Table of Contentsi
1Definition of The Pharmaceutical Industry1
3Forces of Competition3
5Role of Information Systems & Technology4
For the purposes of this report, we will perform a detailed overview of the pharmaceutical industry, including defining the industry and its strategic forces, an environmental analysis, the forces of competition within the industry and value chain analysis as well the role of IS/IT in the industry. Four companies will be individually researched within that industry and this individual analysis will include financial information as well as industry market sources. A clear plan will also be outlined for further analysis on these companies.
Definition of The Pharmaceutical Industry
Today the pharmaceutical industry is a global organization, in the area of research and development of new drugs to combat serious illnesses and life-threatening diseases. Historically apothecaries prepared medicinal compounds, whereas, today universities and large-scale manufacturing developments, with advanced scientific and technology techniques, develop and manufacture new drugs.
The diseases of the last century were cholera, tuberculosis, typhoid fever, but the modern diseases of, cancer, brain degenerative-diseases, etc, demand stronger, medically advanced drugs to combat them. This level of research demands teams of highly organised, trained scientists working in laboratories, who develop and invent new drugs. This requires high capital investment for research and development to patent new drugs, as the pharmaceutical industry is an intensely competitive industry. The challenge for management therefore is to seek better improved strategic models as the industry is restructuring itself to meet ever changing market needs. A company can invest several billion dollars and many years of effort to develop and legally register a new drug, with no certainty of success or return on investment. A lot of time and investment goes into research and development, aligned with legal, political, issues plus the costs of overheads are astronomical, as a company can invest up to forty per-cent of revenue in the development process.
The pharmaceutical industry is driven by the need to compete in existing and new emerging markets, like China, Russia, Brazil, India and Mexico, etc. For example, Elan, an Irish company, recorded sales in 2009 of its drug Tysabri of one billion dollars, in forty different countries. Global sales for the industry were recorded at over $600bn with a yearly increase of 10%. Any new drug needs to be patented and registered and given the legal requirements to be marketed, as different jurisdictions will have different legal implications, especially if a company is sued due to adverse effects of the drug.
As the population of the world lives longer due to new life-saving drugs thus creating a wider market share for companies, supply must constantly meet demand. This event leads to companies, being driven by intense competition, to engage in mergers and acquisitions in order to survive, the dominant companies globally, according to recent statistics, are:
• Hoffman-La Roche(Switzerland)
So despite the global economic downturn, the pharmaceutical industry has continued to be profitable, it has remained economically strong due to constant...