The Pharmaceutical Industry Environment

Overview of pharma industry Know associate industry in pharma Environmental forces Stakeholders

In the industry we have 2 groups 1. Typical pharmaceutical multinational giants

responsible for introducing many innovative products and employing many employees reaching 100,000 and with branches some time reaching hundreds

2. Biotechnology companies that harnesses recombinant DNA technology and develop drugs some came a billion dollar size without promoting or selling their products instead they allied with typical companies which in turn market the products

Not all biotechnology companies have fully integrated with the market and achieved profits

Because of the extreme competition most company now have chosen to focus their resources on specific areas where their long lasting history of innovation and success allow them to be relatively protected from competition such companies are called “niche”

Associate industries

Contract research organizations (CRO)Clinical site management companies (CSM)Contract sales organizations (CSO)

Change forced by managed care and global government cost containment plus customer and industry factors has affected the dynamics of the industries

In the past 30 years the industry has passed through an innovative phase(1980)then a price increase phase (late 1980) a cost reduction and consolidation phase(early 1990)and a recent comeback of innovation(late 1990)

The recent trend with the most impact on the industry is the globalization and consolidation

Environmental forces

Globalization to be effective some requirements have to be met:

a) Local expertiseb) Sale capabilitiesc) Customer service networkd) Supply base

Reasons for consolidation a) Economics of scale (The increase

in efficiency of production as the number of goods being produced increases)

b) Financial positionc) Filling of technical gapd) Sharing distribution networkse) Therapeutic area synergy f) Critical mass (When a company reaches

critical mass, it is thought that they can remain viable without having to add any more investment)

Major stakeholders

A stakeholder is an person or group of persons with which the company has or wants to develop a relationship

In the industry there are internal and external stakeholder

internal includes every employee where ever he works and thus his education ,training are cared for by the company

External stakeholders includes suppliers , regulators and politicians because they all play a role in the company success

Mediators includes prescribers ,university professors ,and health care professionals who stand between the company and its final customers

Consumers includes patients ,their families, or any support or advocacy group ,media, general public and the competitors

Consumers

Patient compliance

Factors contributing to noncompliance1. Treatment complexity2. Disease perception3. Family opinions4. Elderly patients5. Patient info quality6. Poor communication with health care

professionals

Organizational buyers