Porter's Five Forces Analysis Of The Pharmaceutical Industry

The pharmaceutical industry should be profitable. It has produced new drugs and treatments, which have saved lives and improved the quality of life. However, at the moment this industry engages in monopolistic

In this paper I will discuss Pharmaceutical Research and Manufacturers of America (PhRMA) I will talk about its purpose, scope, design, application, and how they affect the healthcare economy.

The U.S. pharmaceutical industry is continuously growing and profiting. How these industries profit and grow in the current status of the American business is caused by various factors such as demand of the citizens, change in marketing and competition. To understand how the factors added to the increase in profit and growth of the pharmaceutical industries, we need to know how it was founded and industrialized.

Pharmaceutical companies have been using a lot of various strategies to market their medications, notably in a contentious and lucrative market for prescriptions and non-prescription medications.

The principles of supply and demand pertain to any economic policy, and the generic drug sector of the healthcare industry is no different. The alignment, however, is an anomaly to schools of thought that we are accustomed to.

Threat of new entrants is relatively high. Companies forming alliances are potential rivals. Even if earlier such company was not considered to be a threat, after merging with some research and development company or forming alliance with another pharmaceutical company it would become a rival to Eli Lilly. The threat is however weakened by significant research and development costs necessary to successfully enter the business. Eli Lilly’s focus on a relatively narrow market of sedatives and antidepressants weakens the threat of new entrants, but other products that form lesser part of company’s sales such as insulin and others are exposed to high threat of new

Competition within the U.S. pharmaceutical industry is very high. With less elastic demand than for other industries, profit potential is enormous. Demand is more inelastic as prescription drugs are necessary for many individuals with illnesses such as diabetes and high blood pressure. Within the industry, there are two types of manufacturers: brand name and generic. These groups compete not only among one another, but with each other as well. Brand name pharmaceutical companies often try to, and succeed in preventing or delaying approval and circulation of generic equivalents. The most common tactic used is a reverse payment settlement agreement, otherwise known as “pay-for-delay”. Generic firms promise to delay the circulation of their

This Pharmaceutical industry encompasses corporations that manufacture biological, medicinal and pharmaceutical products in several methods including tablets, vials, lotions, concentrates and suspensions. The general pharmaceutical market can be divided into prescription-based products and over-the-counter medications. The pharmaceutical products are primarily dispersed via wholesalers, and are then sold through pharmacies or dispensed in hospitals.

India’s middle class of approximately 300 million people is continually developing, yet the majority do not retain health insurance. This vast untapped market drew foreign interests and in the 1980’s the Indian government opened the industry to allow foreign direct investments to be made. Despite the lower profits compared to global markets, Eli Lilly knew they could quickly expand their market presence by doing business in India. The pricing controls and regulations from the 1970’s posed a threat to profits and Eli Lilly would need a local and knowledgeable partner to break into this market successfully. The strategic joint venture formed with Ranbaxy was the answer. Ranbaxy could handle manufacturing locally, provide a distribution network, and could manage brand recognition. They also dealt with regulations and health system bureaucracy. In return, Eli Lilly’s revenues from their innovative pharmaceuticals caused Ranbaxy’s market shares to

In retrospect, Chinese companies invested small portion in R&D, typically 2% of sales by far away from Indian companies’ 7.7% (Grace, 2004). Overall, Indian firms are supported by R&D programs and have well positioned themselves in the domestic market so that more intense competition will be confronted in Indian pharmaceuticals industry. Another weakness when exporting to India is that India is among the lowest in the world in terms of per capita consumption of pharmaceuticals, with $4.50 compared to $13 in China (Greene, 2007). Under those conditions, more promising pharmaceuticals market can be expected in China than in India. Furthermore, with the rising number of affluent Chinese, diseases such as diabetes, cardiovascular diseases and cancer all shows the growing trend, offering a huge market demand for drug development (kermani, 2008). The huge market demands as well as less competition make China an attractive market for pharmaceuticals industry.

BioCryst Pharmaceuticals focuses on state of the art drugs to fight cancer, autoimmune diseases, and viral infections. The company is based in Durham, North Carolina. It's best selling line is Peramivir, a drug that is used to treat a drug resistant form of Influenza A subtype H1N1Virus. US sales are strong, but the company now wishes to enter into the global market. Those with an eye on the global marketplace already know that India's most recent entrance into the global economy represents the next golden opportunity in the pharmaceutical industry. This analysis will explore the potential for market entry into India,

* 1. Case Study Kramer Pharmaceuticals, Inc. Presented by Debi Prasad Bagria Kishor Chandwani Nandini Mudgil Mrinmoy Kanti Das Rahul Agarwal Ritesh Kumar Singh

Pharmaceutical industry, the discovery, development, and manufacture of drugs and medications (pharmaceuticals) by public organizations and private organizations .Pharmaceutical companies may deal in generic or brand medications and medical devices . The pharmaceutical industry is responsible for the development, production and marketing of medications. Thus, its immense importance as a global sector is inarguable. In 2014, total pharmaceutical revenues worldwide had exceeded one trillion U.S. dollars for the first time. North America is responsible for the largest portion of these revenues, due to the leading role of the U.S. pharmaceutical industry . Sun Pharmaceuticals Industries Limited plans to acquire 85.1 per cent stake in Russian company Biosintez for US$ 24 million for increasing its presence in Russia through local manufacturing capability.

Porter five forces analysis is a tool which is used to analyze level of competition within an industry and its strategic management. Porter’s 5 forces determine the competitive intensity of an Industry and the industry’s profitability. If the intensity of competition is high then profitability is drawn down. Across different industries the levels of profitability differ.

There are a wide variety of reasons that make pharmaceutical industry one of the most profitable industries. One of them is how the drug patents work. If a drug gets passed through the regulatory bodies like U.S. Food & Drug Administration, the company