Subject category:
Production and Operations Management
Published by:
INSEAD
Length: 18 pages
Data source: Field research
Abstract
The case describes the development of a new analgesic (painkiller) drug for the German subsidiary of a large Swiss pharmaceutical company. Development was successfully completed by a dedicated unit, and the drug gained a large market share quickly after launch. However, irresponsible use of the drug caused severe side-effects in a few patients, leading to a crisis which ultimately led the German health authority to restrict the drug to a small niche indication. The restriction eliminated most of the commercial potential of the drug. Many factors contributed to this product failure; the question is whether there were systematic management errors.
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Abstract
The case describes the development of a new analgesic (painkiller) drug for the German subsidiary of a large Swiss pharmaceutical company. Development was successfully completed by a dedicated unit, and the drug gained a large market share quickly after launch. However, irresponsible use of the drug caused severe side-effects in a few patients, leading to a crisis which ultimately led the German health authority to restrict the drug to a small niche indication. The restriction eliminated most of the commercial potential of the drug. Many factors contributed to this product failure; the question is whether there were systematic management errors.