The paper “ The Global Pharmaceutical Industry” is a spectacular example of the case study on business. This case describes the impact of external and internal environment factors that are responsible to change the industry structures and strategies for the drug discovery process, research and development, manufacturing and sales, and marketing of prescription drugs over a period of time. In the initial phase of the pharmaceutical industry, it was less regulated and relatively stable. Although, the scenario was less competitive the requirement of huge investment in R& D and patent protection rights created high entry barriers for new players in the industry.
During the 1960s the main key drivers of the growth was innovation in the development of the new drug while the 1970’ s, legislation regarding the period for patent protection (20 years from the initial filing) resulted in the entry of generic drugs into the market and industry becomes much competitive. This had lead to a price war in the industry and the scenario became highly competitive and government regulated. The decade of 1980’ s was of the evolution of biotechnology firms and because of the strong purchaser power, the share of blockbuster drugs in the bottom line of the companies, intense competition, and government interventions made the industry less profitable with unstable futures. The case throws a light on the key success factors of the pharmaceutical companies across the globe but mainly from the US, Europe, and Japan.
The case covers issues related with global industry environment and driving forces like regulatory and legislative issues, changing demographic scenario of the world, increasing pricing disparities, industry consolidation, mergers and acquisitions, emergence of new potential players like China and India and technology development.
Issues related with corporate social responsibility have been discussed too. All these factors created a greater impact. Some of them were become opportunities in the industry whereas rest became threats to the industry. Aging populations and increasing unmet demands of consumers were creating a tremendous opportunity for the future growth scenario in this industry.
Gerry Johnson, Kevan Scholes, Richard Whittington. "The Environment ." Exploring corporate strategy . Pearson Education, 07 Dec 2007. 52 - 67.
Holland, Sarah. "The Global Pharmaceutical Industry." Gerry Johnson, Kven Scholes, Richard Whittington. Exploring Corporate Strategy 8th edition. Pearson Education, 07 Dec 2007. 608 - 618.