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This decline in rate is the consequence of increased pressure on drug margins because of diminishing price flexibility, slowing rate of innovation, and increased competition within the drug class and generic rivals. Moreover, the cost of developing a pharmaceutical product has increased 299% over the past 5 years. Similar trends are seen in the cost of manufacturing; 60% increase as a percentage of sales by the year 2000.
The current manufacturing strategy implemented involves designing and building specialized plants. However, due to the declining market, increase costs and reduced share price Eli Lilly must implement a new manufacturing strategy in order to remain competitive within this market...
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