Pharmaceutical Business

Pharmaceutical Business

Introduction

The Pharmaceutical Business is one of the highest priority businesses in the world. It is a licensed activity to research, develop, market and distribute pharmaceutical drugs. The Pharmaceutical business has been considered as the highest and top priority business because of its benefits to the world and also the foreign revenues through exporting drugs and medicines. Pharmaceutical business is directed to self-sufficiency in meeting the demand of healthcare with drugs and medicines. There are more than 150 small, large and medium pharmaceutical companies in the world producing more than 90% of the total demand. The Pharmaceutical business is one of the most economically significant industries in the world.

Discussion

Critics contend that according to research, the pharmaceutical business is driven primarily by profit, which gives rise to the existence of so-called neglected diseases. These diseases mainly affect the poorest people of developing countries who can not pay high prices for the drugs they need. Thus, the industry favors investments in research and development of drugs for diseases that affect the richer and more concentrated population in developed countries who can afford and ensure return on investment in R & D. According to Currat Louis, secretary general of the Global Forum on Health Research, connected to the World Health Organization, "less than 10% of the research grants are allocated for 90% of the health problems of the world."

A recent statistical study shows how the U.S. pharmaceutical business earns super-profits, showing monopoly, to invest more in marketing than on research and development of new products. Spending by large laboratories on marketing exceeded USD 14 billion in 2011. The majority of these expenditures relates to direct marketing, aimed at health professionals, and directly influences the prescription drugs by doctors. The main conclusion is that the pharmaceutical business in the U.S. are not that invest most in R & D, but are those with the highest rates of net profits.

The pharmaceutical industry is characterized by strong dynamics focused on research and development, production and marketing business with high investment and competition strategy focused on product differentiation. United States being the main and largest market according to revenue represents approximately 50% share of the world market. The business in USA is almost entirely dependent on exports and uses patent protection as a form of security of return charged.

Problems faced by Pharmaceutical business

In order to challenge the problems of the pharmaceutical business model Chesbrough, (2012) has set out four new strategies which are as followed:

Delivering more products of value

Grow a diversified global business

Commitment to Shareholder Value and

Simplifying the companies operating model

These new strategic priorities will develop a company with a balanced group of healthcare businesses and a profile of lower overall risk. He has also pointed to a more disciplined distribution of capital across all the different business regions (Thakur, & Ramacha, 2012).

The major issue of the pharmaceutical business is the viability of the product which they manufacture. This implies that in order to create one particular drug the company has to invest millions in ...