I found a PDF industry overview called Pharmaceuticals
in The U.S, which was published in 2011, so it’s statistics were based
around 2010. The overview was very informative and gave a pretty good holistic
insight into the pharmaceutical industry. I found it interesting that the U.S
actually accounts for 36.2% of the global pharmaceuticals market value, with
Europe accounting for 29.2% and Asia-Pacific accounting for 25% in 2010 (page
11). I had never given much thought to the pharmaceutical industry, so knowing
that the United States is the leading player is quite astonishing. I also found
it interesting that it is mainly the U.S that advertises drugs on television.
Though I do believe that advertisement in general can help revenues, I don't
think for drugs that it's a good idea to showcase drug in a favorable light,
then have disclaimers at the end. The disclaimers are more likely to scare off
buyers than have them buy the products. I am very curious on how much
advertisement plays in the pharmaceutical market. I am also curious on how come
the U.S allow medical practitioners to advertise for wholesale companies, while
other countries make it illegal. The overview also pointed out that the rivalry
of pharmaceutical manufacturers is very strong in the U.S (page 23). Rival
manufacturers would wait in till the patents for certain products expire and
develop a similar type of product that could beat out that product on the
shelves. Competition is definitely prominent in the pharmaceutical industry. I
think that in the future, the pharmaceutical industry will grow, not only in
size, but also in market value. Already from 2006-2010 there was a 4% compound
annual growth rate (CAGR), and predictions have been made that from 2010-2015
there will be a 5.5% CAGR (page 8). That would be a difference of 100 billion
from 2010 and 2015. The need for prescription drugs will never go away, so the
pharmaceutical industry has nowhere else to go but up.
I learned in my article about the economics of the pharmaceutical industry, that advertisment plays a big role in cost and revenue. The drug companies spend a lot on advertisement because that economy is decreasing and they want to sell more drugs. Putting more emphasis on commercializing the drugs will help sell more to the public.
ReplyDeleteI agree with your view that it is not a good idea to show benefits of drugs very vividly and then keenly state possible consequences of taking the drug. It's done in order to gain profit from the viewer of the advertisement, without the consumer's health in favor of thought. The market in pharmaceuticals is very competitive; not only with other company brands, but with generic brands as well. Generics are becoming increasingly popular in the market and pose a threat toward well-known brand drugs.
ReplyDeleteMelanie, I loved the questions you asked in this post and the focus on pharmaceutical advertising. This is a fascinating area of the industry considering the high level of regulation around it and I think you summarized the issues well. You had great depth of analysis in this post, so to improve in the future I would just suggest ensuring that your writing is concise and free of spelling or grammatical errors.
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