The pharmaceutical industry entails a team involved in the invention of a drug. The team consists of the drug producers, formulators, promoters and prescribers. (Swayne, Duncan, & Ginter, 2011) Since the foundation of the pharmaceutical industry in the 90’s with inventions of Insulin and Penicillin, the purpose of the pharmaceutical companies has been for production of Medicines and medical devices. (Ency) The purposes of their product are solely for diagnosis, treatment, and prevention of diseases in humans and animals. In this case study, we will describe the pharmaceutical industry and its products, evaluate its market size, and name its major players. We will also talk about the research and development involve in the production of a drug, describe the approval process of a drug and a short summary of our evaluation of the industry. . Medicines have been classified into three different 3 different groups, over the counter drugs, prescription drugs, and generics. Prescription and over the counter medications (OTC) are the most commonly abused substances after alcohol and marijuana in Americans 14 years and older. Although many think that OTC and prescription drugs are safer than illicit drugs, it is only true when there are taken in the prescribed amount and for the right illnesses. Among the commonly abused medications are many prescribed drugs which include Addictive, sedative and antidepressants, and stimulants. (National institute of Drug Abuse, 2013) Since some medications have psychoactive and strong sedative complicated effects, The Food and Drug Administration and pharmaceutical companies are collaborating in deciding what medications should be more restricted and require the prescription of a specialist while others can be purchased from over the counter. In determining what medication can be purchased over the counter, the FDA created a list of 80 categories and over 800 ingredients that can be used as OTC treatments without the need for prescription. While medications that did not have these ingredients had to be regulated by the FDA. The FDA then evaluates the safety of the drug for the public before it becomes a prescription drug.
Being in the medical field, the term generic is one that I hear very often. So what does it mean for a medication to become generic? When medications are first manufactured, they use the chemical name of the ingredients which they are made off and they are tagged with a patent that last for 20 years, for example Atorvastatin becoming the generic LIPITOR. During the patent period, no competitors are allowed and their prices are significantly higher than it would be as a generic. After the 20 years of being patent expires, the drug becomes generic and it changes its name to the company’s name, and its prices drop while competitors emerge. Take for example in 2002, patented brands averaged up to $75.82 and generic drugs averaged up to $27.16. (Swayne, Duncan, & Ginter, 2011) Market Size and Major Players
The Pharmaceutical industry represents about $0.5 trillion globally the pharmaceutical company is worth over $300 billion a year and it’s expected to rise to $400 billion within 3 years. With more than 80 percent of the sales in 10 nations, 10 of the largest drug companies control over 1/3rd of the market. 85% of global pharmaceuticals are in North, South America, and Europe. Major countries involved include the U.S, Japan, Switzerland, Germany, Russia, China, South Korea, and Mexico. Six of these markets are based in the U.S and four in Europe. The United States remains the leading market with over 45% of world spending and 2.1% of its GDP. (WHO, 2013)
The major players of the pharmaceutical companies today continue to be those that have been in existence since the 90’s. Pfizer has remained a top player for the past several years. Novartis jumped from the #2 to #3 position due to...