The global pharmaceutical industry
• Stringent government regulation and powerful purchaser pressures.
• Governments focused on pharmaceuticals in efforts to control rising healthcare expenditure.
• Inter-country pricing disparities.
• European free trade agreements.
• Ageing populations create pressure on healthcare systems.
• Epidemic or chronic diseases (e.g. obesity).
• Impact of genetic research on industry. • Utilizing a web of alliances to address multiple customer needs Environmental • Increasing standards and requirements for environmental protection are becoming more stringent because of industry operations. Legal
• A fixed period on patent protection.
• Regulatory scrutiny governed by legislation.
2. Step 1 :High potential impact and high uncertainty: A. Intellectual property B. Government regulations C. Purchaser pressure Step 2: A(i) Longer period on patent protection (ii) Shorter period on patent protection B(i) Stringent government regulation (ii) Relatively flexible government regulation C(i) Powerful purchaser pressures (ii) Relatively weak purchaser pressures Step 3: Scenario 1 : Consolidation Wave A longer period on patent protection(A(i)) guarantees the high profit of patent owner even with powerful purchaser pressures(C(i)), but it makes harder for companies without patent to survive. If there is stringent government regulation(B(i)), big companies will consolidate with small ones at the global level to cut cost. Scenario 2: Spring-up A shorter period on patent protection(A(ii)) creates more opportunity for small companies to survive because they can launch generic medicines at a lower price even under powerful purchaser pressures(C(i)). If there is relatively flexible government regulation, more companies will spring up around the globe.
3. There are a lot of