Wednesday, September 22, 2010

Happiness Index / Culture

Hey class,

Just a quick thought from class on this past Tuesday. Do you think the happiness index is statistically significant and/or actually is valid in correlating to average work hours? To me this is quite individualistic and cannot be trended accurately.

In addition, the discussion regarding cultural implications of marketing in Turkey and India was a bit flawed. It is clear that Turkey is at a cross-roads in terms of political stance on secularity vs. implementing more religious tendencies across politics and other social programs. However, it is also very clear that the country as a whole would like to benefit from involvement with Western countries....that cannot be ignored. The bottom line is that religious views are personal and do not have to be sacrificed by implementation of a secular government.

Marketing of cosmetics, as was mentioned in class, is no different between the religious and "modernist" groups within Turkey. The harder industries would be those that are clear offenses to the Muslim faith...such as excessive alcohol consumption.

In India, the cast system determines social progress. It is also known that India is one of the most diverse countries, with tons of varying languages and religious beliefs. While marketing in India is superficially geared to the rich and poor separately, it should be strategically aligned to the preferences of varying cultures within the country. But just as in many other countries, the new generations dominate goods and services that are demanded within the country, while adhering to traditionalist views.

The in-class video paints a good picture of the urban, technological expansion happening throughout the country, but does a terrible job in showing the reality of the rest of the population. Yes, agriculture is suffering and some of those villages are not being represented in the best way. However, most of the population lives around/near/in the cities. As the cities become way too overpopulated, they expand outward. Companies began outsourcing operations to the outskirts of the cities...which means infrastructure gets built up and the suburbs expand.

Any additional thoughts on yesterday's discussion? As the professor pointed out, Turkey and India are extremely complex culturally and therefore have significant impact on the marketing of various products.

Monday, September 20, 2010

Outsourcing of Contract Research Organizations

The success of a large pharmaceutical company depends upon internal factors drivers such as scientific competence in R&D, computer integrated manufacturing, and marketing medicines directly to consumers, to name a few. Dwindling drug discoveries necessitate research and development, innovation, and marketing of new pharma and biotech products in order to combat price fixing and cost escalations. External factors, such as patent expirations, heighten drug competition due to generic entrance into the market. Smaller product life spans, worldwide regulatory challenges, and the increasingly slim deadlines for clinical development have hiked up in-house R&D expenditure and affected productivity. These trends have driven pharmaceutical companies to outsource an increasing range of functions such as clinical services, data management, database development, and medical coding to Contract Research Organizations (CROs) as a means to control in-house R&D costs, expand capacities, and improve core skills.

A Contract research Organization/Clinical research organization is a company that provides a broad range of services to the Pharmaceutical and Biotechnology industries in the form of outsourced pharmaceutical research services. A CRO can conduct processes such as moving a new drug or device right from its conception to FDA marketing approval without the drug sponsor having to maintain a staff for these services. The total CRO market size was estimated at $20bn in 2008 and is expected to grow at an annual rate of 8.5% to reach $35bn through 2015. CROs provide drug developers with substantial global capacity and have now become critical contributors to clinical trial activity. Clinical trials conducted by CROs are completed up to 30% more quickly than those conducted in-house by pharma companies. The leading CROs (such as Quintiles, Charles River, IPRC, etc..) are commodity full service providers, acting as one-stop shops for all services, from preclinical through marketing; operating on a global scale. Hence pharmaceutical companies getting involved in strategic partnerships with CROs to gain a competitive edge in the global business environment.

Biopharma companies are increasingly turning to developing countries in Asia, Central and Eastern Europe and Latin America as sites for clinical trials. These activities are driven by large patient availability and fast patient enrollment, the ability to tackle diseases (such as malaria, leishmaniasis) that are rare in industrialized nations and large potential markets in these developing countries. In an interview with Gregg Sweet, VP of Strategy and Development at ICTS, he recounts a 500-patient Alzheimer’s trial in Eastern Europe that reached full enrollment within days, whereas the recruitment phase for the U.S. phase of the same trial lasted more than 18 months without reaching its enrollment goal. Additionally many physicians in these countries are trained in the Western countries and are highly knowledgeable. The costs for their services are lower than that of companies located within the U.S. and the major seven European markets. Developing countries see the CRO business as a unique opportunity to work with drugs that they would otherwise have no access to. They see trial participation as a unique way to bring Western medicine to their patients.

CROs in developing countries realise the potential of this business and it benefits to their economy , which is why they are actively advertising their services to the pharmaceutical/biotech sector.

Should pharma continue to outsource clinical services or should it shift to streamlining internal operations? Does quality suffer?

Saturday, September 11, 2010

Golden Rice: You Can’t Give it Away!

