Transcript Lilly - 2006

In France
Best in France Case study September
2006 – December 2006
By Thiébaut KELLER, Céline LEBLANC, Antoine LEPRETRE
Outlay
Lilly’s overview
Specific issues of the pharmaceutical
sector
Why and when did Lilly come to
France
Main constraints in France
Eli Lilly Co. Overview
Eli Lilly & Co.
Major drugs introduced
Source (11/06
figures) :
http://www.lilly.co
m/about/highlight
s.html
Eli Lilly & Co
•
•
•
•
•
•
•
Founded in May 1876 by Colonel Eli Lilly in Indianapolis, USA
14.6 billion $ net sales in 2005
41 854 employees worldwide (19% in R&D)
Clinical research in more than 50 countries
Research and development facilities located in 9 countries
Manufacturing plants located in 13 countries
Products marketed in 143 countries : Lilly’s performance
influences these economies
Source :
http://www.lilly.co
m/about/highlight
s.html
Major drugs introduced (1/2)
• Prozac®, which revolutionized the treatment
of depression
• Zyprexa®, breakthrough product for
schizophrenia and acute mania associated with
bipolar disorder
• Cialis®, a new treatment for erectile
dysfunction
• Gemzar®, for pancreatic and non-small-cell
lung cancer, one of the world's best-selling
oncology agents
Source :
http://www.lilly.co
m/about/highlight
s.html
Major drugs introduced (2/2)
• Humatrope®, therapy for growth
hormone deficiency
• Humulin®, human insulin, the first
human-health-care product
created by biotechnology
• Ceclor®, which became the world's topselling oral antibiotic
• Iletin®, the first commercially available
insulin product, in 1923
Lilly France
Overview
Institut Lilly in France
Overview
• Headquarters in Suresnes (92 Hauts-de-Seine)
• Fegersheim’s plant (Alsace) : main production factory of the
group’s subsidiaries, supplier of 126 countries all over the world.
•
•
•
•
2,02 billion € net sales (1,53 billion € from exports)
2980 employees : 4th most important subsidiary of Eli Lilly
10th best employer in Europe (Hewitt)
4th “great place to work” in France in 2005
“Institut Lilly” in France
• Established in 1990
• 2 goals :
– Supporting clinical research
– Delivering educational and training programs to health
care professionals and patients
• Has provided grants to 250 researchers
• Has delivered 90 training courses (90,000
professionals)
– Specific courses for hospital pharmacists
• Ex: Aims at destigmatizing schizophrenia
Lilly’s values
3 main values
Lilly’s values in France
3 main values
• Respect for people :
– Employees, customers, shareholders, partners, suppliers
and communities
• Integrity
– Highest standards
• Search for excellence
– Continuous search for ways to improve the performance
• Global values but adapted to each country to take
into account cultural and corporate specificities.
Lilly’s values in France
How do Lilly’s global values
adapt to France?
• Example: Search for excellence:
– Means being #1 in the USA
– In France, it means excellence in methods and
work quality. Being #2 doesn’t really conflicting
with the search for excellence.
Specific issues of
the pharmaceutical sector
Clinical trials : specific and strict regulation
Research and development
Responsibility
Clinical trials : specific
and strict regulation
Discover
y/Preclini
cal
Testing
Years
6.5
Assess
safety,
biologica
Purpose l activity,
and
formulati
ons
5,000
compoun
Success
ds
Rate
evaluate
d
Phase 1 Phase 2 Phase 3
S
e
n
d
t
o
F
D
A
1.5
2
3.5
Determine safety and
dosage
Evaluate
effective
5 enter
ness,
trials
look for
side
effects
Monitor
adverse
reactions
from
longterm use
FDA
S
e
n
d
t
o
F
D
A
Phase 4
1.5
Review
process /
approval
:1
approve
d
L
A
U
N
C
H
Addition
al postmarketin
g testing
required
by FDA
• In France : “Autorisation de mise sur le marché”
Research
and Development
• R&D expenses :
–
–
–
–
$2.7 billion
R&D development laboratories in 9 countries
Clinical research in 60 countries
20% of turnover invested in research
• Necessity to discover breakthrough products, thanks
to medical expertise, in order to finance research for
new drugs.
