MARKET OVERVIEW The global pharmaceutical market is a multibillion-dollar industry. The 10 largest drug companies control over one-third of the market, several with sales of more than $10B a year and profit margins of 30%. Six of these companies are based in the U.S. and four are in Europe. It is predicted that North and South America, Europe, and Japan will continue to dominate by accounting for 85% of the world’s pharmaceutical market. Companies currently spend one-third of all sales revenue on marketing, which is roughly twice of what they spent on R&D (“Pharmaceutical Industry”). The cost of innovation proves to be very high as the drug business is very risky; 1 out of 10,000 discovered compounds are approved for sale. Since 2001, the Center for Drug Evaluation and Research averaged 22.9 approvals per year. Only 3 out of 20 approved drugs bring in adequate revenue to cover the R&D costs and only 1 out of 3 approved drug generate enough revenue to cover previous failures. According to a study by Bain & Company, the cost of discovering, developing, and launching a new drug rose to approximately $1.7 billion in 2003, taking into account opportunity costs, marketing, and other business expenses (“Pharma Markets”). SUPPLY The major factor affecting supply is the advancement of technology. The development of simulation and data analysis tools condenses the drug’s process time from development to full-scale production. Process tomography and high frequency camera systems help hasten products from clinical trial stage to commercial availability. Integrated sensors are being used to monitor the performance and quality parameters of drug manufacturing processes on a real-time basis in order to ensure the quality of the medicine ... ... middle of paper ... ...http://www.who.int/trade/glossary/story073/en/index.html>. Prest, Richard. "Real Demand Forecasting." Pharmaceutical Industry. PharmaManufacturing.com, n.d. Web. 14 Mar. 2013. . Schacht, Wendy H., and John R. Thomas. Patent Law and Its Application to the Pharmaceutical Industry. Rep. no. RL30756. The Library of Congress, 10 Jan. 2005. Web. 14 Mar. 2013. . Silverman, Ed. "Global Drug Spending Is Forecast To Rebound." Pharmalot. PharmaLive.com, 12 July 2012. Web. 15 Mar. 2013. . Vogel, Ronald J. "The Demand for Pharmaceuticals." Pharmaceutical Economics and Public Policy. New York: Pharmaceutical Products, 2007. 90-108. Print.
(7) Hall B. Patents and Patent Policy -. 2007. The 'Secondary' of the 'Secondary' of the 'Secondary' of the 'Secondary' of the 'Secondary' of the 'Secondary' of the 'Secondary' of the Morse H. SETTLEMENT OF INTELLECTUAL PROPERTY DISPUTES IN THE PHARMACEUTICAL AND MEDICAL DEVICE INDUSTRIES: ANTITRUST RULES. Allison JR, Lemley MA, Moore KA, Trunkey RD. Valuable patents. Geol.
Lyles, Adam. “Direct Marketing of Pharmaceuticals to Consumers.” Annual Review of Public Health, volume 23. 2002. Print.
Our original marketing plan was not a plan at all. We wanted to see success and focused on revenues, net sales, and stock price to gauge whether we were doing what was best for the company. We made sure to locate a target market and base our promotional tactics on what young and mature families want and need. We ensured that we did the right thing in the face of adversity, especially when concerning intercompany issues and product tampering. We wanted to make sure that we were selling great products that did their intended job at a fair price, and made sure our products were easily accessible to consumers.
In America today, many people are in need of medical help. In fact,the Federal Trade Commission estimates that 75% of the population complain of physical problems (Federal Trade Commission 9). They complain, for example, of fatigue, colds, headaches, and countless other "ailments." When these symptoms strike, 65% purchase over-the counter, or OTC, drugs. In order to take advantage of this demand, five billion dollars is spent by the pharmaceutical industry on marketing each year . This marketing, usually in the form of advert...
3Walker, Hugh: Market Power and Price levels in the Ethical Drug Industry; Indiana University Press, 1971, P 25.
Macroeconomic Forecast Pfizer, Inc. - Pfizer, Abstract This paper is a Macroeconomic Forecast Outline of Pfizer, Inc. This outline will identify the main economic indicators for Pfizer as a business entity and as a representative of the pharmaceutical industry. This paper will identify sources of various data collected based on economic activity and relationships between different economic indicators.
