Market Orientation and New Product Development by Pharmaceutical Firms Operating in Kenya

Abstract

Discovering and commercialsing of new drug molecules is critical for the future assets of a pharmaceutical company. However, bringing a molecule from discovery to manufacturing is a long and costly process that implicates several phases: Three development clinical test phases, Phase I to Phase III, the filing of a New Drug Application, NDA, and the final approval by governmental regulatory authorities. Thereafter, manufacturing starts and eventually a phase IV trial is conducted to further analyze side effects on larger populations, and the company finally realizes return on its investment (WHO,ASEAN TRIPS report,2006).After having decided to launch a discovered molecule into the development pipeline, the company is able, at any moment to reevaluate the interest of ,one, Continuing the process ,two, Selling the molecule to another company and getting back the research investment ,three, Subcontracting partially or totally the remaining process to complete the research phases until NDA and Manufacturing . Once the new product begins to be manufactured, the company has to schedule this new production and has the choice between 3 possibilities, Integrating this new production into the existing production capacities, and/or Planning to extend the production capacities to adjust it to the new requirements and/or decision to subcontract partially or in totality the production of this product. In this case, early contacts have to be taken with the partner, selected upon his capabilities, financial health, knowledge and experience according the product to be manufactured. Products originating from this route are usually “branded original” products. These products usually have World Trade Organization patent protection for periods of up to 15 years. The product is then availed globally through applications to individual country regulatory authorities which review scientific evidence of efficacy and safety before being authorized for sale in such markets (WHO,ASEAN TRIPS report,2006).Other companies will not go through such a process. They will copy formulations of already licensed products, depending on patent protection and commercial success. Using replicated data from phase I –IV tests, they will submit their “generics” for commercialization approval by regulatory authorities who only subject such generics to quality tests (WHO,ASEAN TRIPS report,2006).