Firangiz Imamverdiyeva (120564) Topic: Pharmaceutical industry Strategic there: Regulations Company:
This paper will describe my research and analysis about the current situation in terms of regulation and problems in pharmaceutical industry. Specific example, in this case will be Pfizer, currently the world’s top ranked pharmaceutical company, and on 40’s place among the world’s greatest companies announced by Fortune 500. In the first part I present an overview of the pharmaceutical industry as a whole, analyze the current situation, major players and markets, challenges and the prospects of the pharmaceutical industry. The pharmaceutical industry is a highly regulated business with many rules dictated by the government to protect the interest of the public. The global pharmaceutical industry is expected to be worth more than $1 trillion in 2014, marking a 5% complex annual growth rate according to research from UrchPublishing. Meanwhile market is a highly competitive and entry is difficult due to a combination of strict regulations and the need for extensive research and development (R&D), involving time-consuming clinical trials. High R&D and development costs, lengthy clinical trial processes, expiring patents and difficulty in gaining product approval from the appropriate regulatory bodies all mean that companies must produce blockbuster drugs and continue to do so to remain in good standing. Three out of four pharmaceutical companies believe their industry is in the midst of a strategic crisis, new research finds. “The world’s leading pharmaceutical companies face considerable risk to their revenue streams in next three years,” the FactBook concludes. The global economic crisis that started in late 2007, and pressure from governments and consumers to lower drug prices, isn’t likely to help. Along with the pricing and cost pressures, as was given above regulatory changes and patent expiries are leading to shrinking margins. As the way out in this situation likewise in many other industries is emerging markets with their biggest growth opportunities, albeit with smaller margins. A quality workforce, consumerism and rising costs are some of the issues plaguing the global healthcare industry while pharmaceutical companies strive for transformational strategies to both create and sustain value. Value chain is another challenge and complex process in developed and emerging countries, where regulatory and pharmaceutical capacity can be stretched. Patient has to get the right medicine at the right time, but ensuring can be weak or broken. Even, if the potential market exists, regulatory barriers a way to discourage manufacturers from marketing their drugs in certain countries or may delay their launch. Obviously, no “one size fits all” approach applies to pharmaceutical policy. Even two countries with similar objectives may need different sets of policies, depending on their starting position, pre-existing laws and regulations, perceptions among providers and patients, and implementation capacity. Although high-income countries may find industrial policy and innovativeness hard to reconcile with cost containment in the health sector, choices may be even harder for middle-income countries that have to bridge the divide between a demanding urban population and large numbers of poor people in peri-urban and rural areas. Many low-income countries are struggling to provide basic essential drugs to their populations through still largely state-run delivery systems. At the same time, the growing private markets in these countries may be flooded with drugs of questionable origin and quality. In each case, policy makers and the implementing agencies need to select and combine their policy measures in a way that not only addresses the main problems conceptually but also is practically viable and sustainable. In the 1970s and 1980s, the average profit margin (as a percentage of revenues) of the Fortune 500 pharmaceutical...
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