, J.R., Rachlin, R. and Sweeny, H.W.A., Handbook of Strategic Planning (1986)
Financial Sustainability
Key Responsibility Financial Influence
Management •Working with-in regulations and the law•Growth Strategy•Communication & Transparency•Ethics & Safety
Control on financial budget
Marketing •Branding & Public Image•Promoting•Pre-Marketing
Generating sales
Opinion Leaders
•Research on illnesses•Promotion of drugs•Influence and Expertise
Influence on investment of the company
Competitor •Generic Drugs (Me-Too)•Innovative Competition (R&D)
Price wars
Organization being able to generate adequate profits while meeting operating expenditures.
Financial Viability of Pharmaceutical Industry
Ethical contribution to sales
Total sales revenue
$m
Total ethical sales
$m
Ethical sales as a % of
total
Pfizer 32,373 28,288 87.4
GSK 31,819 27,003 84.9
Merck 51,790 21,631 41.8
Astra Zeneca 17,841 17,343 97.2
J&J 36,298 17,151 47.3
BMS 18,106 14,700 81.2
Novartis 23,151 13,493 58.3
Pharmacia 13,993 12,037 86.0
Wyeth 14,584 11,733 80.5
Lilly 11,077 10,384 93.7
Source: Reuters Business Insight (2003a: 104), company accounts and SEC filings
Industry Analysis (UK)
TRADE FIGURES RETAIL PRICE FIGURES
Source: The Association of the British Pharmaceutical Industry (ABPI Annual Review 2008 - Industry facts & figures)
ConclusionKey Stakeholders
◦Crucial to the company◦Decisions makers
Financial Sustainability◦Costs◦Short-Term◦Long-Term