The Implication of Theories of Activity for Management of Operation - Essay Example

The Implication of Theories of Activity for Management of Operation The development, launch and the subsequent commercial performance of the “painfree” drug cannot be ruled out as an outright failure. However, the extent of its success, especially after the initial months in the market, is dubious. Certain pertinent issues must be examined before deciding the extent of its success. The issues that need to be evaluated are: Development of the drug, it’s potency in healing, mitigation of side effects as an incorporated feature?(considering the severe toxic, sometimes fatal side effects of other normoramide drugs) Marketing strategies, managerial errors compounded by independent decision making and lack of transparency. Long-term profitability of the company. Whether the initial commercial success was sustainable? Development of a promising drug or distorted facts? The development of this drug was seen as a medical breakthrough in the domain of synthetic morphinomimetics.It was basically a non-addictive analgesic drug which could be taken orally and helped in reducing post-operative, rheumatologic pain and migrane.Traditionally synthetic morphinomemetics have severe toxic side effects which rarely can become fatal. Hypotension is a characteristic of these drugs in addition to liver cirrhosis(because of high levels of toxicity) and urinary retention.Painfree was regarded as promising because it had some advantages over other brands of morphinomimetics,namely;liver problem was considerably managed, no sign of tetramoraide syndrome was found and it’s effectiveness in obliterating pain was instant and exceptional, though hypotension could not be dealt with(and this was not conveyed to the consumers aka patients). In1993, 17% of the patients showed signs of orthostatic hypotension.1 Evidence suggested that Normoramide was the cause. A team led by Roland Peterson had worked tirelessly at eradicating the fatal liver problem but during the course of improving the drug, it was established that hypotension could not be dealt with. Painfree indisputably was a significant breakthrough especially considering the miraculous pain relief it provided, and appeared to be potential ‘commercial blockbuster’. However, orthostatic hypertension could not be obliterated (as it was conveyed to the prospect consumers) and to this extent, it can be alleged that the company misled the consumers. In addition, the ‘innovation’ in the drug becomes questionable. Managerial errors and the non-disclosure policy. The management omitted some very pertinent facts about the drug, which if they were known would have affected consumption decision of the patients. The instances of non-disclosure can be enumerated as follows. a) In 93, out of the patients tested with the drug 17% exhibited hypotension.2 The management sought an alteration of guidelines and after it was affected, these cases were written off as ‘occurrences prior to alteration” thus were disregarded. It must be noted that there was no alteration in the chemical composition of the drug and its medicinal effects would still be the same. The consequences of the omission of this fact would have serious consequences. Technically, it did not amount to any violation, but it was non-disclosure of the side effects of the drug, fearing negative impact on potential sales. However, the ‘potency in healing’ was highlighted and celebrated-misleading prospective clients. b) Orthostatic hypotension was an established side effect sans doubt and it was in the knowledge of the management. A warning was added to the packages “to avoid physical activity and increased stress during treatment.”3 This warning was not highlighted in the promotional material and was not given the due weightage in the package. Indications about hypotension were absent altogether, atleast initially. c)During the promotion of the drug doctors were informed about liver cirrhosis(which had been combated and posed no threat) but hypotension as a side effect was not given the due weightage,neither was the incidence of it’s occurrence during the tests mentioned(as that could endanger sales prospects). Was the commercial success sustainable? Phenomenal sales were recorded during the first few months.7, 00, 000 packages were sold during Nov 94 to march 95 in Germany alone.4 The expected liver related complaints did not arise during the first quarter. However, cases of hypotension were reported and reached alarming levels during April/May, when people usually start taking up sports. Nine months after the launch in China, reported cases of hypotension increased drastically. Mid July, sales had dropped to half than that of Jan.5 Some cases were more serious than just dizziness including fainting and cardiovascular collapse. The German Authorities felt compelled to reinforce warnings about orthostatic hypotension, but it was too late. The final comedown was underway. The cases reported to LGA’s were far more serious than those reported to Planomed, for example, some patients had collapsed in public places. Finally, after much deliberation the