Martinez, Barbara “Firms Paid to Trim Drug Costs Also Toil for Drug Makers” The Wall Street
Rising prescription drug prices are driving nearly two million Americans to cross international borders to seek necessary medications. Some are physically venturing into Canada and Mexico for the pharmaceuticals, while others are turning to mail-order pharmacies via the Internet. Purchasing prescriptions from Canada and Mexico is markedly less expensive than buying them at your local pharmacy or from a U.S. online pharmacy; however, the question is why? The why is what economists call price discrimination. It means charging different prices to different buyers of the same product. Price discrimination works in the drug industry because drugs are very expensive to develop, but inexpensive to manufacture. American consumers are exhauste...
"Reducing Demand for Drugs." UN General Assembly Special Session on the World Drug Problem. May 1998. Web. 02 Mar. 2011. .
biopharmaceutical industry. Manuscript submitted for publication, Sloan School of Management and the Department of Mechanical Engineering, Massachusetts Institute of Technology, Cambridge, Massachusetts. Retrieved from dspace.mit.edu/bitstream/handle/1721.1/34827/61670866.pdf?sequence=1.
In 2007, the pharmaceutical industry spent approximately $4.8 billion dollars a year advertising prescription drugs directly to the public (ProCon.org 2005). A study by two York University researchers estimates the U.S. pharmaceutical industry spends nearly twice as much on promotion as it does on research and development (York University, 2008). Why do they spend so much money marketing to the consumer? The simple answer is profit. Like any other business pharmaceutical companies are out to sell a product and make money. The primary concern of the pharmaceutical industry is not the welfare of the consumer but convincing them to take their drug. In order to eliminate this conflict of interest the pharmaceutical industry should be banned from directly marketing their products to the consumer.
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.
With the pharmaceutical industry constantly changing, it makes it very important for a company to analyze the macro environment. The first force is political; right now that pharmaceutical industry is greatly affected by politicians due to changes in health care structure, healthcare platforms, and partnerships with certain pharmaceutical companies. Within the next three to five years as politicians rotate we can foresee the political force being an even greater impact on the industry. The next force is economic. For the now we feel that the pharmaceutical industry is greatly affected by the economic force as people have more spendable income and will be more likely to purchase brand name drugs. As income dwindles, some poor individuals may be unable to purchase even generic drugs. Within the next three to five years since we are coming out of a recession, we will see consumer spending increase and the demand for the highest quality of medicines increase. The economic force will greatly impact the pharmaceutical industry for some time. The next force of the macro environment is the social force. The social force greatly affects the industry since we have begun to focus on preventative health care and detection recently. Moving forward we expect the trend of preventative health care and our tendency to change our health habits will prompt the pharmaceutical industry to deliver new and innovative products. The fourth force is technological; right now the pharmaceutical industry is greatly impacted by changes in technology, and will continue to be affected for years to come. The next force, ecological, somewhat affects the industry. Events like natural disasters, plagues, and other mass causalities can greatly affect the pharmaceutic...
Pharmaceutical patents are patents for inventions within the pharmaceutical industry. Patents give exclusive rights for an invention for a product or a process of making a product [1]. There are many aspects to patents in the pharmaceutical industry that are both pros and cons; it just depends on what industry you are in. Pharmaceutical companies take out patents so they can regulate the market and restrict competition from other companies. By obtaining patents pharmaceutical companies also attract investment. In addition to this pharmaceutical companies can also regulate the price of the drug as they will be the only company selling that drug. However these aspects of patents can adversely affect the generics industry. The generics industry cannot make or sell drugs that are patented but once a patent licence expires, both the generics industry and the WHO see increased benefits as drugs become more widely available around the world (i.e. developing countries) at a lower price. Here we will discuss the pros and cons of patents from the point of view of the pharmaceutical industry, generics industry and the WHO.
Qiu, L, Chen, Z-Y, Lu, D-Y, Hu, H & Wang, Y-T 2010, 'Public funding and private investment for R&D : a survey in China’s pharmaceutical industry ', Health Research Policy and Systems, vol. 12, no. 27, pp. 11