Glenmark Generics Inc: Launch @ Risk Harvard Case Solution & Analysis

Glenmark Generics Inc: Launch @ Risk Case Solution

Problem Diagnosis

Vijay Soni, the Vice president of the pharmaceutical subsidiary of Glenmark Pharmaceutical Company limited, was facing a problem in the year 2010 which could also be considered as a dilemma. The subsidiary, Glenmark Generics Incorporation was seeking the opportunity to launch one of the generic drugs in the US drug market for one of the branded drugs called Tarka. However, the certainty surrounding the launch of this drug was high and the costs might be also much higher than the expectations of the company.

As this launch of the generic drug was surrounded by serious litigation costs which might be incurred and also outstanding lawsuits which were against the launch of this generic drug by the branded manufacturer, therefore, this launch was called as the launch @ risk in the US market. If the company launches this product and it fails then serious litigation costs will have to be paid by the company as compensation.

The original drug called as Tarka was to expire in the year 2015 in February. In the final ruling of this case, the judge Dennis M. Cavanaugh had denied the application of Glenmark Generics Incorporation on the request of the patent holder and now a final decision needs to be made by the executive vice president of the company by considering the range of options associated with the launch @ risk of the generic drug. Final recommendations need to be made to the CEO after performing qualitative and quantitative analysis.

Analysis of Case

A generic drug has been created against the branded drug Tarka using the same inputs of the original drug and this is the reason that is will capture the complete market of Tarka due to its low cost. The cost of the generic drug is basically $ 2.1 per capsule compared to the cost of Tarka of $ 3 per capsule which has been set by its manufacturer, Abbot.
The main advantage for Glenmark Generics Incorporation would be a surge in the demand of the drug sales and higher profits as the costs associated with research and development are zero and the manufacturing costs are also very low (Policy, 2013). The gross margin which is currently being earned by Abbot is 60% on the sales of Tarka where as Glenmark Generics Incorporation would be able to earn a gross margin of about 90% on the sales of its generic drug. All the choices available to Glenmark Generics Incorporation have been first stated and then analysis for each option has been performed.

Choices Available to Vijay Soni

All the choices which are available to the executive vice president are as follows:

Choice # 1: Proceed with Launch @ Risk

This is a lucrative marketing opportunity and the first choice of the company is to go ahead with this launch at risk. The risks associated with this launch are very high but the benefits which would flow to the management of the company are also significant. The analysis for this option could be performed by analyzed the best case and the worst case scenario and an expected value of the option could be calculated...................

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