Case 3 : Genentech Inc.
The Question
Genentech, Inc. is a biotechnology company that uses human genetic information to discover, develop, manufacture, and market human pharmaceuticals for unmet medical needs. The Company currently manufactures and markets eight pharmaceutical products in the United States for several serious medical conditions. They have three main drugs, with limited advantages or markets- a heart-attack medicine, plus drugs for the treatment of growth deficiency and cystic fibrosis. However Genentech has prospered by using some resourceful techniques to grab market share from pharmaceutical giants, in the process triggering a back-lash with its aggressive methods. Because of this make genentech one of few thriving biotechnology companies. Even they have good profit and good research team which is clouded by their marketing practices. What are their marketing practices? Is this can be acceptable in the marketing of drugs?
The Facts
Before to answer the question, we should try to find what are Genentech Drug’s marketing practices? According to the article we can find some facts about Genentech Drug’s.
1. The Genentech is compile an extensive registry of thousands of patients who have had a particular illness.
2. The Genentech spent an almost unprecedented $ 55 million on a huge study of the two drugs.
3. They rapidly converted that narrow advantage into a rout and quickly faxed hospital a news release.
4. The Genentech salesman had persuaded the hospital to exclude rival drugs by exaggerating TPA’s benefits and glossing over its risks.
5. Genentech sponsors lots of continuing medical-education programs.
6. Genentech believe that product information is apt to be more persuasive with doctors if it comes from a source other than a drug company. And they is good at cultivating such sources. They use some nurses and doctors.
7. Genentech executive of funneling $224,000 to a doctor- disguised as research grants and consulting fees.
8. Genentech screened schoolchildren and suggested a doctor’s visit for those who were very short fort heir age
Genetech has used those strategies to dominate the market for cardiac clot dissolvers and controlled 70 percent of growth-hormone market. .
The alternative Courses of Action
The Genetech’s SWOT
1. Genetech’s strengths: They control cardiac clot dissolvers and 70 percent of growth-hormone market. Thay have strong pipeline of new drugs and expanded uses for existing ones. A rigorous discipline rules Genentech’s research. Genetech also has been a pioneer in drug manufacturing, having invested in new production technologies such manufacturer for drug companies, that lack such expertise.
2. Genentech’s weaknesses: Their profit almost from three main drugs. They always use aggressive methods to other rival companies. They always try to test the limit which government’s organizations can accept. Too many administration , victims, doctors and medical centers complaint or indictment them.
3. Genetech’s opportunities: In next century, Biology companies may like Internet companies become new golden rush. From a drug manufacturer’s point of view, this burgeoning of the potential market has coincided quite nicely with the development of pharmaceutical treatments.
4. Genetech’s treats : Timing is their biggest threat. Because technology and world always improve and change. And any medical researches always spend a lot of money and may not have good conclusion.
Decision and Reasoning and Implementation of Decision
If Genetech want to keep their share market. They should change their marketing strategies. Because I don’t think their marketing practices can be acceptable. They should not usually tests limits of what is acceptable. Genetech should proof their clinical-trial data which as a rule tend to have rosier outcomes than real life. They should not always support good news and cover any bad news. They also should use correct way to sale their products not to effect hospitals , doctors or nurse to make their decisions. The reason are government will pay attention to their company and customers will debut their products. Genetech also have some risks now. The primary risk to Genentech is competition to its older products, Activase and human growth hormones. In the thrombolytic arena, the main competitor is Centocor’s Retavase. However, some research paper show that Genentech will be able to recapture market share with the introduction of TNK, a second-generation product. In the human growth hormone market, Genentech has several competitors. However, I believe the company may gain some market share with the launch of Nutropin Depot, a sustained-release formulation.
And Genentech is one of the premier companies in its sector, with strong fundamentals and a promising outlook. In next century this kind of companies will become golden rush. However, they must exist at that time.
Update information:
1. Roche sells 20 million shares of DNA stock at $143.50.
2. Two new products the launch of Nutropin Depot and TNK in 2000:
Two products are currently awaiting regulatory approval: 1) Nutropin Depot, a
sustained-release form of its growth hormone; and 2) TNK-tPA for acute
myocardial infarction. Nutropin Depot was recently granted priority review,
and hence, could be out on the market as early as the first quarter of 2000.
Approval of TNK is expected to come in mid-2000.
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