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    Case Study On Bayer AG: Anthrax and Cipro: Group No. 5

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    nidhishpatel
    Bayer AG faced challenges in meeting demand for its anthrax treatment drug Cipro during the 2001 anthrax attacks in the US. As the sole producer of Cipro, Bayer's conservative approach caused distrust among US officials and citizens. Key options considered were increasing production through third-party partnerships or selling the patent, but these risked losing control or profits. The recommended solution was for Bayer to reduce Cipro prices, ensure transparency around production, and work with the US government to address supply issues while retaining the patent and reputation as the hero provider during the crisis.

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    Case Study On Bayer AG: Anthrax and Cipro: Group No. 5

    Uploaded by

    nidhishpatel
    112 views5 pages
    Bayer AG faced challenges in meeting demand for its anthrax treatment drug Cipro during the 2001 anthrax attacks in the US. As the sole producer of Cipro, Bayer's conservative approach caused distrust among US officials and citizens. Key options considered were increasing production through third-party partnerships or selling the patent, but these risked losing control or profits. The recommended solution was for Bayer to reduce Cipro prices, ensure transparency around production, and work with the US government to address supply issues while retaining the patent and reputation as the hero provider during the crisis.

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    Management case analysis

    Original Title

    Bayer Ag _Anthrax And Cipro

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    Bayer AG faced challenges in meeting demand for its anthrax treatment drug Cipro during the 2001 anthrax attacks in the US. As the sole producer of Cipro, Bayer's conservative approach caused distrust among US officials and citizens. Key options considered were increasing production through third-party partnerships or selling the patent, but these risked losing control or profits. The recommended solution was for Bayer to reduce Cipro prices, ensure transparency around production, and work with the US government to address supply issues while retaining the patent and reputation as the hero provider during the crisis.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    112 views5 pages

    Case Study On Bayer AG: Anthrax and Cipro: Group No. 5

    Uploaded by

    nidhishpatel
    Bayer AG faced challenges in meeting demand for its anthrax treatment drug Cipro during the 2001 anthrax attacks in the US. As the sole producer of Cipro, Bayer's conservative approach caused distrust among US officials and citizens. Key options considered were increasing production through third-party partnerships or selling the patent, but these risked losing control or profits. The recommended solution was for Bayer to reduce Cipro prices, ensure transparency around production, and work with the US government to address supply issues while retaining the patent and reputation as the hero provider during the crisis.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 5

    Case Study on

    Bayer AG: Anthrax and Cipro

    Group no. 5

    Analyzed by

    Executive Summary:

    After a brutal terrorist attack on 11th Sept 2001, USA was once again under a threat of
    bioterrorism.On October 5th the first case of Anthrax was discovered at American media
    Inc. at Florida.After that a series of events were reported in different parts of USA
    regarding anthrax attacks. The Drug “Cipro” was in the limelight as an exclusive and
    ultimate medicine for treatment of Anthrax.Cipro is the trade name of Ciprofloxacin
    discovered in 1981, a USDFA approved drug used as an antibiotic to treat major
    infections.After many researches it was considered to be a first line defence for
    treatment of Anthrax related infections in year 2000.
    .Cipro was produced by Bayer AG, a multinational healthcare and chemical group
    having presence almost all around the world having 350 individual units.The
    headquarter of Bayer AG was in Germany.Due to cultural differences between US and
    Germany, Bayer AG was perceived to be a reserved an conservative in US. Also the
    US media also had similar notions for the company.

    Now being the only manufacturer and supplier of the drug “Cipro” the company faced
    many problems from coping up with the manufacturing of the drug, to dealing with
    political and public relations.Citizens of US were scared and their anxiety level was very
    high. The approach of the officials of Bayer AG was conservative. As a result the
    intensons and image of the company was under question including its motives and
    ability to meet the demand of US as well as Canada.

    Dr.Manfred Schnieder, chairman and CEO of the company was in position of


    confronting distrusts and doubts of American citizens and US government who was
    thinking to rescind Bayers patent of “Cipro” considering companies inability to provide
    the drug in the market. Considering the past product difficulties of the company and
    breakage of patents by Canadian government, Dr Schneider had to decide the future of
    the company in this crisis condition.

