“Double, Double, Toil and Trouble: One Compounding Pharmacy’s Recipe for Steroids case” Case Help
Introduction
NECC is the Framingham, Massachusetts, based pharmaceutical industry that is established in 1998 as a compounding pharmacy in the United States of America however NECC is run by a family of Barry J. Cadden (Owner, President and head of Pharmacist), Gregory Conigliaro (Owner and director) and Lis Cadden (Wife of Harry J. Cadden). Initially NECC was one of the leading pharmaceutical industry in the United States but unfortunately in 2012 it became the part of a scandal of meningitis outbreak because of which 64 deaths took place due to which the economic health of industry damaged badly and it became bankrupted (Kirschner, October 01, 2016).
While the Ameri dose, LLC has a close relation with NECC because it was founded along with NECC by Barry Cadden and his brother in Law. The Ameri dose was the Massachussers, Westborough based company which manufacture the prescription medication for hospitals, and both NECC and Ameri dose were involved in a scandal of a meningitis outbreak in 2012. Although the main source of the outbreak was NECC but Ameri dose entangled into that scandal because of its affiliation with NECC furthermore the FDA of U.S took actions against the scandal so because of which Ameri dose recall it’s all products and shut down their operations completely in 2012.
Situational Analysis
The internal and external analysis of the company is done by the various tools and methods which aid in the deep analysis and assessment of the company.
Internal Analysis
The strategies and internal environment of the NECC/Ameri dose are analyzed by applying the following methods:
SWOT Analysis of NECC/Ameri dose.
The pharmaceutical industries are included in those industrial sectors which face various difficulties regarding to build up the market values because of the rivals already in the market. However, the NECC/Ameri dose are included the most reputed companies among the pharmaceutical and compound pharmacies that provide best various type of products to the customers and the behavior towards the customers was enough efficient due to which they became successful to build-up a huge market within the short period. On the other hand NECC which was a compounding pharmacy had a huge business market and the firm spend his business around various states of U.S while it would have its own manufacturing company (Ameri dose), So they had their own manufacturing company due to which they were enough successful to take over the market.
In 2012, they got involved in a candle due to which over 64 exposed patients died where they supplied fungal contaminated vials in over 23 states, so that is why they became bankrupt in 2012 and shut their business. Reports show that NECC/ Ameridose had a license only to manufacture the individual patient prescriptions while, according to the regulatory authorities company shipped their drugs to multiple states which were outside of their legal boundaries.
However, according to regulatory agencies and FDA the drug was contaminated by fungi because of which fungal meningitis break-out, which shows that the quality assurance of the company was not standard. As per reports before fungal meningitis various complaint calls were received by a company from customers but they did not respond regulatory agencies gave warning letter to the company regarding the quality but they ignore which result in fungal meningitis break-out which dragged the company’s whole market value down.
VRIO analysis
Although the NECC was the compounding pharmacy, which has the efficiency of generating a huge business for the company however they expand their compounding pharmacy business and they manufacture their products within their affiliated firm Ameri dose and distributed the bulk amount of products to various states. NECC/ Ameri dose was working under the same family which aid company to expand their business and build-up a healthy economic zone for company.
External analysis
External analysis has a vital role in the company’s analysis’s external environment, external factors and the external resources. For the analysis of the external analysis following models are used.
Porter’s five forces model
For the determination of various environmental factors and resources, porter’s five forces model is used by the company for the achievement of their aims and objectives. NECC can achieve their goals and market value globally by investing in diversified projects and by utilization of their resources. Company have efficiency in reducing the challenges by providing the qualitative products and services to the customers, which results in the reduction of threats as compared to its rivals.
PESTLE analysis
The most influential tool which is used by companies for the effective management, strategic planning and utilization of resources. While on the other hand, PESTLE is used to design and giving shape to the social, political operations, financial management, innovations and environment of the company. The NECC provides quality services and products to the customers while all the operations are operated under the challenging environment which is controlled by the FDA and other state regulatory agencies, however the most challenges involve the legal and political challenges.
Value chain analysis
The company operations are much more effective than their rivals, where they had a high quality of services and products which are more diversified than other companies which aid company to face the challenges. So the advantages and potential challenges regarding the company’s value chain process are determined.
Question No 1
NECC and its affiliated company Ameri dose distributed fungal contaminated methylprednisolone vials due to which the fungal meningitis out broke because of which around 70 people died. While NECC alters the ingredients to create a specific product for individual patient but according to the Massachusetts state regulators company had a licensed for the prescription of individual patient which was illegal. The regulatory agencies like FDA should take to notice and put them out of business and stop the advertisement of the company.
The Public health is the most important issue which are regulated by the above government agencies, while the FDA which is the most agencies which assure the protection and promotion of the public health by checking the quality of the products that are manufactured by the pharmaceuticals companies or other food companies. While the drug regulatory agencies should check the drugs on each dimension before distribution, this will cause the assurance of the public health. However, in case of any outbreak the CDC and DPH play their role by plan the protective measures which will be helpful to minimize the infected cases and the solution of that outbreak or issue by various lab or Safety measurements and manufacture such type of drugs that improve the immune system of the public so these safety measures aid to maintain the health the Board of pharmacy should take serious actions on the quality compromised products (drugs) which is much more effective for the regulations of the health.
Although each health agency and the branches of the government which are working on regulating public health have a direct relation to take notice of the particular activity which may cause a health issue. The meningitis outbreak was occurred in 2012 in which NECC and its affiliated company was involved because of which around 64 people died because of the distribution of over 17,000 fungal infected vials of Steroid in the twenty-three states of U.S. This outbreak badly affect both the pharmaceutical companies because of which they shut down their operations, although there are various agencies which are working to regulate the pharmaceutical issues but the most important agencies which play a vital role to maintain the health problems include:
- DPH (Department of Public Health) of United States
- FDA (Food and Drug Administration) of United States
- CDC (Centers for Disease Control and Preventions
- The Board of Pharmacy of United States...
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