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fifty years • 1947: The Country had no indigenous capability to produce pharmaceuticals, and was dependent on imports. • 1954: During this year the first public sector drug company, Hindustan Antibiotics Limited (HAL) was established. • 1961: In this year another company started his business Indian Drugs and pharmaceutical Limited (IDPL). • 1970: This decade saw many changes that would dramatically change the intellectual property regime and give rise to the emergence of local manufacturing companies. This changes were the passage of the patent Act 1970 that abolished the product patents, and the drug price control by which the government stipulated prices for all products. With the institution of both the DPCO and the 1970 Patent Act, drugs became available more cheaply, and local firms were encouraged to make copies of drugs by developing their own processes. • 1984: During this year the Indian’s government suffered many changes following Gandhi’s assassination. • 1990: The dawn of the 1990s saw India initiating economic reform and embracing globalization. • 1990: The government began the process of liberalization and moving the economy away from import substitution to an export- driven economy. Eli Lilly and Company History Eli Lilly and Company grew from a tiny laboratory in Indianapolis in 1876 to one of the world's largest pharmaceutical companies. Colonel Eli Lilly, a pharmacist who had served as a Union officer in the American Civil War, acquired a laboratory on Pearl Street in Indianapolis in 1876 and started Eli Lilly and Company. His innovative process of gelatin-coating pills helped establish the success of the company. When Eli Lilly died in 1898, his son Josiah K. Lilly Sr. took control of the company. Josiah inherited his father's civic mindedness and ordered the company to send much needed medicine to support recovery efforts following the 1906 San Francisco earthquake. In 1919, Lilly hired biochemist George Henry Alexander Clowes as director of biochemical research. Clowes' negotiations with researchers who developed insulin at the University of Toronto helped launched the first successful large-scale production of insulin in 1923. The success of insulin enabled the company to attract well-respected scientists and, with them, make more medical advances. Eli Lilly, the grandson of Col. Lilly, was named as the company's president in 1932. In 1934, the company made its first venture overseas when a Lilly office was opened in England. World War II brought production at Lilly to a new high with the manufacturing of Merthiolate and blood plasma. In 1943, the company began full-scale production of penicillin. Eli Lilly International Corp. was formed in 1943 as a subsidiary to encourage business
near London. In 1989. Indiana. The company has since made a comeback with sales on Zyprexa and Cymbalta. During his 18month tenure. Tobias. Eli Lilly and Company saw a flurry of drug production: antibiotic Keflex in 1971. Tippecanoe Laboratories. in Lafayette. a joint agri-chemical venture between Elanco Products Co. Also in 1948. Richard Wood was named CEO of Lilly in 1973. Taurel was named chairman in January 1999. leukemia drug Eldisine. advised ICOS shareholders to reject the proposal as undervalued. Lilly continued to expand. Lilly also purchased Cardiac Pacemaker. Vaughn Bryson was named CEO. Elanco Products Co. Eugene N. It was the company's first research facility outside the United States. Lilly sold its 40 percent share in the company to Dow Chemical for $1.trade abroad. In 1991.6 billion. antiarthritic Oraflex. In October 2006. Eli Lilly relinquished the presidency to his brother Josiah Lilly Jr. the first public shares of stock were offered and. causing Lilly to offer $34 per share. was formed for the production of veterinary pharmaceuticals. Ranbaxy History Ranbaxy Laboratories Limited is an Indian company incorporated in 1961. a manufacturer of heart pacemakers. the acquisition was approved by ICOS shareholders and Eli Lilly completed its acquisition of the company on January 29. The acquisition of ICOS would allow Lilly to gain complete control over Cialis. and selling of this drug. in 1953.000 people. Lilly made an uncharacteristic. or $32 a share.1 billion. a partner since 1998. In 1950. ISS. but ultimately profitable. In 1954. heart drug Dobutrex in 1977. by 1948.In 1997. a proxy advisory firm. He was the first official recruited outside of the company. Beesley was named president. and analgesic Darvon. During the 1970s and 1980s. Sidney Taurel. In 1945. the company reported its first quarterly loss ever.500 jobs over 10 years. In 1968. However. former vice-chairman of AT&T. but Lilly lost exclusive rights to Prozac in 2001 and profits fell drastically. which would become the world's top selling oral antibiotic. In November 1992 Lilly decided to form the Joint Venture In India with Rambaxy to focus on marketing Lilly’s drugs in that country with a huge population. the company opened a new plant in Clinton. marketing. and Dow Chemical created DowElanco. which manufactures vital signs and intravenous fluid infusion monitoring systems. In 1952. Lilly Research Centre Ltd. Lilly sold Arden to Fabergé in 1987 for $657 million. He was the first non-family member to run the company. In 1969. move in 1971 when it bought cosmetic manufacturer Elizabeth Arden for $38 million. a drug used to treat erectile dysfunction. Indiana. increased antibiotic production with its patent on erythromycin. England was built. Lilly employed nearly 7. It is India's . The initial attempt to acquire ICOS failed under pressure from large institutional shareholders. Eli Lilly announced a major expansion plan in July 1999. for $2. Eli Lilly announced that it was acquiring ICOS. Sixteen years later. Randall L. Ceclor. was named Bryson's replacement in 1993.. in 1979. 2007. former chief operating officer of Lilly was named CEO in 1998. enabling them to realize operational efficiencies in the further development. replacing Tobias. the company opened a new plant on South Kentucky Avenue in Indianapolis and. Lilly ventured into medical instruments through the acquisition of IVAC Corp. totaling $1 billion and expected to create 7.
along with the operational leadership Brar who joined the firm in 1977. The board of directors for the JV would comprise six directors. By the arly 1990s.1 million. three for each company. Lilly decided to form the Joint Venture in India to focus on marketing Lilly’s drugs there. It is ranked among the top 10 generic companies worldwide. It exports its products to 125 countries with ground operations in 46 and manufacturing facilities in seven countries. but those had never developed into on-the-ground relationships within the indian market. The CEO of the company is Malvinder Mohan Singh. and a formal JV agreement was signed in November 1992The newly created JV was to have an authorized capital of US$7. Questions 1) Did Eli Lilly pursue the right strategy to enter the Indian market? 2) How would you assess the overall performance of the joint venture? What did the partners learn from it? 3) What actions would you recommend regarding the Ranbaxy partnership? How would you implement it? . In the early 1990s. and Lilly retained the right to appoint the CEO who would be responsible for the day-to-day operations. present were Ranbaxy and Lilly’s executives.largest pharmaceutical company. when almost the entire domestic pharmaceutical industry was opposing a tough patent regime. and an initial suscribed equity capital of US$3 million. Singh’s visionary management. leading to an equity ownership of 50 percent each. A management committee was also created comprising two directors. Ranbaxy grew to become India’s largest manufacturer of bulk drugs and generic drugs. The Lilly Ranbaxi Joint Venture Ranabaxy approached Lilly in 1992 to investigate the posibility of supplying certain active ingredients or sourcing of intermediate products to Lilly in order to provide lowcost sources of intermediatepharmaceutical ingredients. was instrumental in turning the family business into a global corporation. with equal contribution fron Lilly and Ranbaxy. The first meeting was held at Lilly’s corporate center in Indianapolis in late 1990s. Lilly had had earlier relationships with manufacturers in India to produce human or animal insulin and the export the products to the Soviet Union using the Russia/India trade route. Rambaxy was accepting it as given. one from each company.