Back around 2000, Ingo Potrykus (Swiss Federal Institute of Technology) and Peter Beyer (University of Freiburg in Germany), developed the biosynthetic pathway to generate genetically modified (GM) versions of normal rice containing beta-carotene (Vitamin A). They termed this technologically advanced food, “golden rice”. Research has showed that Vitamin A deficiency can lead to varying levels of vision loss at night and also leads to maternal mortality. According to the World Health Organization, there are roughly 13.8 million children around the world that experience this loss of vision due to a deficiency in Vitamin A. Beyer and Potrykus developed a way to have the modified rice distributed to select “subsistence” farmers around the world. Wikipedia summarizes the intellectual property issues quite well. Let’s use their words:

“Beyer had received funding from the European Commissions 'Carotene Plus' research program, and by accepting those funds, he was required by law to give the rights to his discovery to the corporate sponsors of that program, Zeneca (now Syngenta). Beyer and Potrykus made use of 70 intellectual property rights belonging to 32 different companies and universities in the making of golden rice. They needed to establish free licences for all of these, so Syngenta and humanitarian partners in the project could use golden rice in breeding programs and to develop new crops.”

So let’s ask ourselves the question: Huge Potential Market Opportunity…or is it?

The proposed solution was to provide farmers in developing countries with golden rice seeds to test the waters. These farmers did not have to pay any royalties back to Syngenta unless they profited more than $10,000. Though this was viewed as a fail-safe for the farmers, it did eat up some land for growing other crops. We’ll side-step that issue for now. This seemingly ‘sound’ plan to eradicate vitamin A deficiency began with positive reviews, but since its inception, has run into much opposition and a growing resistance impeding market adoption.

Organizations such as Green Peace [ugh] have sounded their concerns vocally regarding the use of golden rice, and for that matter, pretty much all genetically modified foods or transgenic orgainsm. They essentially believe there are harmful side effects to humans and the external environment resulting from the removal or integration of certain factors via recombinant DNA technology. Another concern was if there were sufficient Vitamin A levels within the rice to attain any therapeutic effect. Another issue was that there had to be a level of fat inherent in the consumer’s nutritional diet in order to have a positive effect.

Most importantly, there was an issue of economics. With reports that the amount needed to consume to eradicate night blindness for a family of four is 240 Kgs. of rice which for a family of four is 480 Rs per month when the monthly average is Rs. is 750 a month. This was actually resolved by the creation of a new strain that contained much higher levels of pro-Vitamin A for similar price points.

The Agricultural Economics and Rural Development organization studied the economics behind GM crops and came up with this figure, where HA is hectares of land.

So there has been progress, but because of the media and limited acceptance in foreign markets (i.e. Europe), the growth has been relatively slow over the past decade. This is strange when projections show that golden rice could reduce the beta carotene deficiency in a very cost effective manner. The most apparent reason is failed support from media outlets and foreign health institutions. No effective support from international constituents and hesitant consumers have slowed Syngenta's success. EU makes it necessary for full documentation to be submitted to government officials, and for GM foods to have full labeling on their products. Consumers are definitely weary and so are farmers. Check out what the opponents say:

With the global and scientific opinions at a stalemate to effectively address vitamin A deficiency alternative methods should be instated, such as encouraging a varied diet and marketing cheap oral supplements. As a science student, I (Beth) believe that the future genetically modified plants will be beneficial to society in some capacity. This reality will take increased studies, continued scientific discovery and a change in the global perspective to genetically modified food.

Comments and Questions are encouraged!



Welcome to Discussions in Science Markets!

The first of many blog posts has finally arrived! Welcome everyone to Alex, Beth, and Shruti's project page for IBUS 266, International Marketing. This website will focus on aspects of life science technology in the context of a global business market. Understandably, most of you are not scientist by not fear! The purpose of this blog is to talk about basic scientific topics in layman's terms to incite conversation regarding associated business topics, such as: market trends, regional differences in products, barriers to entry in foreign markets, cultural factors, etc.

Why science as a theme? The three of us are currently enrolled in a Molecular Biotechnology Masters program within the Professional Studies college at GW. So in coming up with a blog or wiki project or International Marketing, we decided to cross-link our interests and throw some scientific topics in the business blender. We are curious to see the business development implications specifically within the biopharmaceutical industry. Clearly we may stray from talking only about pharmaceuticals, genetic modification, and biotechnology...we don't want to be overzealous. So right now, let's just say we'll play it by ear as we want the class to have some influence in our blog discussions. Having said that, increasing costs and a declining economic environment have driven business development executives in pharma, for example, to restrategize their operations, locally and globally. Hence, megamergers in the biopharm industry. This is one HUGE industry driver that we will explore in the next few weeks.
So keep you're eyes open for new comments, questions, and ideas....and here comes some discussion on bioagriculture.

Looks yoummy, doesn't it? Now I'll hand the baton off to Beth. You have the floor.