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Merck And Vioxx, The Implications Of New Product Development In The Pharmaceutical Industry

2228 words - 9 pages

In the recent years, speed - to - market and accelerated product development methods have come under scrutiny in pharmaceutical industry. Research agrees that accelerated product development may be crucial for pharmaceutical corporations to cut costs, provide first-to-market competitive advantages, and secure patent protection (Yeoh, 1994). However, when such method were not employed under moderation, the time pressures can cause the development team to unintentionally or intentionally overlook many hidden hazards which may lead to potential failures (Chandy et al, 2006) . This is particularly true in regard to the risks of product development in the pharmaceutical industry, particularly the amount of costs involved with research and development, the high failure rate of products under the scrutiny of the FDA, as well as latter costs of litigation and withdraw when hazards were identified when the product had developed its position in the market (Grabowski, 2002). This paper examines product development processes for Vioxx, and analyses potential causes of the product's failure.Merck's product development processMerck operates in an extremely competitive industry. They are constantly faced with threats of cheap and competitive knock-off drugs upon the expiration of their patented proprietary drugs (Crawford, Benedetto, 2006). Hence, their opportunity identification was aligned with ongoing marketing planning strategies in order to survive in the competitive environment. In pursuing these plans, Merck employs ongoing innovation strategies in order to retain their tradition of creativity and innovation without resorting to a merger. The sources of their opportunities were identified in external mandate of threats from patent expirations, as well as competition in the industry whereby a pharmacologist in a competing firm had developed a pain killer that is gentle on the stomach; internal mandates whereby a lab test was developed to determine the amount of stomach upset caused by painkillers; new resources, as an non-irritating painkiller formula by another company which had not yet underwent human testing.After the opportunities were identified, Merck moved onto the concept generation phase, whereby the product concept of a non-irritating painkiller was quickly established. However, unlike traditional concept generation, Merck's new concept was a spontaneous discovery made by one of its employees, and no apparent initial reviews of other product concepts were made before the current project was chosen. The quick decision was motivated by the urgency of the market opportunity as a market competitor had already developed a product with similar concepts. The decision for the new concept was made internally by the head of the drug research department, and no customer involvements were present during this phase.When the product concept was established, Merck moved into concept evaluation phase as team of researchers developed hundreds of compounds to...

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