Expensive Pharmaceutical Products versus Cheaper Analogs

894 WordsFeb 4, 20184 Pages
The major players of the pharmaceutical industry, producing expensive products, are under pressure of companies, producing cheaper analogs. The question is not only the high costs but also the high drug safety of these companies. Large “original” pharmaceutical companies argue that an imitation product cannot guarantee high drug safety and could harm the reputation of the original drug, thereby devalue it, and make it vulnerable to the market. Companies-producers of “blockbusters” are in an advantageous position because drugs that fall into this category provide faster and deeper penetration into the market due to their excellent properties and patent protection. Launch of a “blockbuster” guarantees high sales to the company. However, those companies face a number of difficulties associated with the entry of generics after the expiration of patent protection. First, sales of the original product plunge. Consequently, companies have to reduce their prices to compete. “This process is called “genericisation” - with regard to pharmaceutical products which already have expired patents (or expiration date is coming soon) and which face competition from cheaper generics.” There are also segments of medicinal herbs, alternative medicine, and physical therapy, all of which, at some extent, can replace and/or supplement drugs for a better effect. However, there are life-threatening diseases, such as cancer, which requires the use of prescription drugs. 3. Supplier power

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