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PHARMACEUTICAL INDUSTRY
Including Key Drivers for change and
major trends in this industry
POLITICAL FACTORS
ECONOMIC FACTORS
New economic reality in 2006 where growth is shifting from mature markets to
emerging ones
Reduce time in which R&D costs could be recouped
Universal coverage systems, i.e NHS in UK too slow or unable to introduce
latest treatments and insurance funded systems i.e In USA some people can
afford treatments, but not all. 15.9% of US population without health insurance
Methods imposed to control pharmaceutical spending
Venture capitalists offering funding for new industry players like biotechnology
companies
Pharmaceutical growth is aligned with GDP growth
Companies costs for providing drug benefits to employees were increasing by
up to 20% annually.
MCOs asked consumers for increasing co-pays on branded versus generic
drugs
Economic recession in Japan
Slowing European economies
Chinese government pouring money into new universities and science parks
Acquisitions of biotechs
Product life cycle has shortened and R&D costs, in-licensing and marketing
costs have risen
Emerging markets accounting for 50% of global GDP growth in 2005
SOCIOCULTURAL FACTORS
Regulators, payers and consumers more carefully weighing the risk/benefit factors
of pharmaceuticals
Lack of public or political support for industry
Ageing populations pressuring health care funding
Increasing patient expectations
Trend by payers to use generic drugs as first line treatment option, only switching
to patented drugs if they fail
Litigious US consumers forced MCO attention on offering optimal rather than
cheaper care leaving the door open for genuine innovation
Japan had worlds most rapidly ageing population, however in 2005 the population
itself began to decline
Emerging markets have enormous populations with high levels of unmet need
In 2006 companies realised that well informed patients were prepared to ask for
drugs by name and were becoming increasingly vocal, well informed, and
demanding
Consumers beginning to purchase across borders with no guarantees of drugs
being safe or even genuine
Average life expectancy in developed countries increased dur8ihng 20 th century by
about 20 years
Public perception of pharmaceutical companies was that they were greedy and
consumers and politicians lost trust
More educated consumers
TECHNOLOGICAL FACTORS
ENVIRONMENTAL FACTORS
None identified
LEGAL FACTORS