The pharmaceutical
industry in the United States is the largest in the world. The projections of
the pharmaceutical industry in the United States are an estimated "$343.1
billion in 2012 resulting in a 1.8% or more growth rate”, (BMI, 2012, para.2). It is important to recognize that “branded
products account for a large portion of the market”, (BMI, 2012, para.6). As
exhibited in the SWOT analysis there are low restrictions on pricing, allowing
for higher prices to be charged. The market reached a state of stagnation as
what occurs in saturated markets. There is also a strong research and
development base, however this is very costly. (BMI, 2012).
What is
interesting is the state of stagnation that the industry is currently facing; argumentatively this should lead us to focus on the innovation of research and
development. This industry has the potential for innovation due to the constant
and complementary advancement in medicinal science. (BMI, 2012). The prolonged
time it takes to research and develop the drugs is costly in terms of overheads
as well as variable costs. An option that should be investigated further is of
outsourcing research and development, which could potentially lead to lower
overhead costs and faster distribution of the drugs, allowing it to reach the
consumer faster. An important factor to consider since the marketing is conducted directly from the manufacturer to the consumer. (BMI, 2012). What needs to be addressed is how reliable will the
outsourcing be? Will it affect the credibility of the companies who chose to
outsource or will it revolutionize the pharmaceutical industry? The
multi-national industry could overcome the stagnant atmosphere by offshoring
research and development. Could such an innovation be problematic due to
certain legislations or because of some medically untreatable diseases such as
the obesity epidemic in the United States? (BMI, 2012). Despite the restricted
room for growth in the current state of the industry, it is stable, due to the
high demand of prescription drugs, which ideally contributes to innovation.
Interestingly, Abbott Laboratories has already managed to penetrate the personalized
medicine market, which would thrive in terns of innovation of research and
development, (BMI Global marketing strategy, 2012).
Business Monitor
International, Global Marketing Strategy,
Abbott Laboratories.
(August 6, 2012). As retrieved from: http://www.businessmonitor.com.proxyau.wrlc.org/cgi-bin/request.pl?SessionID=9AF50D3A084611E2B1F237187B297F78&view=articleviewer&service=3&article=642931
Business Monitor
International, United States
Pharmaceutical and Healthcare.
BMI Industry Report-United States-Q32012. (June 29,2012). As retrieved
from:
Awesome post, Shahad! This is an ideal blog post – very well written and thorough analysis. The discussion around globalizing the pharmaceutical industry is just fascinating and you summarized it very well.
ReplyDelete