Pharmaceutical industry patents also have tremendous impact on health care policies due to their influence on the cost of medicine. A new medication can cost in the billions of dollars requiring pharmaceutical companies to incur significant risk. The patent mitigates that risk encouraging medical companies to pursue new, innovation medicines that are essential to medical advancements. The pharmaceutical industry grew rapidly from the early 90’s until 2008. Blockbuster drug sales produced large revenues for their companies leading this period of growth.
Selling Sickness reveals the marketing techniques of the world's biggest and most powerful drug companies. These industries are now aggressively targeting the healthy and well households and individuals throughout the world. Promotional campaigns are being used to exploit some of human's deepest fears: death, illness, and disease. The $500 billion pharmaceutical industry is practically changing what it means to be human. Pharmaceutical companies have been rightfully rewarded for saving millions of lives and reducing suffering, but this book argues that the lines are being crossed from reaching from the ill to merchandise to the healthy.
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 Why are the prices so high? Some critics of the drug companies argue that the larger firms are ripping off the American public, are dishonest and, in some cases, unsafe. On the other hand, there are health care workers such as doctors and their supporters who claim that research and testing for drugs costs money. This supposedly justifies their prices for their products.
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.
There are two main reasons for this phenomenon. First of all the U.S has highly favorable patent laws toward these drug companies, prohibiting normal market competition for long periods of time. These monopolies allow manufacturers to charge several hundred percent above (world) market prices. (Dean Baker and Noriko Chatani) Some pharmaceutical companies have even been accused of delaying generic drug patents through litigation, even bribery in order to keep their drug prices high. It encourages a behavior of rent seekers.
Companies that produce new drugs under the patent right would increase their price. Hence, such entities charge high prices considering the monopoly position they assume. The status leads to exploitation of consumers bearing in mind the role drugs play in the society. Also, the time drugs take for approval by the FDA is a factor because it makes drugs production lifespan to last for 8 to 15 years even though it may vary in different countries. Other regulations affect the cost of research and design of the pharmaceutical products.
The Medical Devices and Diagnostics segment consists mostly of franchises such as Orthopaedics franchise, Surgical Care, Vision Care, Diabetes Care, Specialty Surgery, Diagnostics and other franchises. The rich portfolio J&J has of products, franchises and companies is one of the reasons why the company is one of the market leaders. 1.5 Market Share and Recent Trends Today, Johnson & Johnson is a pharmaceutical giant worth $71 billion. The company is listed on NYSE as JNJ with 2.83 billion shares outstanding with the value of $92.7 per share. 2013 is one of the most successful years of Johnson & Johnson.
BACKROUND The pharmaceutical industry's claim that high and increasing drug prices are needed to sustain research and development is a lie to the American public. Drug companies are spending more than twice as much on marketing, advertising, and administration than they do on research and development; that drug company profits, which are higher than all other industries, exceed research and development expenditures; and that drug companies provide lavish compensation packages for their top executives. Recent prices rose more than twice the rate of inflation last year and among the top nine pharmaceutical companies (Merck, Pfizer, Bristol-Myers Squibb, Pharmacia, Abbott Laboratories, American Home Products, Eli Lilly, Schering-Plough, and Allergan), all but one (Eli Lilly) spent more than twice as much on marketing, advertising, and administration than they did on research and development, and Lilly spent more than one and one-half times as much. Six out of the nine companies made more money in net profits than they spent on research and development last year. The executive with the highest compensation package in the year 2004, exclusive of unexercised stock options, was William C. Steere, Jr., Pfizer's Chairman, who made $40.2 million.
Pfizer spends billions worldwide on research and testing their new products to make sure that they are the most advanced product on the market. Part of the company’s strategy to drive away new entrants on the market is the introduction of a second brand, a generic line to compete with itself. Pfizer Portfolio goes from the most advanced treatment on cancer to healthcare products like ChapStick. Having a Pfizer line and its generic brand on the market is one of the best strategies of the company to limit the competition of potential action of producers of substitutes products since on the head of many of its loyal consumers they would go for Pfizer second line that someone else that do not know yet. The marketing strategy is that... ... middle of paper ... ... AstraZenica, beacuse Phizer wanted to require AstraZenica folders increase their research and development capablity making the company further in their the differentiation strategy, but unfortunately, the latest development showed that AstraZenica turned down the the current proposal, because the investment money was not enough, and the pressure from the stakeholder as well as the political system and the human resources.
A biotechnology company, for example, may spend 15 years and billions of dollars developing a new cancer-fighting medicine. Success is impossible without the business ... ... middle of paper ... ... received stock valued at $75 million. As is the case with athletes and other individuals whose talents are rare and much prized, the CEO's pay package is calculated with an eye on the competition. Companies pay millions of dollars to a valuable CEO, one who they judge will produce wealth for the shareholders, in part so he will not be hired away by a competitor. On the gridiron, the baseball diamond and the basketball court, we see and admire the physical prowess of a superlative athlete--one who earns the title of MVP--and we understand that it is morally proper to reward him accordingly.