Mylan SWOT and PESTLE Analysis

Strength

1. Expertise in generic medicines sector: As per the Center for Justice & Democracy, New York Law School, 80% of every medicine that is prescribed are generic, and if available with the drug supplier, generic medicines are preferred 94% of the time. Hence, there is fierce competition in the generic industry. Still, with 58 years in the generic sector, often among the top five firms to produce generic medicines in terms of revenue, Mylan has a lot more experience and expertise in the field with respect to most of its competitors. Mylan also produces its own branded medicines. Soon after the patent period, they sell the same medicine’s generic to gain first-mover advantage at pricing. Their strategy to merge or acquire with other generic competitors helps them to avoid price-wars which is quite common in generic pharmaceutical industry. With 35,000 employee-base, Mylan is growing its generic research and development centers around the globe. Because of their strong and committed employees from same countries, and partnership with Indian (and other emerging markets) companies which particularly specialize in generics gives them a deeper insight into customer spending power and the need for generic medicines in the market.

2. Diversification and broad portfolio across products, markets and channels: Mylan products are sold all over the world. The revenue distribution is as such: North America – 40%, Europe – 35% and Rest of the world – 25%. Their global network of 47 operation facilities with state-of-the-art processes and systems enable them to supply efficiently to the global market. Mylan has diversified its product portfolio to provide cure for several health problems and diseases. They have more than 7500 products across franchises such as CNS and anesthesia, gastroenterology, oncology, respiratory and allergy, dermatology, women healthcare, infectious diseases, cardiovascular, diabetes and metabolism etc. They have 2500 more products in the pipeline with increased focus on medicines for infectious diseases, anesthesia and oncology. These products come in three types: Branded or physician prescribed medicines, Generics and Over-the-counter medicines (endorsed by physicians). Mylan is popular for its generic medicines in North America and other countries. In Europe, its branded medicines have a greater market. Important stakeholders in distributing these medicines include wholesalers, public health systems, individual pharmacist and physicians. Their generic market is driven by the cost-benefit analysis of public health systems of various countries. Physicians and wholesalers help in the selling of branded medicines. They distribute the products through wholesalers, retailers or through e-commerce. They also collaborate with hospitals and institutions directly through unique package offerings. Their vast portfolio of products and offerings with deep penetration into major markets and countries helps them stay ahead of the competitions.

3. Strong business model with collaborations and partnerships: Mylan has a vision to meet the unmet needs of the patients globally by ensuring access to quality medicines at the best possible affordable prices. To achieve this feat, they try to constantly innovate. They plan in long-term relation with their clients and end drug dealers. Hence, they give importance to reliability and excellent service to the customers. They have partnered with American schools through the Government-backed EpiPen Law so that all the students have access to anti-allergy medicine Epinephrine at the time of emergency. Mylan communicates their zeal to go for the right thing rather than the easier way out through their mission statement. To drive access Mylan has built a huge diversification into the commercial, operational and scientific platforms. This increases the durability of their business model through increased product complexity, penetration into more than 165 countries, using several types of channels such as tender, retail, hospitals, schools etc., a long product portfolio, and mix of branded and generic products. Better health for all stakeholders is what Mylan aims to achieve through its global social responsibility.

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Weakness

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Opportunity

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Threat

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Political

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Economic

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Social

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Technological

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Legal

1. on pricing of medicines: As per economics of strategies, when homogenous products like generics are sold and there is a capacity constraint, companies tend to go into price-wars. To avoid the price-wars, they implicitly collude or take the merger and acquisition route. Mylan is an expert player in this market. They have acquired and merged with generic wings of major pharmaceutical companies to keep producing quality generics at low price. Yet, few of their pricing strategies in the past has attracted legal scrutiny from Federal Trade Commission (FTC). FTC impacts the pricing strategies of the companies. They promote protection of the consumers and social welfare. They make the market competitive and ensure that consumers can avail important medicines at lower cost. Mylan had increased the price of few generics from 5% to 50% of the branded medicine’s price. After FTC’s intervention, Mylan paid a total of $147 million to settle the case. FTC had a huge role in stopping the excessive price rise of EpiPen. As a result, Mylan was fined severely and the cost of EpiPen has been brought to half. Mylan’s monopolistic approach to the market is in critical observation of FTC.

1. Uncertain regulatory environment: Mylan has received a lot scrutiny and media coverage from regulators and Government agencies due to their pricing practices in 2018. These external stakeholders have raised serious allegation against the firm which has a negative impact on its business. In the USA, both House of Representatives and the Senate have held hearings for the pharmaceutical drug pricing and the anti-competitive behavior and collusion among the pharmaceutical companies. These may lead investigation into Mylan’s pricing strategies. The final outcome of these investigations cannot be determined at this stage which shows how uncertain the generic drug industry environment is right now. Due to new competitors and social pressure, Mylan has faced pressured to decrease the prices of certain products which has impacted its revenue and profitability potential. The regulations may cause harm to company’s reputation, reduce its brand’s acceptance in the market, demand for its products, and increase pressure on the senior management to mitigate the litigations rather than focus on their mission.

Environmental

1. Focus on reducing wastage: Waste reduction is a major way to save our environment. Firms committed to social causes normally focus on reducing wastes. Yet, it is hard task when a firm also tries to produce quality products for its customers. Mylan, in its 58 years of history, has never compromised on the quality of the medicines. It remains the same in all of its marketing countries. It rejects in case of minor defects in its production standards, sets expiry dates sufficiently before the actual expiry. These are good measures for a healthy world. However, even after expiry, the active ingredients are available in the medicines. Mylan must initiate a return-it-back movement, so that consumers are incentivized to return back expired medicines. This will reduce cost of production and showcase their commitment to waste reduction. Furthermore, in the R&D wings and production plants, various solid and liquid waste management techniques must be used. Mylan is known for its packaging innovation for its “blue bottle”. By using environment-friendly packaging which is bio-degradable but takes more years than the medicine’s expiry date – Mylan can set another milestone and stay committed to their social responsibility.