Specialty versus generic specialty pharmaceuticals

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Specialty versus Generic Specialty pharmaceuticals were high-cost (demanding higher prices), high-complexity (more difcult or costly to manufacture), and high-touch (more difcult to dispense such as an injectable) products. Many of these were derived from living cells— biologics . Tey could be owned and delivered by either the majors (companies like Pfzer and Merck) or by generics frms, companies focusing on the manufacture and sale of pharmaceutical equivalents to brand-name products. Tese generics were often post-patent products. General pharmaceuticals were companies like Pfzer and Merck. Tese frms invested heavily in research and development in the pursuit of promising and patentable innovations (brand-name drugs), and when successful, in the manufacturing and marketing of those products. And they did so over a wide spectrum of products. Tis was much diferent and much more costly than the business lines of generic frms, where no real in-house R&D was undertaken. 6 A short position is a bet that a share price will fall in the future. Te investor sells shares of borrowed stock in the open market, expecting the price of the stock will decrease over time. Tis allows the investor to purchase the shares in the open market at a lower price (hopefully) and return the shares which he borrowed to the broker. 7 A pyramid scheme is a business model that recruits members via a promise of payments for enrolling others into the scheme, rather than supplying investments or sale of products or services. Payments from new enrollees are used to compensate their recruiters, repetitively, hence forming a pyramid structure. A06-18-0005 4 This document is authorized for use only in Prof. Nandakumar M K's Strategic Management (SM) - Sec A at IIM Kozhikode - EPGP Kozhikode Campus from Jul 2020 to Dec 2020.
Allergan’s CEO, David Pyott, was old school. He believed in the value of R&D in sustaining a pharmaceutical business, and then in using sales and marketing expenditures to extend a product’s sales lifespan. Born in London, Pyott held an MA from the University of Edinburgh, an MBA from the London Business School, and an MS from University College London. He had worked in the industry at Sandoz and Novartis before joining Allergan as CEO in 1998. He was credited with growing Allergan from a small eye-care company to a major pharmaceutical and medical device multinational over his 16-year tenure. As noted in Allergan’s 2013 annual report, the company remained committed to research while simultaneously managing costs: 8 As we address the challenges of 2013 and benefit from our strong diversified portfolio of products, we intend to continue to invest heavily in the future. We plan to increase our expenditure on R&D from $1 billion in 2013 to approximately $1.5 billion in the coming five years, focusing in particular on our key areas of new indications and new forms of botulinum toxin, retinal therapeutics, dry eye, glaucoma, medical and aesthetic dermatology and plastic surgery.

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