Global Pharmaceutical Industry Analysis

7049 Words Nov 2nd, 2009 29 Pages
Global Pharmaceutical Industry Analysis
September 21
2009

Dibakar Mitra (P08017) I Manoj Joshi (B08026)

Table of Contents

EXECUTIVE SUMMARY 3
INTRODUCTION 4
ORIGIN AND EVOLUTION 5
ENVIRONMENT ANALYSIS (PEST) 7
STRUCTURAL INDUSTRY ANALYSIS (PORTER) 8
STRATEGIC ISSUES FACING THE INDUSTRY 11
STRATEGIC GROUPS IN THE INDUSTRY ACCORDING TO MARKET/DRUG/FUNCTIONING 15
PROCESS FLOW: IMPORTANT FUNCTIONS 16
STRATEGIC RESPONSES TO CHALLENGES: SIMPLE CORRELATION BETWEEN GROUP AND PERFORMANCE 19
REGULATOR’S ROLE 21
POSSIBLE FUTURE DIRECTION 21
CONCLUSION 22
REFERENCE 22

Executive summary

This report provides an analytical strategic review of the global pharmaceutical industry; its origin, evolution,
…show more content…
This enabled numerous “me too” drugs to achieve satisfactory returns on investment. Imitating a known drug reduced R&D risk considerably, while the marketplace was open to products offering minor advantages such as a more convenient dosage with fewer side effects, but with much the same therapeutic outcome. Generics legislation had a major impact on the industry, providing incentives for innovation and a race to market. The time during which R&D costs could be recouped was drastically curtailed, putting upward pressure on prices. By the end of the 1970s generic entrants and more stringent controls on clinical trials had led to substantial increases in R&D spending.

There were two important developments in the 1970s which further shaped the industry in the form that we see today. Firstly, the Thalidomide tragedy (where an antiemetic given for morning sickness caused birth defects) led to much tighter regulatory controls on clinical trials, greatly increasing development costs. Secondly, enactment of legislation to set a fixed period on patent protection (typically 20 years from initial filing as a research discovery) led to the appearance of “generic” medicines. Generics medicines are those that have exactly the same active ingredients as the original brand, and compete on price.

Another important feature of the pharmaceutical industry was the fact in that in many countries it was
Open Document