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Case Study

The antibiotic ecosystem conundrum

By Carlos Cordon, Patrick Itterbeek, Roberto Matta, Inger Anne Torsheim and Brigitta Voss

14 pages

December 2020

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Reference: IMD-7-2132

The invention of antibiotics increased the average lifespan by two decades, though WHO warns that antibiotic resistant will become the most common death by 2050 if the resistance issue cannot be overcome. This paradox is an exemplary dilemma of the society’s urgency of creating value, such as developing new antibiotic drugs, although the value creator may not be able to capture this value in a financially profitable way. The traditional business model of pharma is broken and no solution exists yet. Several diverse stakeholders with different interests are required to find a global solution to this complex problem. While no financial model provides a perfect solution for all involved stakeholders, it is important to make progress before the antibiotic resistant bacteria have made the drugs totally ineffective. For each financial model we will describe advantages and disadvantages, provide financial analysis and describe the implications for the ecosystem. Further, the different business model canvas from the view- point of a pharmaceutical company investing in antibiotics R&D. As the business model canvas is limited with providing the multi-dimensional overview of the stakeholders in the eco-system and their interaction, an approach to reflect all stakeholders in one table is provided.

Learning Objective

Understanding a complex example of a broken ecosystem involving several stakeholders in a global healthcare system.
Understanding of how to apply the business model canvas in an atypical context. The fact that is does not work well in this context, enables the students to realize the complexity of the situation and also why there is currently no solution.
Teach about economic incentives within healthcare.
Teachs organizational theory.

Keywords

Finance, Strategy, Antibiotic, Antimicrobial Resistance, Stakeholder, Ecosystem, Net Present Value, Business Model Canvas, Drug Development, Impact Investment, Broken Value Chain, Organizational Theory, Externality, Healthcare

Settings

World/global
Novo Nordisk, World Health Organization, Healthcare, Healthcare, Pharmaceuticals
2017 – 2018

Type

Field Research

Available Languages

English

Related material

Teaching note, Video

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