The report I studied was Generics
in the United States. Since I did not know much about generic products, reading
this report was helpful and informative about the impact generics have in the
United States. For example, the United States is reported to make about 2/5 of
all generics in the world. In a
diagram figure presented in the report, the main factors in generic
pharmaceutical good demand are the importance of quality and cost, no substitute
inputs, and the threat of an oligopoly. The report I read revealed how generic
brands of pharmaceutical products are increasing in demand; by 2015, the
generics market is expected to rise 10.6% from 72.2% (2010) to 82.8% in volume
of the amount of generics supplied for name brand pharmaceutical products in
the United States. While researching the pharmaceutical industry, an
interesting piece of information came up. While the industry has fluctuations
of an increase/decrease in supply and cost, demand is relatively the same year
to year and does not change drastically. This is due to the fact that
pharmaceutical needs, such as prescription drugs, are always in demand
(essential-need), and consumers are likely to still buy the good needed, given
that the good is in a reasonable price range. After reading this report,
further exploring the topic of how the influence of pharmaceuticals in the
United States affects the economy would be of interest. Initially, my thoughts
of the pharmaceutical industry in the given future are that the pharmaceutical
products will continue to be in high demand; with more generics becoming
available in the industry, consumers will have greater variety of choice of
pharmaceutical products. An interesting fact I learned about the pharmaceutical
industry is that the government is currently trying to reduce the cost of
name-brand products or influence support towards generic brand products, which
are already in low cost. The pharmaceutical industry is in constant demand, and
continues to become a stronger industry with new breakthroughs in development
of pharmaceutical products.
"Generics in the United States." Datamonitor
360. N.p., Aug. 2011. Web. 26 Sept. 2012.
<http://360.datamonitor.com/Product?pid=B70CB9A3-8422-4F24-8833-A9BD17682FA4>.
I think it is very interesting that generic drugs are becoming more and more in demand each year. I thought that people would be more inclined to buy the brand-name products than the generics. I know that generics for goods, such as napkins and toilet paper, do not really make a difference when it comes to quality. It is the the smart choice to buy those kinds of generic products, because they are cheaper and work the same as the brand names. However, I thought that people would be less willing to buy generic drugs due to the fact that when it comes to people's health, they seem to be more cautious about the drugs that they use to cure them. I thought that more and more people would be willing to pay the couple extra dollars for brand name drugs that they trust, as opposed to generic drugs that could be quite sketchy to use since it relates directly to your health. Because of this, I found it fascinating that more and more people are willing to switch to generic products rather than name brand ones.
ReplyDeleteDrugs will always be in demand, no matter what the set price is because it is necessary for some people. I even find it hard to believe that the Pharmaceutical companies don't charge higher, with such a demand of drugs being prevalent, but I guess the government intervenes in that. It's smart for the government to start regulating price of drugs and promote generic brands because people are very set on brand names. It'll definitely be hard for a transition to generic drugs.
ReplyDeleteWell given the economic recession and the unknown future state of the medicare system I would have suspected that generic brands would emerge; as long as they are FDA approved. I read that brand name pharmaceuticals will have a projected growth of 0.4% in the nest five years which seems small compared to the growth of the generic brands. However, the brand names already have good market share and standing. CSR plays a part in the choice between generic and brand name pharmaceuticals as those with the better CSR policies are perceived as more credible and that could be an advantage to invest in a brand name versus a generic pharmaceutical despite the expected growth rate of generic pharmaceuticals.
ReplyDeleteVery well written post – you have a great business writing style. You did a good level of analysis of the data in your industry report, but I know you can take it deeper in future posts by asking more questions and hypothesizing what could make things that way.
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