Eisai Case Study

Improvements in health care and life sciences are an important source of gains in health and longevity globally. The development of innovative pharmaceutical products plays a critical role in ensuring these continued gains. To encourage the continued development of new drugs, economic incentives are essential. These incentives are principally provided through direct and indirect government funding, intellectual property laws, and other policies that favor innovation. Without such incentives, private corporations, which bring to market the vast majority of new drugs, would be less able to assume the risks and costs necessary to continue their research and development (R&D). In the United States, government action has focused on creating the environment that would best encourage further innovation and yield a constant flow of new and innovative medicines to the market. The goal has been to ensure that consumers would benefit both from technological breakthroughs and the competition that further innovation generates. The United States also relies on a strong generic pharmaceutical industry to create added competitive pressure to lower drug prices. Recent action by the Administration and Congress has accelerated the flow of generic medicines to the market for precisely that reason. By contrast, in the Organization for Economic Cooperation and

U.S. based companies hold rights to most of the world’s rights on new medicines and holds thousands of new products currently being developed. As of 2012, the industry helps support almost 3.4 million jobs in the U.S. economy. It is also one of the most heavily R&D based industries in the world. In the United States, the environment for pharmaceuticals is much friendlier than other countries around the world in terms of pricing ability and regulations. Both the Pharmaceutical and Biotechnology industries have experienced significant growth in the past year with year-over-year increases of 13.02% and 34.69% respectively. It is an even more striking when looking at the past five years considering both have beat out the S&P 500 with pharmaceuticals increasing an additional 31.44% and the biotechnology sector besting an astonishing 269.3% more return than the

Selecting a business strategy that details valuable resources and distinctive competencies, strategizing all resources and capabilities and ensuring they are all employed and exploited, and building and regenerating valuable resources and distinctive competencies is key. The analysis of resources, capabilities and core competencies describes the external environment which is subject to change quickly. Based off this information a firm has to be prepared and know its internal resources and capabilities and offer a more secure strategy. Furthermore, resources and capabilities are the primary source of profitability. Resources entail intangible, tangible, and human resources.

In recent years, the costs of all forms of medication have skyrocketed. If you or a loved one has been to the hospital recently, you know that the cost of the drugs is absurd. Many people believe that Big Pharma is to blame. Big Pharma is an industry term that refers to the large multinational drug companies that command a majority of the global pharmaceutical market. These companies have been accused of many scandalous actions including spending more money on new drug marketing rather than product development, as well as specifically targeting doctors who prescribe more drugs. Several controversial business techniques employed by Big Pharma are also to blame. Big Pharma has also had a large impact on the recent opioid crisis with numerous

The Pharmaceutical industry has been in the spotlight for decades due to the fact that they have a reputation for being unethical in its marketing strategies. In The Washington Post Shannon Brownlee (2008) states, “We try never to forget that medicine is for the people. It is not for the profits. The profits follow.” This honorable statement is completely lost in today’s world of pharmaceutical marketing tactics. These tactics are often deceptive and biased. Big Pharma consistently forgets their moral purpose and focuses primarily on the almighty dollar. Big Pharma is working on restoring their reputation by reforming their ethical code of conduct.

Recently, there has been a debate about the high prescription drug prices in the United States. Accounting for 9.7% of the national health expenditure, $329.2 billion was spent on prescription medications ($931 per person) in 2011 (Linton, 2014). So what exactly is the average American getting with their $931? Well, because there is an extraordinary amount of time, effort, and energy that goes into creating, manufacturing, and distributing a new drug, it’s no wonder the prices are so high. But what other costs are folded into the prices of your prescribed medications? This review looks beyond just the research and development costs needed to take a new drug from idea to shelf by examining several journals and other credible, secondary sources, to shed some light on how much pharmaceutical companies are spending to develop, advertise, and sell their drugs.

Pharmaceuticals play a more prominent role in health care Systems. The North American market today comprises 47 percent of the global prescription drug market, which now exceeds half a trillion dollars, with Americans spending approximately $251.8 billion annually on pharmaceuticals. This is up significantly from a decade earlier, when American consumption represented approximately one-third of the world market (2006) IMS Health). America's insatiable demand for prescription drugs has led to serious cracks in the drug supply chain of the world's leading pharmaceutical market (Wyld, 2008).

However, it is important to remember not all of these resources may be relevant. The RBV of a firm is only concerned in resources that can be a source of sustained competitive advantage for the firm.

Over the past couple of decades, a sudden change has started to take over the way business is done. The time when no rules applied, and anyone could do what they pleased at the cost of others or the environment is rapidly ending. Instead, companies today have become aware that it is essential for them to employ ethics and morality in their actions, if not they will be heavily scrutinized and rejected by the public. This way of thinking also applies to the pharmaceutical industry, which over the past century has been rapidly expanding. Do to the fact that this industry can determine the health and lives of millions of people, it is imperative that this industry follow an ethical and moral path.

Durand's experience at TAP pharmaceuticals is not as unusual as one might estimate, but the magnitude and scope of the problem is not common. The pharmaceutical sector is driven by high research and development costs, and the underlying dilemma of expiring patents and unrelenting competition plays heavy on the sales and marketing teams. Two parallel races are continuously run: Recouping research and development costs of pharmaceuticals which can be astronomical and selling as much product at a premium as quickly as possible. The stakes are high and temptation is ubiquitous. Some companies, like TAP pharmaceutical, give in to their baser instincts the outcomes of which are well compensated and highly regarded in society: profit!

Drug prices are set by pharmaceutical companies to cover research and development costs. While R&D costs clearly need to be covered, markets in developed countries already pay for most R&D of new products. Because of this, it makes moral and economical sense to establish a two-tiered pricing system; for R&D costs to be paid for by developed countries, allowing significantly reduced prices to be charged in developing countries.

The different assumption made about the market place is another point of comparison between the MBV and RBV approaches. Under the market-based approach, the assumption of the ultimate arrival at conditions of market equilibrium prevails; with a balance of supply and demand and abnormal profits being computed away with new entrants. The most efficient firms will be those with low costs and minimal differentiation strategies. However, by contrast, the resource-based approach assumes a state of disequilibrium as the market norm. Given that firms will have differing core competencies, coupled with the fact that at different moments in time, the industry will make certain factors key to achieving profitability, the firms with the required key competencies as dictated by the industry, will the ones able to achieve above average profits.

The RBV promotes a deep understanding of the firm’s resources so that the appropriate combination of resources will be chosen over others in strategic plans. For example, a low price strategy would include different resources than a strategy focused on offering high quality products or services. Thus, the RBV helps to identify the resource bundles that match the market for a given strategy and also identify the resource gaps that maybe need to be filled (Grant, 1991).

When someone creates something, that is solely from their mind, whether it be literature, a play, a piece of artwork, it is Intellectual Property. Intellectual Property is important because it allows the economy to grow, as well as captures the devotion of its inventors and creators, by becoming financially beneficial. Intellectual property helps promote development and aims for a more economic growth in overall well-being. In direct relation to pharmaceutical drugs, the creation of the drugs are never ending, and also supplies a huge source of financial growth for all of the developing companies. In fact, “The combined profits for the ten drug companies in the Fortune 500 ($35.9 billion) were more than the profits for all the other 490 businesses put together ($33.7 billion) [in 2002] …” (The Truth about Drug

This report provides an analytical strategic review of the global pharmaceutical industry; its origin, evolution,