Case Study of a TNC – GlaxoSmithKleine

GlaxoSmithKline is the world’s second largest research and pharmaceutical company with 99,000 employees worldwide. It is a transnational corporation, operating and delivering service in more than one country. It produces consumer products as well as prescription products, such as Lucozade, Ribena and Horlicks. GlaxoSmithKline made £7.8 billion in profits in 2007. It has a presence in 99 cities in 39 different countries.

GSK is a UK based franchise based in Brentford, London. It also has US headquarters based in ‘Research Triangle Park’, the US’s larges research park, in North Carolina. But the company relies on research and development which is a sub department of the wider corporation with major headquarters in South East England in Greenford, Stevenage, Harlow, Ware and Beckenham, Verona in Italy, Zagreb in Croatia, Evreux in Les Ulis in France, the above stated Research Triangle Park, Laval in Quebec and various in Pennsylvania. Its consumer products division is based in Moon Township, Pennsylvania. With further R&D centres being introduced in India. Its prescription products are manufactured in the UK, France, the US, Jurong, Ireland, Poland, Italy and Romania and is consumer items in Maidenhead in the UK, Ireland, Ontario, South Carolina, New Jersey, St. Louis, Missouri and Kenya.

GlaxoSmithKline’s R&D department compiles research in to treating and preventing diseases. It mostly takes place in economically developed countries such as the UK and in the US as of the level of educated people available to work in the quaternary industry. Research takes around 12-15 years and costs over £500,000,000 to discover and develop a new medicine or vaccine. They are the only pharmaceutical company prioritize the development and research of medicines and vaccines for the World Health Organization’s three priority diseases: Malaria, HIV and tuberculosis. They also produce prescription drugs for infections, depression, skin conditions, asthma, heart and circulatory disease and cancer and vaccines. They are also looking for new treatments for other neglected diseases. More than 1300 of their research scientists aim to investigate preventative causes. They have 19 R&D projects targeting diseases normally found in the developing world, likely in an attempt to show they are not just market with the greatest wealth.

Potential new drugs are known as ‘New Chemical Entities’, discovered by mass screening different chemicals against a target to see if it is modified by the drug. If it is found to be successful it will then be assessed for its safety, toxicity and ‘pharmokinetics’ (what happens to the drug when it is administered). The potential drug may also be compared against marketed medicines. It will then be subject to clinical trials. However GKS claim that sometimes animal testing is necessary in research as without it, they would be unable to save so many lives as they do. They claim that they replace animals with other methods where appropriate, reduce the number of animals by means of new methods ad technologies and eliminate or minimise pain and distress where possible. 98% of studies are conducted on rodents or rabbits, with only 2% being inclusive of fish, ferrets, pigs, dogs, cats and primates. They have a strong animal welfare policy and animas are given the same basic rights as most pets.

When the drug goes to clinical trials, it will first be administered in phase I to healthy volunteers, often being accompanied with a placebo to prevent bias, observing it’s interaction with the body and it’s interaction with other medicines. The secondary phase encompasses administering it to patients with the illness which the drug is designed to treat. These trials are to determine the correct dosage whilst still examining safety. Phase three encompasses all the gathered data, and is an important phase which needs to be completed before regulatory agencies will approve it. Trials of medicines still continue after being approved for marketing for further safety.

GSK have factories based in central and eastern Europe with major manufacturing sites in in France, Pennsylvania and Zebulon in the US, Puerto Rico, Singapore, Ireland, Poland, Italy and Romania along with plants at Irvine, Ware, Montrose, Barnard Castle, Crawley, Worthing and Ulverston in the United Kingdom. The European correlation of these plants is evident, especially that in the United Kingdom. This is for two reasons, it is where it is based and to get inside trade barriers to reduce exporting fees. Similarly with the plants in the US to reduce shipping cost for a higher profit margin. They claim that factories were located with the price of workers in consideration, such as their move from France to Poland in 2007. Another thing considered in choosing location is the diversity of works, which they tout as being perfect. As one of their strategic policies in 2008 was to grow a diversified global business

Another part of their diversification policy is encompassed by their following statement: that “We are diversifying our business to create a more balanced product portfolio and move away from reliance on traditional ‘white pill / western markets’. We are investing in key growth areas such as Emerging Markets, Japan, Vaccines and our Consumer Healthcare business” The key thing to take from this is that they are switching the supply of their policies from the largely western developed market to the emerging ones in new developing countries. This is done by expanding the product range, from largely ones which are diseases of affluence in developed countries, to the neglected ones in developing countries.

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  • Tom

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