Hi! Thanks for such an interesting question.
Before providing a rating, please ask for clarification if you will
need further assistance in the answers I have provided.
This was a tougher project that I thought. Here are the resources I
was able to find. I hope that they would be good for your research. I
provided snippets from the articles I cited whenever it is necessary
so that it will save you time in determining if such resource is
appropriate for your needs. I highly recommend that you read the
documents in their entirety to get a better grasp of the topic
contained therein.
-------------------
I. SWOT ANALYSIS
The following are the SWOT Analysis highlights for the different
pharmaceutical companies. Only highlights are provided here and
additional SWOT elements are provided within the papers. You can get
the detailed analysis by clicking on the links to the articles.
Wyeth
Strengths
- ?Many patent protected drugs to ensure future revenue streams.?
- ?Garner economies of scale in production, administration and
marketing due to consolidation of acquisition?s operations.?
Weakness
- ?Exposure to high debt obligations due to financing need to fund
acquisitions and mergers.?
Opportunity
- ?Strong drug pipeline garnered through mergers and acquisitions may
provide blockbuster drugs in the future.?
Threat
- ?Other large pharmaceutical concerns often battle Wyeth for
ownership of smaller biotech companies, driving up merger and
acquisition costs.?
Pfizer
Strengths
-?Strong pipeline of potential new medicines?
-?Strong brand recognition, especially among health care professionals?
Weakness
- ?Lower ability to sell drugs into a heavy-regulated bureaucratic environment?
Opportunities
- ?Advances in genomics, technology, molecular biology, and
combinational chemistry?
Threat
- ?Inadequate intellectual property protection in most developing countries?
?Pfizer, Wyeth (American Home Products) and the Pharmaceutical Industry
Industry Analysis Project? by Nikolaos Fragkakis, Aaron Rothman and Joshua Schultz
http://www.usfca.edu/alev/Pharmaceuticals(020514).pdf
*************
Med Immune
Strength
- ?Synagis is a strong source of revenue and sales are expected to
continue growing. There are no other drugs being produced or developed
that prevent RSV.?
Weakness
- ?Synagis contributed 86% of MEDI?s revenue, if anything happened to
production or sales it would be detrimental.?
Opportunity
- ?The worldwide flu vaccine market is large and is expected to double by 2010.?
Threat
- ?A Canadian firm, ID Biomedical (IDBE) is developing another
nasal-spray flu vaccine, FluINsure. The product is expected to be
approved in 2008.?
?MEDIMMUNE, INC.? (UNIVERSITY OF OREGON INVESTMENT GROUP)
http://gladstone.uoregon.edu/~rlong/UOIG/MEDI%20Report.pdf
***************
Merck (See page 15)
Strengths
-?Strong product pipeline?
-?Company-wide work redesign initiatives?
Weakness
-?New people in leadership positions?
Opportunities
-?External scientific research alliances?
-?Developing Countries?
- ?New people in leadership positions?
Threats
-?Generic drug companies?
-?Government Regulations?
?Merck stays Immune to Economic Changes? (Krause Fund Research)
http://www.biz.uiowa.edu/krause/MRK_FA03.pdf
*************
Johnson and Johnson (See page 10 for details)
Strength ? ?Company is split into three different business unit:
diverse operations?
Weakness ? ?High R&D expense, fewer major drugs are going to market.?
Opportunity ? ?Potential for revenue generation in developing countries?
Threat ? ?Changing regulatory environment can hinder the drug approval process?
?JNJ Positioned for Growth? (Krause Fund Research)
http://www.biz.uiowa.edu/krause/Johnson_Johnson_F02.pdf
*************
Amgen Inc.
Strengths:
- ?The key to Amgen's growth has been its retention of marketing rights
to products in development.?
- ?Amgen's transition into a fully integrated biopharmaceutical
company was almost entirely due to the success of its therapeutic
protein blockbusters.?
Weaknesses:
- ?There are a number of financial indicators such as the return of
capital employed, equity ratios and net profit margin, which have been
declining over the past three years, reflecting the level of risk that
has been added to Amgen's business model.?
- ?Amgen is a leader in therapeutic protein development but a weak
competitor in the areas of antibodies and small molecules.?
Opportunities:
- ?The acquisition of Immunex will expand Amgen's expertise in new
areas. The company will become the leader in the inflammation market
with one of the strongest combinations of brands?
Threats:
- ?Patent protection will expire over the next five years for a number
of biologics both in the US and EU.?
- ?Looking at the current regulatory environment, there will be a
series of scientific and legal issues to overcome for the approval of
biological products.?
