Marketing Strategies in the Competition between Branded and Generic Antibiotics (A): Clamoxyl in 1996

In July 1996, the French social security governmental agency (the CNAM) sent a letter to all doctors urging them to prescribe generic amoxicillin instead of Clamoxyl, SmithKline Beecham’s (SB) blockbuster antibiotic. Pierre Chahwakilian, Marketing Director of SB in France must decide how to respond: (1) milk Clamoxyl and divert promotional investments towards Augmentin, a more specialized and still patent-protected antibiotic, (2) strengthen Clamoxyl’s brand equity among doctors by increasing the effort of medical reps, by launching new forms, or with new advertising, (3) go against SB’s corporate philosophy and reduce the price of Clamoxyl, or (4) change nothing and count on the resistance of French doctors towards generics. The B case (Augmentin in 2002) shows that GSK (the company formed by the merger of Glaxo Wellcome and SmithKline Beecham) now faces the same options for Augmentin, another blockbuster antibiotic. Should they use the strategy that was so successful for Clamoxyl or have the market conditions changed so much that a whole different approach should be followed?

Discuss possible strategies that brands in general, and branded drugs in particular, can use to fight generic products Provide an introduction to the marketing of pharmaceutical products Discuss the value of branding for professional buyers (expert who prescribe the product as opposed to non-expert who use or consume the product).