Essay On Pharmaceutical Industry

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Industry Definition
According to the Encyclopedia of Global Industries, the Pharmaceutical Preparation Manufacturing industry can be defined as an industry that produces products or means for human and veterinary treatment. There two main segments of products in the pharmaceutical industry: pharmaceutical preparations and therapies. Pharmaceutical preparations include prescription or “ethical” drugs— products geared towards dental, medical, or veterinary professions, as well as “over-the-counter” drugs which are sold to the general public. The Encyclopedia of Global Industries also includes “therapies derived from the genetic engineering or related biotechnology processes,” within the scope of the pharmaceutical industry (Pharmaceuticals). The geographic focus of our report will be mostly on the pharmaceutical industry within the United States.
Industry Performance
In this section we will touch on the different aspects of financial performance within the pharmaceutical industry and companies within this industry. There will be graphical representation accompanied by interpretation of the graphs. The graphs will be further analyzed in the STEP analysis section.
Within Figure 1 an upward trend in the stock of the pharmaceutical industry can be seen. Although there are small dips here and there, an overall assumption can be made that investor optimism within the pharmaceutical industry is healthily thriving.
Figure 1, S&P 500 Pharmaceutical Stock Index

To prove that there are similar upward trends between the different markets, Figure 2 is a compilation/ comparison of the pharmaceutical stock index in different markets.
Figure 2, Pharmaceutical Stock Index (market comparisons)

Figure 3, Industry Total S...

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...t is also likely that the pharmaceutical industry will experience a major shift towards selling directly to patients. This will rely heavily on the need to cut costs because of lowered profit margins with generic drugs as explained above.
Key Success Factors
The key success factors in the pharmaceutical preparation manufacturing industry has relied on the heavy focus on R&D in developing new drugs, obtaining patents for these drugs, and then sales with high profit margins to cover the costs of the patented drugs.
In the future of the pharmaceutical preparation manufacturing industry, success will depend on the ability to manufacture affordable products by keeping costs low throughout the entire supply chain. Key factors will include responsive supply chains, the transition to direct sales, focus on cost driven sales, as well as influence in e-commerce.
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