The pharmaceutical industry has been one of the most profitable and fastest growing industries of the U. S. Economy. It provides medicinal and pharmaceutical products that save millions of people from death and disease and also allow Ill or sick people to recover and lead normal lives. In today’s market, there are hundreds and thousands of medications available for just about any medical ailment there is: pneumonia, malaria, Influenza, Stud’s, diabetes, hepatitis, allergies, strokes, cystic fibrosis, psychosis, asthma, neurological disorders, cardiovascular disease, and even anger.
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The pharmaceutical industry Is regulated not only by laws and statutes, but also by the Food and Drug Administration (FDA) and the Drug Enforcement Agency (DEAD). One of the major laws affecting the pharmaceutical industry is the patent law. The patent law allows pharmaceutical companies to have exclusive rights to a medication for a certain number of years. This means that no other person or company can copy the drug in hopes of gaining market share. Patent laws help pharmaceutical companies retrieve revenues that are spent In research and development – which are happily in the millions and sometimes billions of dollars range.
Other laws, regulations, and acts affecting the pharmaceutical industry include the Clean Water Act. Clean Alarm Act, Medicare and Medicaid Prescription laws and regulations. Laws that were passed in Arizona include: Dispensing Fees to Pharmacists, Tamper Proof Prescription Pads, as well as various Arizona Revised Statutes that affect the pharmaceutical Industry. The pharmaceutical industry consists of over 2,500 locations of employment throughout the United States, and an even larger number overseas. Despite any upturns, downturns. D recoveries In the world’s economy, the pharmaceutical industry has been one industry which has remained fairly stable throughout. Regardless of fluctuations in the nation’s economy, pharmaceutical stocks have continued to rise. One factor might be attributed to the baby boom growth estimations. This estimate indicates that by the year 2030 over 70 million Americans will be over the age of 65. As a result, a larger reliance on prescription drugs for treatment will continue to cause the pharmaceutical company stocks to rise, making the industry a viable one for the years to come.
Societal values and lifestyle do play a part in the pharmaceutical industry, but do not greatly affect how prosperous the Industry will be. As previously stated, the industry itself has remained profitable and continues to see growth even in times of economic downfall. Lifestyles and values may affect the industry in the sense of formula versus generic prescription drugs – as the generics are much more affordable, but the industry itself will remain in demand, as health issues continue to occur. Technology plays a large role In the pharmaceutical Industry.
Perhaps the largest sector in the Industry is in research and development. New technology allows for better, faster, and more effective research and development methods. Without drugs and therefore will not be able to provide relief to those who are ill. Technology will also play a role in marketing and advertising. In today’s world, the demand for bigger and better, faster and more eye appealing has forced companies to use technology to better portray Just how these drugs will work. Take a look at any drug commercial from ten years ago and compare it to one from today.
It is obvious that genealogy plays a huge role in how marketing and advertising is done today. Dominant Economic Features The pharmaceutical industries is one of the largest and fastest growing industries in the world. Over the years, this industry has continued to prove that new and more effective methods for treatment of various ailments are successful. Although the number of new drugs developed by the industry has decreased over the years, it still proves to be a strong leader that will continue to prosper. The industry itself has numerous rivals and is extremely competitive.
The intention lies not only within drugs that treat ailments, but also in generic versus formula drugs. The scope of competitive rivalry extends too global scale. The pharmaceutical industry provides products across the world, therefore, international competition does play a role. Presence in a foreign country’s market definitely plays a role in a pharmaceutical company’s success, as many times, a company will be the sole provider (or one of two providers) of a drug to treat a specific ailment. If that company does not have presence in a country that needs this treatment, chances are hat market share will not be as great as it could be.
Products and drugs themselves are both greatly differentiated and less differentiated. Pharmaceutical companies will always apply for patents on their drugs. Depending on the drug and ailment that it is treating, it is possible for two similar, yet distinctive drugs, produced by two different companies to be on the market. One example of less differentiation is in Rhinoceros and Felonies. The products are extremely similar and treat the same symptoms and ailments, yet, their chemical composition varies slightly to create their differentiation. An example off greatly differentiated product is in Maximum.
Maximum is one of the best PIP drugs on the market and greatly differentiates itself from any competitors (looks, marketing, symptom treatment, etc. ), making it the number one selling PIP drug on the market. As apparent, the industry is characterized by rapid product innovation. Most products have short life cycles, lasting less than 15 years. The reason for this is patents. Generally, when a patent is applied for, it is good for 20 years from the date of application. This means that pharmaceutical companies have to apply for, evolve, test, and market the drug all within 20 years time frame.
Typically, by the time pharmaceutical companies put their drug on the market, only half of the patent time remains. As a result, continuous research and development are critical in the success of pharmaceutical companies. Opportunities to overtake key rivals exist when a pharmaceutical company can effectively develop a new, or blockbuster, drug and be the first to do so in the market. Other opportunities to overtake key rivals exist when pharmaceutical companies merge, or acquire the other. There is a constant upgrades of facilities and equipment in the pharmaceutical placement driven industry.
The need for strong technological and scientific capable people in the industry is great. As mentioned, research and development is the key that drives the pharmaceutical industry as that is what ultimately leads to the creation of new medicines. Research and development is perhaps the largest competitive stage of the industry, though marketing is another key factor to the industry. A blockbuster drug is wondrous to a company, but the successful sales and marketing of that drug is what will integrate the research and development with the successful sale and strutting of the drug.
For most pharmaceutical companies a large portion of their costs goes into research and development and then into marketing, as these two seem to be the two largest competitive stages of the industry. Competitive Forces Competition in the pharmaceutical industry mostly exists within itself. It has an intense internal rivalry and is highly fragmented. Most pharmaceutical companies specialize in a specific therapeutic area thus limiting rivalry. There are overlaps in that pharmaceutical companies do specialize in same type areas which increases viably.