Case Study The global pharmaceutical industry Coursework

Case Study The global pharmaceutical industry - Coursework eccentricConsequently, the pharmaceutical market acquired some remarkable character. Management was in the hands of medical practitioners while patients and payers had diminutive aw beness or authority. Thus, medical practitioners were inconsiderate to the cost however receptive to the sales endeavors of individual agents. This make possible several me too drugs to realize large profits on investment. It resulted in imitating well-known medicines that cut R&D risk considerably, while the market- place was exposed to products offering slight advantages for example a more(prenominal) than suitable dosage type or fewer side effects, although with much the same beneficial effect.thither were two major developments in the 1970s in the pharmaceutical industry. Firstly, the Thalidomide tragedy in sickness caused conduct defects, initiated much tighter regulatory rules on clinical trials. Secondly, laws were endorsed to establi sh a permanent period on apparent protection - usually 20 years from first report as a research invention. This produced the result of generic drugs. Generics however have precisely the same dynamic constituents as the original brand, and vie on price. The incline of generic application is exemplified by Bristol Myers Squibbs brand Glucophage, a cure for diabetes, which produced US sales of $2.1bn in 2001. aft(prenominal) the termination of the patent in January 2002, brand sales fell to $69m for the first quarter. Generics legislation had a significant influence on the industry, providing motivation for improvement and for a competitive market. The time during which R&D costs could be recouped was drastically curtailed, putting upward pressure on prices.The introduction of generics, however, was very beneficial for fraternity valuable medicines became extremely cheap. Indeed, health economists have estimated that the social returns from pharmaceutical R&D exceed that appropria ted by firms by at least 50 to 100 per cent. By the end of the 1970s generic entrants and more stringent controls on clinical trials had led to substantial increases in R&D spending.Pharmaceutical pains Environmental Forces An Introduction The pharmaceutical industry is remarkable in that a number of countries of the world are dependent on a monopsony - there is in fact only one dominant emptor i.e. the government. In the 1980s, governments all