The global Pharmaceutical sector is worth US$300 billion and this is expected to rise to US$400 billion within three years. With 10 largest drugs companies controlling over one-third of the market, several have sales of more than US$10 billion a year and profit margins of about 30%. Of the top 10 six are based in the United States and four in Europe. It is predicted that North and South America, Europe and Japan will continue to account for a full 85% of the global pharmaceuticals market well into the 21st century. (wikipedia, 2014)
In 2006, the US contributed 52 per cent of the pharmaceutical sector's growth, while the seven emerging markets of Brazil, Russia, India, China, South Korea, Mexico and Turkey referred to as “pharmerging” contributed 16 per cent combined. This year the pharmerging economies are expected to account for 51 per cent of the industry's growth, while the US has declined to -19 per cent.
The Pharmerging Countries:-
In reviewing each of the world’s emerging economies, the upcoming major players are generally classified as pharmerging countries and further they are divided in to three tier. (money control, 2014)
Tier 1: China. With a GDP of more than $8 trillion, China is the world’s third-largest pharmaceutical market. Most of the growth in China come from branded generic products manufactured and marketed by established domestic companies, although demand for innovative products from multinational companies is rising in the country’s leading urban centres.
Tier 2: Brazil, Russia and India. These countries are each expected to add $5-15 billion in annual pharmaceutical sales by 2014. Brazil and Russia both have achieved consistent double-digit pharmaceutical sales growth in recent years, while ...
... middle of paper ...
...ogi, R. (2011). The indian pharma sutical industry: the emperical study. the emperical study, 40-48.
Schuh and compay. (2013). Operational excellence in pharmaceutical indusry. 3-13.
Jyoti Remedies. (2014, march 10). jyoti remedies. Retrieved from Jyothi remedies: http://www.jyotiremedies.com/html/index.html
money control. (2014, March). Money Control. Retrieved from http://www.moneycontrol.com/stocks/top-companies-in-wor;d/net-sales-bse/pharmaceuticals.html
reserch and markets. (2014, march 10). Retrieved from reserchandmarkets: http://www.researchandmarkets.com/reports/2043060/industry_insight_crams_contract_research
wikipedia. (2014, march 10). wikipedia. Retrieved from http://en.wikipedia.org/wiki/Pharmaceutical_industry
wikipedia. (2014, march 10). wikipedia. Retrieved from wikipedia: http://en.wikipedia.org/wiki/Pharmaceutical_industry_in_India
China, there would be a multitude of early adopters interested in checking out the product online
It is said that name-brand prescription drugs in Canada cost approximately 40% less than they do in America. But it is illegal for the transport of drugs from Canada to America. Why? It is because Pharmaceuticals are simply greedy and prey on victims that are in need of their products to survive. It makes it hard for large households on a budget to purchase drugs to keep healthy. The way pharmaceutical companies look at their clients is like this: It is a life or death situation for them so the customers have to buy it in order to survive. According to the annual Fortune 500 survey, the pharmaceutical industry, expectedly, made it at the top of the list of the most profitable. The top seven pharmaceutical companies took in more profit-money than the top seven media companies, the top seven airline companies, the top seven oil companies, and the top seven car manufacture companies. (…cost so much, CNN) The profits of pharmaceutical companies are outrageous and extreme. There are many reasons to why these companies are greedily taking advantage of customers. The number one reason is because people who are need of these prescriptions have no other choice but to purchase them.
Main Issue In 2000, Rich Kender, Vice President of Financial Evaluation and Analysis at Merck & Company was discussing the opportunity of investing in licensing, manufacturing and marketing of Davanrik, a drug originally developed to treat depression by LAB Pharmaceuticals. LAB proposed to sell the rights of all the future profits made from the successful launch of Davanrik at the cost of an initial fee, royalty payments and additional payments as the drug completed each stage of the approval process. Merck & Company's organizational goal is to constantly refresh its drug development portfolio and reach as many customers as possible during the patented period. So there was not only the potential of financial gain or quantitative aspect of the offer, but also the qualitative value which will be added by getting better positioning in the risky pharmaceutical industry.
