Global Pharmaceutical Industry

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1. Overview of the global pharmaceutical industry

In 2003, Britain’s Guardian newspaper commented that, “on the face of it, the global pharmaceutical industry looks like the epitome of a modern, mature industry that has found a comfortable way to make profits by the billion: it 's global, hi-tech, and has the ultimate customer, the healthcare budgets of the world 's richest countries.”

Guardian sept 2003

The global pharmaceutical industry is nowadays made up of thousands of companies contained in this industry. There are an elite ten firms which are based in Europe and America. These firms alone account for nearly half of the world’s global drug market on their own. This said the current industry’s leader in terms of global sales is Pfizer and it has only roughly 10% of the market. This shows that there are not only one or a few dominant players in the market and that competition within the pharmaceutical industry is severe.

1,1 Porters five forces model

One of the best ways to analyse industries competitiveness is by using Michael Porters five forces framework. This framework is useful for business when creating new strategies, plans or making investment decisions about a business but will be essentially used to measure the attractiveness of an industry. It suggests there are 5 main forces, which can help a company develop a broad analysis of its competitive position in its market.

Competitive rivalry
The pharmaceutical industry within the 1980s was fragmented with hundreds of companies competing with a similar market share. The companies focused entirely on different classes of drugs which helped each of the organisations involved. The result of this was that most firms had few direct competitors so they were very comfortable. The lack of direct competition allowed pharmacutical companies to raise prices as they pleased. With this lack of competition competitive rivalry was almost nonexistent then.

Throughout the 1990s, rivalry in the



Bibliography: ANON “An overdose of bad news -The drugs industry,”The Economist.London: Mar 19, 2005. Vol. 374, Iss. 8418; pg. 89 ANON” Drugs scandal whistleblower stabbed again, Eduardo Goncalves, Lisbon, The Observer, 17 December 2000 Haydn Evans, “Patent problems”, CPA Global business pg 20, www.samedanltd.com, Accessed 15 April 2010 Julia Flynn, Business week, “A drug giants allergic reaction; At the root of Pharmacia and Upjohns woes; A cultures clash New York:” Feb 3, 1997, Iss Premal Pajwani “Has the consolidation wave gone too far”, International journal of marketing, London, 2004.vol4, iss. 3: pg.224, 4pgs Thusleem- 06/20/2008 “Patent system in the pharmaceutical industry”

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