authorities requested the withdrawal of the product from the market. The governing corporate objective in this case seems to be value maximization, disregarding social responsiblty.Overrisding commercialization proved inconsistent with a pharmaceutical company’s responsibility, as it jeopardized public health. The profitability was also not sustainable either, because it involved distortion of facts. The bubble had to burst. Answer#2. The procedural organization and management of the project had a decisive role in shortening the life of the brand and it’s eventual, inevitable exit from the market. The shortfalls in innovation of the drug had become apparent during the product development stage, but instead of addressing those inadequacies, the management overlooked them and pursued the market launch. The fact that, orthostatic hypotension posed an adverse side effect was brushed aside, and its consequences were incalculably underestimated.Morever, the company resorted to the non-disclosure policy and misrepresentation of facts. Accurate information, the consequences of consumption and side effects were withheld from the patients. I reckon, these two were the fundamental miscalculations compounded by series of managerial errors that led to the failure of the project. The ‘thermostat model’ theory affords an interesting insight into quality control during the product development stage. The main idea contained in the theory is that the development stage should comprise hypothesis, experiment, and validation of the hypothesis. According to the outcome of the experiment, improvements should be made in the product and it should be amended.(Shewhart and Deming 1939) In this case, the experiment did not validate the hypothesis’ie the shortfalls in the drug were apparent after the trials, but were not taken into consideration. Shortcomings during the product development stage.Painfree was another synthetic morphinomimeltic,a non addictive analgesic drug which was extremely effectual in providing pain relief, especially post operational pain and migrane.Synthetic morphinomilmeltics had very limited usage because of high levels of toxity and harmful side effects which included orthostatic hypotension. This state entailed dizziness, loss of co-ordination to collapse of the cardiovascular system.Pinfree was an innovated version of normoramide.It had a marginal advantage over other normoramides.Harmful side effects like liver cirrhosis had been obliterated and there was no sign of tetramoramide syndrome either. However, the characteristic effect, hypotension still posed an adverse side effect. It could not be dealt with. This deficiency would become apparent much later and would be the chief reason for failure.Quintessentially, there was no “innovation”, merely distorted facts. Autonomous functioning or lack of transparency? Another noteworthy feature in this case is that after the acquisition by Alpex, the Painfree team remained relatively independent in its corporate decision-making. There is an unmistakable correlation between autonomity and lack of transparency here! No other project in the history of Alpex was managed thus. Lack of complete accountability facilitated misrepresentation.This, in its own respect was a flaw in the organization of the project. Misrepresentation: During the clinical trials, the problem of toxicity and hypotension had surfaced. In 1993, seventeen percent o the volunteer patients exhibited orthostatic hypotension, in the US market.6 The cause was also confirmed:normoramide.These findings were disregarded by the management, or even if they were taken into account they were not conveyed to the prospective consumers. Obviously, an explicit warning would have endangered the sales! In compliance with the law though a warning was included in the package (it was assigned the second place). “Avoid physical exercise and increased stress during treatment”7 Any consumer (patients) would easily mistake this for a non serious precautionary warning. It does not suggest the serious consequence in any way. It appears more like a general advice. Non-complaint patient behavior was grossly underrated and the consequences were either overlooked or terribly underestimated. To that extent, this warning can also be called misleading. However, no mention of orthostatic hypotension was made in the promotional materials. “The 100 page booklet that was distributed in the market campaign, mentioned the issue peripherally.”8 “Orthostatic hypotension was described as a rare event being comparable in frequency to other synthetic morphinomimeltics.Safety recommendations were given after warnings about allergy and indigestion.”9 Steeply falling sales curve: Sales volume during the initial months were very impressive.Painfree had fulfilled its ‘blockbuster potential’ No complaints of liver cases arose. However, hypotension cases occurred with unerring regularity. As the volume of sales increased, the complaints also starting pouring in. Two months after the launch the numbers of reported cases were becoming worrisome. The complaints reached their acme during April/May when the people started taking up