GlaxoSmithKline (GSK ) is one of the largest pharmaceutical companies worldwide.

In 2023, GSM`s response to different viruses has been one of the broadest in the industry with 3 potential treatments. It provided priority to boost actions in its supply chain to deliver more products that are in high demand.

GlaxoSmithKline GSK, achieved high revenues & a great market share in both developed & developing economies.

Compared to its few rivals : Pfizer, Novartis & Sanofi Aventis, GSK has a comprehensive policy for access to medicines. It built relationships with governments & other stakeholders especially in developing nations. GSK has a leading position in genetics & in new drug discovery technology. It also is research based & has a broad range of products of special importance to poor countries.

GSK identified 3 areas for its effective contribution: R & D for diseases in underdeveloped nations, sustainable ways of thinking & community investment.

GSK has 2 main business divisions : pharmaceuticals & consumer health care products.

GSK is an innovative company that conducts effective R &D , 15,000 employees work totally in R & D. They link the outcome of their work to the production processes . GSK encourages workforce diversity, gender equality & offers healthy working conditions to boost the efficiency of all workers & productive entrepreneurs.

GSK works to increase the diversity of its supply chain to cut down costs of production.

GSK`s innovation ensures that its products are well evaluated & tested on safety, effectiveness & quality.

Direct to Customer (DTC) advertising is an important element of GSK`s marketing strategy. Customers who receive information through DTC tend to request specific brand name medicines to their physicians. GSK is also implementing sales force excellence, Its agents improve the already good reputation of GSK`s products among health care professionals. GSK was able to create a large market share in the digital era & the mobile internet phase as it noticed the importance of the consumers` influence & the new concept of " prosumers".

GSK also started a marketing excellence initiative to reduce the number of patients that do not seek the help of a doctor & remain undiagnosed & the number of diagnosed patients that remain untreated. All the previous measures led to a great demand increase that was even higher than the supply rise. In addition , the price elasticity of demand for its products recorded a value less than one.

GSK`s innovation ensures that its products are well evaluated & tested on safety, effectiveness & quality.

The human capital of GSK was measured to be the highest among its competitors. 4 GSK scientists have been recognized by the Nobel Committee for their contribution to basic medical science . In addition GSK was capable of shifting its resources among different productive alternatives . The price elasticity of supply of its products registered a value of more than unity.

GSK had a huge market share in 2023 . Despite a rise in prices of its products , yet GSK was able to boost its revenues.

Read the previous case then answer the following:

a) Using microeconomic analysis , analyze GlaxoSmithKline pharmaceutical market in 2023 ( comment on demand forces, supply forces, price elasticity of demand, price elasticity of supply, prices & revenues & market structure, some of the characteristics of the digital transformation era stated in the case study) cite evidence from the case in your analysis.

b) Who would bear the majority of the tax burden if the government imposed an indirect tax on GSK`s products in 2023 ? Why?

c) In 2023, GSK increased the quantity supplied of a certain health care product by 40% , when its price increased by 5%, what was the value of the price elasticity of supply?. Comment on the value.

d) In one of the pharmacies selling a certain GSK medicine, it was noticed that the total spending of the consumers did not change despite a rise in price. What can you conclude?

e) One of GSK`s agents in Egypt recorded the following data regarding a certain health care GSK product:

Price per unit Quantity demanded by the customers

LE 100 8000

LE 400 5000

Was the demand elastic?