Resources Platform for Management Consultants

Pharmaceuticals

Product

 

Patent-protected drugs for human and/or animal diseases and generic (copy-cat) drugs

 

Distribution

 

Prescription drugs: Pharmacies, hospitals, B2B

Over-the-counter (OTC) drugs: Retail outlets and pharmacies, email orders, B2B

 

Customer

 

Doctors, insurance companies, patients/customers, pharmacies, hospitals, government in some emerging markets

 

Competition

 

Product quality (efficacy, efficiency, convenience), brand names, and control of distribution represent the main basis for competition, together with an increasing price competition from generic manufacturers

 

Key Trends

 

(1) Major treatment areas are cancers, psychoneurology, and cardiovascular

(2) R&D challenges of finding high revenue blockbuster drugs

(3) Price competition from generic manufacturers

(4) Pressure from government and insurance to decrease prices

(5) High risk of not getting approval from regulatory bodies (high attrition rate)

(6) Emerging market opportunities are growing, including for outsourcing

(7) Demographic shift: aging population

 

Revenues

 

Key drivers of revenue are the size of specific treatment domains, buy-in from doctors (best-in-class) speed to market (first-in-class), level of competition, expertise for the formulation of generics, and internal networking/advertising resources

 

Costs

 

High cost (and time) for R&D (discovery/formulation, clinical trials), manufacturing (economy of scale), and marketing (sales, promotion), which represent key barriers to entry 

 

 

 

Resources

 

Turk S (2014) Global Pharmaceuticals and Medicine Manufacturing, IBISWorld Inc, Los Angeles

 

Turk S (2015) Brand Name Pharmaceutical Manufacturing in the US, IBISWorld Inc, Los Angeles

 

Saftlas H (2013) Healthcare: Pharmaceuticals, S&P Capital IQ, New York

 

Lubkeman M et al. (2014) The 2013 Biopharma Value Creators Report, The Boston Consulting Group

 

 

 

 

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