• Recruit and retain the highest quality employees is
critical to success in this sector
Responsibility
• To act responsibly and consistently :
–
–
–
–
Observing and complying with the laws
Set standards in operations
Greater transparency on trials (www.lillytrials.com)
Quality : people’s lives at stake : stakeholders trust
is needed for the business to operate
– Work with WHO
– High standards in ethical behavior (social
responsibility report)
• Health, safety and Environment program (3 points)
Why and when did
Lilly come to France
A strategic location
Quality workforce
A great market
French health care system
A strategic location
• Plant in Alsace region: close to Germany, the
first pharmaceutical market in the world
• At the center of Europe:
– Infrastructures
– Well served by transportation : roads, airport, train
• Close to European institutions
• Headquarters in Suresnes (92), near Paris:
– Close to institutions and agencies (AFSSAPS,
etc.)
– Close to La Défense business district
A quality workforce
• Skilled and well-educated employees
– Numerous students in pharmacy
– Public research facilities: INSERM
• High productivity
– Productivity higher in France than the productivity of other
plants of the group
• Low absenteeism in Fegersheim
• France is a net-exporter of high-profile executives
within the group
A great market
• France is a very attractive market :
• more than 19 billion € in 2001
• US $2903 per capita vs. US $2307 in the OECD
• 340 doctors per 100 000 inhabitants
• The French spend a lot of money on
medicine : they rank second within the
OECD.
French health care
system
• Social security / High governmental investments
• 76.3% of health expenses paid by the government
• French doctors and hospitals are early adopters of
new drugs
• In 2001, 38% of the turnover made with prescription
drugs launched less than 10 years before vs. 26% in
Germany
• Prices are not the lowest in Europe (close to the
mean)
Main constraints
in France
Social forces and regulations
Mentalities
The Judiciary
Administrative
Social forces and
regulations
• 35h work week
• Everything needs to be negotiated : high
risk of strike.
HOWEVER
• Fegersheim’s plant is not syndicated. So far
0 day of strike.
Mentalities
• New employees are carefully selected to fit the
corporate culture
• “Win-win” concept doesn’t always seem to be
fully understood by the French
– For example: new drugs will help the social and
economic development of France and create value for
Lilly
– BUT it is sometimes only seen as a new cost for the
Social Security
Judicial
• The French society has become very riskadverse (risk of punitive damages) :
– “Principe de Précaution” is widely spread. Safety
expectations are very high.
– But in pharmaceuticals risk-zero does not exist
• Nevertheless, no class actions in France yet
• Difficulties for foreigners to understand the
protection of unionists by Work Law.
Administrative
• Many governmental agencies with whom Lilly must
continuously negotiate: AFSSAPS, etc.
• A lack of freedom to communicate about the products
(whereas the lab knows its drugs the best)
• Sudden and unexpected political decisions (new
taxes, etc.) in spite of annual contracts with firms.
• Very long approval process for new drugs :
• Usually 2 more years to get approval of new drugs
(“Autorisation de mise sur le marché”) than in other countries
Perception of French issues by
American chief executives
• Difficulties understanding both social and
political phenomena
• But pragmatic approach :
– Relative Autonomy of French staff
– Everything is controlled and measured, including
the mood of the workforce
– Freedom as long as indicators remain as good as
expected
Prospects
• Lilly keeps on investing in Fegersheim
– Factory improvement and enlargement :
Between 1998 and 2003, number of
employees from 900 to 1800 : multiplied
by 2.
• Philippe DEFOSSES, Director of corporate
affairs
13, rue Pagès - 92158 Suresnes Cedex
[email protected]
« Lilly believes that strong economies
[NDLR: like France!]with a priority on human
health [NDLR: like France!] and educated
population [NDLR: like the French!] will yield
the ultimate health care solutions »