Amgen SWOT Analysis (Datamonitor)
http://dbicinfo.datamonitor.com/help/Comp2.PDF
**********
Our final SWOT analysis is not a company but about the European
Pharmaceutical Industry.
Strength
- ?Western Europe represents the second-largest global pharmaceutical
market after the US.?
Weakness
- ??traditional conflicts of interest between governments and the
pharmaceutical industry.?
Opportunities
- ?Even though the challenges faced by the pharmaceutical sector
remain considerable, the industry continues to defy predictions by
recording higher profit growth than other sectors.?
- ?Harmonisation of the regulatory environment, which is soon to
encompass EU aspirants formally, will provide a growth opportunity for
pharmaceutical companies by allowing faster access to markets.?
Threats
- ?The global economic slow-down, exacerbated by recent financial
scandals spilling over from the US, will put further pressure on the
European drug markets, joining a host of existing challenges facing
the pharmaceutical industry.?
- ?Pharmaceutical products worth up to US$35 billion are due to come
off patent by 2005??
?The European Pharmaceutical Industry ? Opportunities and Challenges?
by Jelena Markovic
http://www.wma.net/e/publications/pdf/2002/markovic.pdf
-----------------------
II. POLITICAL
A. Different political acceptance of certain drugs/treatments:
- ?Why does the Food and Drug Administration (FDA) take longer to
approve asthma medicines than arthritis medicines??
?Even though asthma is responsible for more deaths and more
hospitalizations than arthritis in the United States, the greater
political influence of arthritis sufferers prompts the federal
bureaucracy to work more expeditiously on their behalf.
- "?The crucial thing driving the FDA is safeguarding its reputation.
It takes a long time with approvals because it doesn't want to make
visible mistakes. If people begin to doubt that the FDA is getting it
right, their confidence will erode.?"
- ?In fact, Carpenter's study, reported in the July 2002 issue of the
American Journal of Political Science, has shown that drugs for
diseases that involve greater hospitalization time tend to be approved
more quickly.?
?Prying the lid off the FDA? by Ken Gewertz
http://www.news.harvard.edu/gazette/2002/11.14/03-carpenter.html
B. Differing political attitudes to pharmaceutical companies:
- ?Increasingly, policymakers treat the innovative drug industry like
a political piñata?whacking it with accusations and threats while
expecting it to yield its treasured prizes..?
- ?Others fault drug companies for advertising their wares too
directly and aggressively to consumers??
- ?Negative treatment of drugmakers in the media may have hit its peak
last May, when
ABC News aired an hour-long special report, ?Bitter Medicine: Pills,
Profit and the Public Health,? which leveled a series of one-sided
charges against the pharmaceutical industry. The program stated that
there was little evidence that the huge increase in drug spending over
the past six years has dramatically improved the health of Americans.?
- ?The heat is still on brand-name drugmakers to yield more of their
profits and the patent rights that protect them so that generic
imitators can flood the market with lower-cost versions of today?s
drugs and officeholders can dispense them more widely to public health
program beneficiaries.?
?Demonizing Drugmakers The Political Assault on the Pharmaceutical
Industry? by Doug Bandow
http://www.cato.org/pubs/pas/pa475.pdf
c. Regulations in Europe and US:
- ?One trend that has supported an expansion of regulation is the
perception that healthcare--and specifically affordable access to
pharmaceuticals--is an entitlement, a human right. Many governments
appear to have embraced this viewpoint. But at the same time the
question arises whether they can afford it or not. The issue of
affordable access to pharmaceuticals has become intrinsically bound up
with issues of social justice and democracy.?
- ?Second, regulation has been embraced because of the view that the
demand for industry?s products is inelastic. Since, for many consumers
the cost of drugs is covered indirectly by benefit plans, insurance
programs, or some other system, price is usually not a factor in the
buyer?s purchasing decision. But, this inelastic demand for
pharmaceutical products creates inducements for the industry to
exploit its monopoly power by increasing prices.?
- ?Another element in the mix of government and regulatory influence
in the pharmaceutical market was patents. Again, I would just like to
make the point that we now think of patents as a necessary element for
a strong pharmaceutical industry.?
?Pharmaceuticals in Europe and the United States? by Luigi Orsenigo
http://www.jhu.edu/~iaesbe/telepharma2orsenigofull.html
d. Political Influences of the Pharmaceutical Companies
- ?The pharmaceutical and health products industry, which includes not
only drug manufacturers, but also dealers of medical products and
nutritional and dietary supplements, is consistently one of the top 20
industries for campaign contributions.?
