MARKETING STRATEGIES IN THE COMPETITION BETWEEN BRANDED AND GENERIC ANTIBIOTICS
Clamoxyl in 1996
We are in France in October 1996. Sales of Clamoxyl have dropped by 30 % in three months since the CNAM has sent a letter to urge doctors to prescribe generic drugs instead of the more expensive (but therapeutically equivalent) branded drugs in order to reduce the deficit of the social security system.
As the Marketing Director of SmithKline Beecham Laboratories (SB), the laboratory that launched Clamoxyl in 1974, I wonder what I can do to reverse that trend or at least lose as little money as possible.
1. Analysis of the situation
1.1 Product
Clamoxyl was the first amoxicillin available in France. Because of its efficiency against the most common bacteria and its few side-effects, Clamoxyl had an immense success. And in spite of the loss of its patent protection in 1980, Clamoxyl was still the highest selling antibiotic in 1996. Actually, the progression of generics halted after 1985 and the market share of Clamoxyl remained stable for about ten years, when it started to decrease again. Whereas some of its decline was due to competition from generics, part of it was also due to increased competition from other families of antibiotics, helped by their higher promotional investments. Still, in the year ending in August 1996, Clamoxyl remained the most prescribed antibiotic in France, captured 34% of the amoxicillin market and 8.8% of the total antibiotic market. Its turnover (75.4m?) accounted for 33% of SB's antibiotic sales and 18.2% of its total sales. It exists in numerous forms (tablets, capsules, syrups?.) and dosages (from 250 mg to 1g). The cost structure is relatively insensitive to volume changes, so we will focus ou ...