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.
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 relationship between doctors and drug companies has been well established and well documented. Major news media resources like The Atlantic, as well as professional peer-reviewed journals like the New England Journal of Medicine cover stories addressing the potential ethical puzzles between physicians and pharmaceutical companies. Shaywitz (2013) has described the problem as “a bunch of wicked pushers who pay off vulnerable doctors to prescribe their latest expensive, mediocre product,” while still defending the special relationship that has developed between doctors and pharmaceutical companies (p. 1). Shaywitz’s (2013) argument is based on opinion on estimate only. Most established professional journals imply that collusion between doctors and drug companies leads to a range of problems that potentially harm patients.
Blockbuster drug sales produced large revenues for their companies leading this period of growth. However, events in recent history have begun to impact the industry and the future of pharmaceutical patents. The 2008 financial crisis significantly impacted growth as demand of medicine decreased. This economic recession, combined with multiple key blockbuster drug patents expiring in the last 4 years, changed and continues to impact the future of the pharmaceutical industry and new drug innovation. Approximately 81 branded drugs expired 2010-2013 ( ) including 30 blockbuster drugs each previously generating over a billion in sales annually.
The entry of these players made the industry intense with tough competition, low profit margins and collapsed prices. The segment of drug industry where Teva had to come up with innovative drugs demands to invest high capital on R&D that was in billions for a single drug could potentially lower the growth and revenues for Teva and could push the company in serious troubles. Analysis To build some effective and real world alternatives and recommendations to Teva Pharmaceuticals we would conduct following analysis to understand external and internal situation of the company. Internal and External Analysis SWOT Analysis (Exhibit 1) Strengths: Teva had a strong customer base because of its presence in 50 countries globally and had acquired 14 very competent companies. The company had a reputation of world’s #1 generic drug company with substantial market share.
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.
In the headlines recently, many different types of drug producing companies have been brought up for unethical findings in within the company and affecting the public. The two main companies are the FDA (Federal drug administration) and the drug producing company Merck. The FDA tests all drugs and gives the approval for them to be used by the general public. Merck and co is a drug producing company based in Whitehouse, N.J. Merck creates the drugs and has them tested by the FDA for the approval. Merck is also the world's fifth largest pharmaceutical firm.
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.