Doctors' perception of mergers and acquisitions in the pharmaceutical industry in Kenya

Abstract

Up to the year 2004, there were numerous mergers and acquisitions with the biggest being that of Glaxo Welcome and SmithKline Beecham to create the world's largest pharmaceutical company; GlaxoSmithKline. Many of these mergers are felt locally because many of these companies have local subsidiaries. There was therefore need to carry out a study to on doctors' perception of mergers and acquisitions on the pharmaceutical industry in Kenya. The objective of the study therefore was to determine the perception of doctors on mergers and acquisitions on the pharmaceutical industry in Kenya. The population of interest in this study comprised of medical doctors in Nairobi. According to the Kenya Medical Directory (2006) there are 900 practicing medical doctors in Nairobi. A sample size of 50 doctors was considered fairly adequate and representative. The study used convenience sampling. The respondents were medical doctors chosen from randomly selected hospitals and clinics both in private and public practice. Primary data sources were used to collect data using a semi-structured questionnaire. The questionnaire was divided into two parts. Section A was designed to collect general details about the respondent while section B focused on perception of the respondent towards mergers and acquisitions in the pharmaceutical industry. The data was analyzed using descriptive statistics. The findings showed that apart from product's curative power and cost to patient, doctors perceived brand recognition and company's image to be very important. They also agreed that the merged companies were domineering and arrogant, and disagreed with the fact that merged pharmaceuticals companies are caring partners. The findings further showed that doctors perceived continuous research for more effective drugs; research on emerging diseases and cures, lobbying government to spend more on health as important in merged pharmaceutical companies. They also felt that social responsibility to deal with problematic health issues was applied to some extent by the merged pharmaceutical companies thus influencing their expectations. It was concluded that merged pharmaceutical companies are product and market oriented. However it the product range and perceived lower costs that impact more on the doctors. They are also domineering and arrogant implying that the company's image was found not to tally with the public's expectations. Product advertising and patient's choice were considered unimportant. Merged pharmaceuticals companies were found to apply continued research to better effective drugs and research on emerging diseases and cures. Doctors agreed that merged companies had less products overlaps and operating costs. However, unethical marketing and promotional tactics were found be the main barrier to mergers thus affecting the doctors' decisions on prescriptions. The researcher recommended that merged pharmaceutical companies should strengthen their service delivery and portray a picture of caring and being socially responsible and involvement in corporate social responsibility. It was further recommended that recommended that merged pharmaceutical companies strengthen their involvement with research and advertising and promotion especially from the media.