    Statement of Objective:

    ● How Bayer AG maintains its credibility and business in the United States and
    explores the way to fulfill the demand for Cipro drugs in the challenging situation
    of bioterrorism.

    Decision Problem:

    ● How should Dr. Manfred Schneider keeps his company's credibility in the market,
    protects the trust of the United States government, and ensures protecting the
    lives of United States citizens by supplying enough quantities of Cipro medicine
    in the market?

    Decision criteria:

    ● Confront the perception of Bayer AG to be a greedy company that wants to take


    advantage of a crisis, and to maintain the credibility and trust of the United States
    Government and people.
    ● Protect patent of Cipro medicine to be used for Anthrax treatment against
    bioterrorism.
    ● Bayer to ensure supply to United States citizens Cipro drugs without shortage,
    overcoming the panic condition

    Causes of the problem:

    1. Attack on world trade center (Terrorist attack) on September 11, 2001, followed
    by Anthrax attack (Biological terrorist attack) in October 2001. That causes
    excessive anxiety and fear among people.
    2. Reserved and ultra-conservative political, media, and public relations approach
    of Bayer AG.
    3. Perception of people towards a german company and past incidents eg. sudden
    withdrawal of Kegonate without clarification.
    4. Non-transparency about the available stock of the Cipro and other related
    information.
    5. German cultured pharma company Bayer AG could not act to meet American
    culture.

    Alternative solutions:

    1. Bayer should share their Cipro drug production plan, share their present situation
    and requirements with the United States government, and take help from the
    United States government for uninterrupted production of the Cipro drug So that
    it doesn't have the scarcity of any resources. As well as the patent of Cipro
    medicine can be protected for future uses.
    2. In a Bioterrorism-like situation, Bayer should mainly focus on the production of
    Cipro drug only.
    3. Bayer should go for third-party production of the drug to increase the production
    and supply the market demand.
    4. Bayer should sell the patent to other pharmaceutical firms to meet the demand of
    the drug so that it can meet the demand.
    5. Reduce the price of the Cipro drug and gain the trust of the United States
    government and people.

    Evaluation of alternatives:

    1. It is quite possible that the United States government may distrust Bayer AD after
    seeing the plan of production and can rescind the patent, also it is possible that
    other companies may refuse to supply the required material to Bayer AG.
    2. By converting other drug plants into the production of Cipro drugs, Bayer will be
    able to manage the demand, but his business of other drugs will be highly
    affected, which may lead to revenue shortages in the company
    3. By outsourcing the production, Bayer AG may increase the production and meet
    the demand of Cipro, however there will be questions about proper quality
    checking. Third parties could not own any mishap if it happened due to drug
    consumption. With that, there are chances of pilferage of patent details.
    4. By selling the patent of the Cipro drug, Bayer can be the main centered company
    to surpass the severity of the disease. This will also help to earn huge fame and
    name in the United States Market. But in this case, the company will lose its
    chance to convert crisis into opportunity, including business opportunity.
    5. By reducing the price of drugs, the bulk of medicines will reach common people.
    And it will be helpful for the future growth of the company.

    Recommended Solution and action plan:

    ● Bayer should reduce its selling price to the Federal government and should
    clearly show its concern and stand for the crisis. Bayer AG should grab the
    opportunity to be considered a hero. CIPRO (Ciprofloxacin) was discovered in
    1981 and already a big seller drug for the treatment of a big range of serious
    infections. With that, if they remain conservative then they may lose Patent also
    as they lose sales in the Canadian market.
    ● They should approach the US government with this approach and ask the US
    government to help for any production-related problem in order to overcome
    manufacturing constraints. Looking towards a positive and American citizen
    centric approach of the company, US government may provide adequate support
    in manufacturing of “Cipra”
    ● They should come out with a transparent approach and should clarify their stand
    that they are going for aggressive and increasing its production. Reduced prices
    will show that they are not profit-making from terrorist activity. That will build a
    strong image, will retain its patent, and reserves its sell as it is the only producer.

    Contingency plan:

    ● Bayer AG shall go for legal protection for their Cipro medicine patent so that any
    Government can’t interfere with it and in the meantime, they also ensure to
    supply sufficient quantities as per demand at optimum price.

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