Prescription drug prices rose three times faster than inflation in the decade between 1981 and 1991, making the pharmaceutical industry the nation's most profitable business. Prescription drugs even exceeded the rapidly rising inflation rate for all other medical services. They now represent at least 10% of all the medical costs in the United States.1
An Analysis of GlaxoSmithKline The business that I have done research into is GlaxoSmithKline. This company is a globalised research-based pharmaceutical public limited company. Its ownership structure has changed a great deal since the original company was first established in 1715. Originally a pharmacy, the company has expanded, merged with and taken over other companies over the decades.
Threat of new entrants is relatively high. Companies forming alliances are potential rivals. Even if earlier such company was not considered to be a threat, after merging with some research and development company or forming alliance with another pharmaceutical company it would become a rival to Eli Lilly. The threat is however weakened by significant research and development costs necessary to successfully enter the business. Eli Lilly’s focus on a relatively narrow market of sedatives and antidepressants weakens the threat of new entrants, but other products that form lesser part of company’s sales such as insulin and others are exposed to high threat of new entrants. The need of obtaining certificates and licenses also weakens the threat of new entrants. Discussed above leads to the conclusion that threat of new entrants is medium.
This paper analyzes the main economic indicators related specifically to one of the largest pharmaceutical companies, Pfizer, Inc., such as overall performance, revenue, net income, research and development, cost and expenses. There are certain economic indicators that do not apply to individual companies, but influence their economic forecasts. Such factors as inflation and unemployment rate pertain to an industry or region and such factors as political instability or any major economic conditions will affect the market analyses even if they are not economic indicators. There are many more factors that affect economic predictions and their detailed analyses are presented at http://www.economic-indicators.com, a web site for tracking the US economy. Overall performance is always one of the most important indicators of economic activity and every financial report starts with results of annual performance.
"Reducing Demand for Drugs." UN General Assembly Special Session on the World Drug Problem. May 1998. Web. 02 Mar. 2011. .
Estimated annual revenue from U.S. drug trade is more than $3 billion, just short of Fortune 500
Scherer, A. (2012) ‘M&A in Big Pharma: Holy Grail or Buying Time’, Contract Pharma, 21 Mar [Online]. Available at: http://www.contractpharma.com/contents/view_experts-opinion/2012-03-21/ma-in-big-pharma/#sthash.NnrBSo3O.dpuf (Accessed at: 15 December 2013)
10. Collis, David, and Troy Smith. "Strategy in the Twenty-First Century Pharmaceutical Industry:Merck&Co. and Pfizer Inc." Harvard Business School, 2007: 8-12.
Ventola MS, C. L. (2011, November 11). The Drug Shortage Crisis in the United States. Retrieved from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC3278171/
For commodity generic drugs, Teva has an opportunity to expand its core business into emerging markets, but there it will have to face institutional voids because such markets are driven by physicians and both physician and other people are not aware about the effectiveness of generic drugs. To cope with the challenge of institutional voids Teva have to look for some competent small pharmaceutical firms for acquisition and some big firms for the joint venture. For changing the perceptions of people and physicians, Teva will require to run marketing campaigns and direct approaches to physicians to develop a market for their products.
manpower and a large base of FDA approved plants, positions India high on the outsourcing
Whereas, China’s annual herbal drug production is about US $48 billion with export of US $3.6 billion. Currently, United States has the largest share for Indian botanical products which accounts for about 50% of its total export. The major importers of herbal medicine from China are Japan, Hong Kong, Korea and Singapore which accounts for 66%. WHO includes phytotherapy in its health programmes and gives basic procedures for the validation of herbal drugs in developing countries. Eastern countries like India and China have well-established herbal industries and Latin American countries have been carrying out research programs in medicinal plants and their standardisation procedures. In Germany, 50% of phytomedicinal products are sold on medical prescription and the cost being refunded by health insurance companies. In North American countries, phytomedicinal products are sold as .health foods. Consumers and professionals have struggled to change this by gathering information about the efficacy and safety of these products and new guidelines for their registration are now part of FDA policy. In 1997, the North American market for products of plant origin reached US$ 2