Analyze Abbott Laboratory's strategic response to compulsory licensing - Article Example

Company analysis Introduction Compulsory licensing refers to a situation in which government permits another organization or company to create or manufacture patent product without the patent holder’s approval (Vogel, 2007). It is believed that compulsory licensing can be employed by governments in cases of national emergencies and other situations of great urgency or for non commercial purposes. This therefore made Thailand to easily issue compulsory licensing for Abbott laboratory product, Kaletra.

Abbott however was not happy with Thailand’s compulsory licensing and reacted angrily to its action. Abbott laboratory strategically responded to compulsory licensing by publicly announcing that it is going to withdraw the pending applications for selling current medicines in Thailand. Applications for seven medicines were withdrawn by Abbott. The medicines which Abbott withdrew their applications were Aluvia, Brufen, Abbotic, Clivarine, Humira, Tarka and Zemplar. It decided not to introduce new drugs in Thailand since the actions displayed by Thailand’s government did not respect patents.

Several advantages and disadvantages can be associated with abbot laboratory’s strategic response to compulsory licensing (Baron, 2008). Strategic response employed by Abbot Laboratory proved to be advantageous since it created room for negotiation. Abbott’s strategic response made Thailand government to realize how important the organization is in pharmaceutical industry. Its strategic response made Thailand government to raise several complaints. This therefore made world health organization to intervene and discussed with Abbott on how to market its products in developing countries, including Thailand.

Abbott’s strategic response also had some weaknesses. The response had a serious effect on patients. It deprived innocent individuals who seriously required lifesaving drugs. The strategic response also showed that Abbott laboratory lacks social responsibility and only mind about maximizing its profits. Conclusion From the discussion, it is clear that Thailand easily issued compulsory licensing for Abbott laboratory product, causing the organization to angrily react. Abbott angrily reacted to the action by stopping introducing new medicines in Thailand.

This strategic response created room for negotiation and caused serious effects on patients and company’s reputation. ReferencesBaron, P. D. (2008). BUSINESS AND ITS ENVIRONMENT. Vogel, J. R. (2007). Pharmaceutical Economics and Public Policy. London: Routledge