Healthcare case analysis

AstraZeneca UK Limited passion about bringing new medicines to patients depended on David Brennan-the C.E.O, experience as a front line doctor. The transforming market posed challenges such as less patent protection, more generic drugs competition, stiffer government regulations, and reduced R&D production. He therefore needed to address all areas of AZN’s value chain, develop a strategy like prescription of beneficial drugs, grow the business globally, streamline the organization, increase efficiency, and built courage, creativity and collaboration culture.

AZN was faced with the challenges in the pharmaceutical market towards the changing of how new medicines flow to patients. The article will address the challenges and the industry pressure in ensuring this course against the odds like challenges of new products failing to reach the market, expiring of patents on important medicines, faltering of the economic environment, heightened competition, slower pipelines, and drug safety issues. This greatly depended on AZN’s R&D performing its function to deliver.

The world of pharmaceutical market was valued at $754 million in 2010, where established markets averaged a 3.2% growth and emerging markets registered a 13.8% growth. The steady transformation 40 years ago had however began a radical transformation characterized by unfavorable conditions mentioned above. Drug safety issues resulted to reduced customer confidence, which was increased by high prescription costs coupled by the reluctance of coverage drugs over brand names by HMO’s. Regulations demanded more safety data which meant additional costs coupled with the fact that the FDA in the U.S was approving fewer products meaning slower time to market. The pharmaceutical industry traditionally was R&D; successful firms are those which delivered the most successful drugs. Firms therefore targeted bringing more and more medicines into the market as they could by using their huge investments. AstraZeneca like its competitors had to find ways to discover, develop, produce, and market drugs faster, using less money while at the same maintaining quality.

The organization had several strengths and weaknesses which could be assessed through the various stages involving industry pressure in research and development, application of patent and generics, the health care reforms, the shift to biopharmaceuticals in the industry, and how it coped with competition. These strengths and weaknesses of AstraZeneca could be seen in the formulation of strategy, implementing strategy in transforming R&D, the industry-leading capabilities and their culture. AZN had implemented strategies to increase the success rates and reducing the time it takes to develop a medicine. Other strengths included taking advantage of the patents and generic for instance the $4.9 schizophrenia drug sale in 2009, performed well with competition by instituting an in-depth review to examine key drivers in the present and future, and ability to specialize-in areas of cardiovascular, gastrointestinal and respiratory, oncology, neuroscience and infection medicine, focused portfolio, culture of courageous leadership, innovation and collaboration, and industry leading capabilities. Some of the weaknesses of AZN could be assessed as capital deficit in the bid to continue being globally integrated and innovative driven rather than concentrate on diversification.

Several problems can be identified in the AZN journey to become a leader in the pharmaceutical industry through growing the business globally, streamlining the organization, increasing efficiency, and building a courageous, creative and collaborative culture. In the area of health care reform there was an unattractive feature which involved a set of control measures in the federal health care plan which were likely to present long-term pricing issues for the industry. The shift to biopharmaceuticals meant that the company was to invest more because biologically manufactured pharmaceuticals were more expensive to manufacture and produce, and represented a different scientific field. Other problems included; global competition which made rivalry in the industry intense, as well as problems associated with challenges in implementing the strategy to transform R&D, installing an external model, and problems associated with capacitating predictive science, personalized healthcare and the clinical trial design.

There are several recommendations which can be referred to AZN through the journey of transforming how new medicines flow to patients. The company should continue encouraging the culture of courageous leadership, innovation and collaboration because it will continue on improve the public view of them as a firm that fosters an inspiring and compelling vision, and spends time involving, developing and empowering their people through creating innovative working ways and new ideas to develop and discover differentiated medicines to patients. The R&D operating model which ensures an effective structure, process and working ways to enhance effectiveness and flexibility, as well as the PIB assessment and oversight of investment opportunities across modalities and disease areas should be encouraged because they help to visualize the right disease target, the right exposure to the right tissue, right patient population, safety of drugs, and how to bring value to the patient. AZN should also focus of improving on assessing prevalence, discoverability, and develop-ability through simplifying the geographic footprint and reducing the cost base.

In conclusion, the AstraZeneca has made huge strides in transforming how new medicines flow to patients and has thus become a large player in the pharmaceutical industry. AZN has succeeded in inspiring and connecting people by actively collaborating irrespective of boundaries to share expertise and knowledge to the benefit of the customers, despite the many challenges the company has grown through. This success was largely contributed by the milestones realized by the executive team that was looking into the ways to develop industry-leading capabilities. This executive team looked for an external framework or model used by other companies to benchmark capabilities needed in R&D. The executive team also identified 21 capabilities needed to run a successful R&D function as well as four major capabilities needed to differentiate AZN in the industry: predictive science, personalized health care, clinical trial design and gaining patient and prayer insight at an earlier point in time. The company should consider concentrating on how to prolong that smarter clinical design, better the understanding of diseases and potential drugs, as well as how to make it personal and get customer patient insights from the start, because this way AZN will maintain its world-class status.