Strategy Implementation Assignment

Strategy Implementation
Knowledge Management in Hikma
Pharmaceuticals – MENA
Samer Jalal – 23rd of February 2018
GXMBA May 2017

1. Introduction1
Hikma Pharmaceuticals PLC (Hikma) (LSE: HIK) (NASDAQ Dubai: HIK) (www.hikma.com)
was founded in Jordan in 1978 and became public-shareholding company in 2005.
Hikma develops, manufactures and markets a broad range of branded, non-branded generic and
in-licensed products and operates in the US, Europe and across the MENA region. The group
revenues through time is detailed in the below chart.
Considering the below table, Hikma operates 35% of group revenues in MENA and has nearly
6000 employees in this region. In addition, it has local manufacturing plants in eight MENA
countries and sales & marketing teams across 18 markets.
The current strategic priorities of the group are detailed below.
1 Source: www.hikma.com
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1.1 Business Challenges
There are certain key challenges that Hikma need to consider in its strategy:
- Cost pressures on the industry arising from less number of new molecules/products in
addition to several new economical/political and social factors in MENA.
- Rising customers’ expectations: Health care payers are expecting new treatments that
economically and clinically optimal leading to better healthcare outcomes.
- The need for more responsive supply chain to accommodate the increasing complexity
and in adaptation to changing patients’ and healthcare providers’ expectations.
- Information and visibility as Hikma needs to change from black-box system to
information highway
- New and frequent regulatory guidelines
- Brand loyalty is weak, and the sales is achieved through relationships in addition to
providing discounts and bonuses.
These challenges require amendments on the strategy and business model by zooming in towards
patients’ and payers’ expectations and increasing the agility of the organization towards
adaptation and more importantly to lead the clinical transformation in MENA.
2. Business Model Analysis
2.1 Current Status
Similar to other generic pharma (GX), Hikma business model is characterized by the production
and selling generic drugs that are comparable to branded drug product in dosage form, strength,
route of administration, performance and intended use. This is achieved through reverse
engineering of the drugs invented by the big Pharmaceutical companies and sold at lower costs.
GX companies sell these products primarily to drug wholesalers and retailers, hospitals and
government entities (Source)
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The current business model of Hikma Pharma is based on FIPCO model (Fully Integrated
Pharmaceutical Company) in which the company is active at all points of the value chain (R&D,
manufacturing up to commercialization). In addition, Hikma has alliance agreements with
different global partners to manufacture, market and sell licensed drugs in MENA region.
Hikma’s business, similar to other competitors, is mainly built on relationships and competitive
prices. Hikma sales force approach key physicians, health care organizations and key consultants
to introduce the drugs with continuous follow up visits on these parties to encourage writing
prescriptions containing Hikma drugs. Below figure explains the industry value chain.
As the company needs to react to the business challenges mentioned above (1.1), the healthcare
industry is also challenged with new business trends with emphasis on digital transformation and
the patients/customers are becoming smarter in choosing their treatments. Thus, Hikma needs to
leverage such new trend through a new business model that enables knowledge management and
collaboration as a way to differentiate its value from others.
2.2 Suggested Business Model
The move in the global healthcare industry is towards value and quality rather than quantity and
volume. The value/quality is anticipated as outcomes per cost and there is tremendous focus on
this direction being witnessed in several global countries.
The new business model needs to capture value through adopting patient-centric strategy in
which the patients are in the middle of the healthcare value chain and this would lead to the
necessity of increase in the collaboration between industry healthcare organizations in addition to
payers, universities, government agencies along with the software providers.
Hikma and other healthcare providers need to collaborate and achieve their objectives together.
Such model can be facilitated through incorporating of knowledge management strategy into the
business strategy (Source)
Hikma Physicians/
Hospitals
Patients/
Customers
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