sports. The cases reported to LGA’s were more severe than those reported to Planomed.Within six months sales had plummeted to half. Even at this stage, the management did not highlight the warning on the package; they merely informed the sales persons about the incidents. The product had lost the consumer’s confidence. Any defective, sub standard or misleading product would. Overriding commercialization and irresponsible pursuit of value maximization: Pharmaceutical companies, voluntarily or involuntarily carry a colossal social responsibility. Their strategies and products are inextricably linked with public health. It is perfectly legitimate to enlarge profits, but to jeopardize public health in the ruthless pursuit of profit is unacceptable. In the bargain, the company’s credibility and profitability are also shaken. This is exactly what happened in this case. The harmful effects of the drug were concealed and it’s potency in healing was highlighted. Eventually the product had to be withdrawn from the market, leaving the company’s reputation blemished. Answer#3. The fundamental errors in this case have already been pointed out and eluciadated.If the company had to launch another drug, the most important remedial measure in my opinion, is to set up an independent body to verify the results of research and product development. A body comprising experts but non shareholders/stakeholders who can give an unbiased and accurate judgment about the marketability of the drug. The judgment of the management who are the shareholders also, is likely to be predisposed. Experts can examine the properties of the drug, draw inferences from the clinical trials, and then pronounce whether the drug should be launched at all. Early in clinical trials phase, when the drug was being tested on volunteer patients, the findings confirmed adverse side effects of the drug, but the management overlooked the results. Had they been taken into account the course would have been different altogether. Here it would be appropriate to look at the two facets of the methodology of management (more accurately project management).Management-as-planning and Management-as–organizing. The first approach propagates that planning is paramount and all pervading in the functioning. However, the managing-as-organizing model has presented several strands of critique against the planning model. Most important being that, separation of planning and execution are inconsistent with the broader functioning in an enterprise. (Johnston and Brennan1996).It is difficult to point out that which flaw was bigger in the Painfree case, the myopic planning strategy or the essentially flawed execution of launching a improper drug.Nevertheless, it can be maintained that erroneous excution,faulty planning and lack of co-ordination between the two is apparent in this case. Any form of non-transparency in decision-making should not be tolerated. Corporate decisions have far-reaching effects, both for the fate of the company and the masses. Decision-making should not be vested with a handful of individual. This case was peculiar in the history of Alpex.The team did not consult other wings of the company before arriving at strategic decisions. The fact that it was tolerated, perpetrated the problem.Unsuccesful clinical trial results were disregarded. Considering them would have reinforced the shortcomings of the product. Failure of the drug can also be attributed to excessive autonomity in decision-making. It was a lethal error of judgment to assume that the drug was marketable with its side effects. Consumer’s confidence is paramount in determining the success of a brand, drug or any other product. It is important that accurate information about the product should be conveyed to the prospective users at the right time. For instance, the properties, side effects, directions for use and precautions should be explicitly stated in the label. In case of painfree, the warning (which was supposedly indicative of hypotension) that appeared on the label looked like a general advice and hardly suggested adverse consequences of usage. It simply stated that physical activity should be avoided during treatment. This was an understatement, because the consequences of strenuous activity were not hinted, and the warning was not highlighted. Lastly and most imporatantly, short-term profit goals of a company should be integrated with long-term sustainability and safeguarding public health. Although this is remedial suggestion has more to do with principles than procedure, but it is very pertinent in this case. The market bust was not an outcome of flawed product development alone. References Painfree case study. Based on a case written at INSEAD. 1,2,6 Painfree case study,p-4 3 Painfree case study,p-4 4 Painfree case study,p-6 5 Painfree case study,p-7 7 Painfree case study,p-4 8,9 Painfree case study,p-6 Shewhart, Walter A and Deming Edwards.1939.Statistical Methods from the viewpoint of Quality Control. The Graduate School.155 p. Johnston,RB and Brennan,M.1996.Planning or Organizing: The Implication of Theories of Activity for Management of Operation.Vol 24.p-367-384. Read More