Competition in the UK's Pharmaceutical Industry

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One of the leading industries in UK market is pharmaceutical industry bringing a trade surpulus of £3.4 billion in 2004. An export of UK pharmaceuticals in 2004 was £12.2 billion. The Association of the British Pharmaceutical Industry has published these facts and statistics and reveals that two largest pharmaceutical companies, which are the most successful in the world, are home based GlaxoSmithKline (GSK) and USA based Pfizer. It is important to be in the Big League to compete successfully in a global industry such as pharmaceutical.

The leading UK pharmaceutical corporations’ market share in year 2003 are illustrated in a graph below where GSK total share of market was 9.7% and total market sales were 1,088.610 (£m).

Source: IMS Dataview


As mentioned earlier GSK is one of the world leading research based corporation, which is a leader in the worldwide consumer healthcare market with nearly £3.5 billion in sales and over ten £70 million brands. To compete in market environment of retail and consumer marketing GSK Consumer Healthcare offers over-the-counter medicines (OTC), oral healthcare and nutritional healthcare products. The most known brand names of GSK are Aquafresh toothpaste, Panadol, Lucozade, Ribena or Nicorette. GSK Consumer Healthcare business is being strongly supported by Research & Development (R&D) where the most of the spending expenditure is being used. GSK strategy is to take an advantage of the development of new drugs and the use of genetic therapies. In R&D the cost of new medicine is over £212 million and it usually takes between 12 and 15 years.

How does it maintain its position on market?

GSK has lots of strengths, which are helping this company to maintain its position on highly competitive pharmaceutical market, which consist of big players such as Pfizer (USA), Astrazeneca (UK), Wyeth (USA) or Merck&Co (USA), which are very strong companies to compete with. The size of the company is one of the big strengths to maintain its monopoly.

Growth of GSK
GSK has a very rich history; it has been established in 1715 by Silvanus Bevan who initially founded the Plough Court pharmacy in London. From that time to company was evolving into more complex corporations. The most important events of GSK history are its merges with other companies such as in 1995 merge of Glaxo and Wellcome which created Glaxo Wellcome, five years later on 27th December 2000 there was a final merge of this corporation of two leading research-based healthcare companies (Glaxo Wellcome and SmithKline Beecham). In every single merge the company was getting stronger and more competitive on pharmaceutical market. In these days the final GSK corporation is consisting of five big companies, which has merged together to maintained their position on the market.

Every corporation in pharmaceutical market has its own patents. As patent protection usually lasts for 10 or more years it is a big advantage over other companies to be the only one who can produce certain products on which they have obtained the patent protection. GSK is obtaining patent protection on all significant products, which are discovered or developed through their R&D activities. According to GSK annual report in 2004 the corporation owns 19 patents, examples of the patents GSK is holding is as follows: Avodart ¬– the patent on the active ingredient dutasteride has an expiry in 2017 in Europe. Paxil/Seroxat – the patent on the commercial form of the active ingredient paroxetine is due to expire in 2006 in Europe. Valtrex – the patent on the active ingredient valaciclovir is due to expire in 2009 in Europe.

It is very important for every company who wants to be successful in pharmaceutical market to be up-to-date. To be up-to-date means that every company should invest certain expenditure on R&D, where new drugs are being discovered and developed. GSK is using different types of...
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