Reference no: EM132414069

Background: ELX Labs has been an industry leader for more than a decade, having been first to market for a number of important, cutting-edge drugs. With soaring profits and the respect of competitors and shareholders alike, ELX Labs has had a good run. But darker clouds are ahead, and the manager will have to make some difficult decisions to keep ELX Labs profitable. ELX Labs faces challenges from inside and outside the company that will require strong management and smart application of game theory.

Question:

The company has had a lucrative patent on a cholesterol-lowering drug called Minichol. Minichol has been the highest-selling drug in this market for over a decade. However, GN-Tech Drugs, a rival company, is also currently producing a biosimilar drug that will challenge Minichol's market dominance. A biosimilar drug is a class of drug with a composition and results similar to a name-brand drug. The managerial team figures out the primary threat GN-Tech Drugs' new biosimilar drug poses to their position in this market. The team comes up with three possibilities and need to make the final decision.

Of the following possibilities, which do you think poses the biggest threat to ELX Labs? Select an option from the choices below.

a. Drug efficacy is the greatest threat. GN-Tech's biosimilar drug might work better and may dig into your market share.

b. Drug administration is the greatest threat. GN-Tech's biosimilar drug might be easier for patients to take, and may become more desirable.

c. Drug price is the greatest threat. GN-Tech's price point might make its biosimilar drug a more attractive alternative to Minichol.