Procurement at Betapharm Corp. Case Essay

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Pages: 8

Procurement at Betapharm Corp. (A) Notes

George Brannigan, Vice President
Doug Burke, Director of eSourcing
- Betapharm recently implemented the Emptoris ePass system, which facilitates eProcurement activities and, specifically, reverse auctions
Industry Information
- Pharmaceutical sales experienced average growth in the low teens between 1996 and 2003, single-digit growth was expected over the next few years
- Betapharm outperformed the industry
- Industry benefited from increased demand and projected future growth due to: o A growing elderly segment o Increased average life expectancy o Rising incidence of chronic diseases
- Pricing pressures from managed care and government programs and the migration to generic drugs due
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- Tao was a strategic partner in the development of Exelon, they developed the basic conversion process
- Contractual obligation with Tao ended in2 years
- Mang. Was interested in securing a low-cost supplier for the malic acid, thought Tao’s conversion rates were too high
- Due to the nature of malic acid, the new supplier would be subject to regulatory approval, which could take a couple of years
- Imperative that Tao could not be informed of the search, to avoid current supply risks
- Mang. Believed that Asia offered best options for a low-cost supplier
- Would require a transfer of chemical process technology
- 5 suppliers were identified as potential candidates for the malic acid business
- Imperative that each of these