The purpose of this thesis is to examine the US diabetes market to get a complete overview of Novo Nordisk’s future ability to compete and increase its earnings. This will be done by an external analysis of the US macro environment and institutions combined with an internal analysis of Novo Nordisk’s core competencies, resources and an analysis of the competitors and its portfolio. US has for a long time been Novo Nordisk’s most important and profitable market but due to increasing competition from competitors and Pharmacy Benefit Managers (PBMs), they are facing a rough time. The increasing competition made them lower their expectations for the US market which made their stock-level fall more than 20 % in 2016. The healthcare expenses for US has been increasing over the last period of years. More specific for diabetes the total cost in 2017 were 2.000 million kroner which made Donald Trump threat the entire healthcare industry with lower prices on medicine. Compared to 2012 the total expenses for diabetes treatment have increased 25 %. Increasing prices also mean increasing profit, or? Not really. The complexity of the US healthcare industry is very big. The supply chain consist of a lot of chains where both private and public buyers are involved, through different healthcare programs. In general all sales on description medicine, such as diabetes, go through some kind of purchase organization. These purchase organizations are called Pharmacy Benefit Managers (PBMs) and Global Purchasing Organizations (GPOs) and buys medicine for pharmacies, hospitals etc. They are the one responsible for negotiating rebates with the original manufacturers such as Novo Nordisk. The problem with this setup is that each chain in the supply chain want to make profit on each transaction. So in theory a PBM can negotiate one rebate with Novo Nordisk and afterwards give a lower rebate to the pharmacies and keep the difference, which of course is pure profit. This dilemma has been an increasing issue as the PBM’s and GPO’s have consolidated into larger organizations why their purchase power also have increased. Novo Nordisk’s total rebates in 2015, 2016, 2017 was 56 %, 59 % and 64 % respectively.
|Educations||Graduate Diploma in International Business, (Diploma Programme) Final Thesis|
|Number of pages||85|
|Supervisors||Henrik Johannsen Duus|