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Essay example - The Global Pharmaceutical Industry
Pages 4 (1004 words)
Case Study: The Global Pharmaceutical Industry: Swallowing a Bitter Pill The global pharmaceutical industry was appropriately described in terms of being characterized as dynamic, evolving and characterized by “the highly risky and lengthy R&D process, intense competition for intellectual property, stringent government regulation and powerful purchaser pressures” (Holland, 2010, p…
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Macro-environmental factors were identified by Vrontis and Pavlou (2008) as consisting of forces such as socio- cultural, political, legal, environmental, economic and technological (p. 290). Using PEST-L analysis to prepare for strategic plans in taking advantage of opportnities in the external environment and addressing eminent threats (Byars, 1991; Cooper, 2000; Morden, 2007), one understands that the consumers of the pharmaceutical industry are patients who need the drugs and medications to address various health concerns. As the prices of medicines were highly dependent on the amount, level and extent of research and development, consumers have no control nor say on the strategies involving prices. As shown in the chart on one of the branded prescription drugs marketed in the U.S., when compared to other areas around the world, the chart would reveal that the price of Lipitor was highest in the U.S. (refer to Appendix A). Buyer power, a tool in Porter’s five forces, is therefore considered restricted and limited as it is highly dependent of the prices dictated by drug manufacturers. In addition, the demographic profile of consumers affect and influence strategies designed by drug manufacturers as these profiles affect the demand and purchase of the products. ...
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