?Pharmaceuticals/Health Products? (Opensecrets.org)
http://www.opensecrets.org/industries/background.asp?Ind=H04
- ?Biotech pharmaceutical companies and BIO have given more than $13
million in individual, PAC and soft money contributions since 1989.
The industry gave more than $4 million in the 2002 election cycle
alone.?
- ?Between 1998 and 2002, the industry spent an additional $89 million
lobbying Congress, the FDA and the White House. Biotech has had a hand
in issues including patent protection and homeland security.?
?The Biotech Boom? By Sheryl Fred
http://www.capitaleye.org/inside.asp?ID=91
- ?In some cases, however, the lobbying is surprisingly specific.
Bristol-Myers Squibb, for instance, is pressing lawmakers to be
exempted from legislation that would endanger its patent on
Glucophage, a diabetes drug that is the company?s biggest seller.?
?Drug Money: The Pharmaceutical Industry's Post-Sept. 11th Lobbying?
(Opensecrets.org)
http://www.opensecrets.org/alerts/v6/alertv6_33.asp
------------------------
III. Economic
A. Pharmaceutical Companies and the Economy
- ?The pharmaceutical industry is one of the largest, longest standing
and most knowledge intensive sectors in the United States economy. It
directly and indirectly supports millions of jobs and pays above
average-level wages to pharmaceutical industry workers. Its economic
and scientific contributions propel many key states and regions.?
- Example: ?The pharmaceutical industry is a major component of the
Illinois economy. In addition to providing more than 22,6001 direct
jobs to Illinois in 2002 (and this estimate appears to be conservative
based upon industry sources), the industry is an important contributor
to the fiscal position of the state and its local governments,
including the corporate taxes it generates, the personal income taxes
that its knowledge workers contribute, the sales taxes generated by
purchases of its products and the taxes collected by the industry?s
ripple effects on employment and income in other sectors.?
- ?Pharmaceuticals and related activities are among the most
research-intensive sectors in the economy, seeding its future
discoveries by investing over $27.4 billion in research and
development in the United States.2 The pharmaceutical industry
accounted for almost 8 percent of total industrial research and
development investment in the United States in 1999 and that probably
approached 10 percent in 2003.?
?The Illinois Pharmaceutical Industry? by Ross DeVol, Rob Koepp, Kevin
Klowden and Armen Bedroussian
http://www.milkeninstitute.org/pdf/il_pharm_report_0204.pdf
- ?Biopharmaceuticals employed 406,700 people in 2003, and when the
full multiplicative impact is captured, is responsible for 2,724,800
jobs and 2.1 percent of total employment in the nation. Each job in
the industry creates another 5.7 jobs elsewhere in the economy,
substantially above the average for all industries.?
- ?Biopharmaceuticals was directly responsible for $63.9 billion in
real output (based on inflation-adjusted 1996 dollars) in 2003 and a
total of $172.7 billion when the economic ripple effects across other
sectors are incorporated.?
- ?Many state economies, and the District of Columbia, are highly
dependent on the biopharmaceutical industry, including New Jersey,
Massachusetts, Indiana, North Carolina, Connecticut, Pennsylvania,
California, Utah, Maryland, New York, Rhode Island, Illinois and
Washington.?
?Biopharmaceutical Industry Contributions to State and U.S. Economics?
(Milken Institute)
http://www.milkeninstitute.org/pdf/biopharma_report.pdf
B. Links between economic prosperity and level of healthcare:
- ?As key economies stagnated in 2002, challenges in funding
healthcare advances remained. Ageing populations created further
pressures, since the "over-65s" consume four times as much healthcare
per head as those below 65. This combined with more expensive high
technology solutions and increasing patient expectations created an
unsustainable situation.?
- ?On the other, insurance-funded systems (such as that in the US)
were able to afford the latest innovations but were unable to share
those benefits with an increasing part of the population.?
- ?In 2002 the number of US citizens without health insurance rose by
5.7 per cent to 43.6 million, the biggest single annual increase in a
decade.?
- ?In response to these pressures, payers used a wide variety of
methods to control spending on pharmaceuticals... Some put the
emphasis on the supply side - the manufacturer and distributor. Some
emphasised the demand side - the prescriber and the patient. Other
methods affected both.?
?THE GLOBAL PHARMACEUTICAL INDUSTRY? (Pages 4 and 5) by Sarah Holland*
and Bernardo Bátiz-Lazo
http://econwpa.wustl.edu:8089/eps/get/papers/0405/0405002.pdf
C. Global Trade Issues:
- ?Health-related industries have brought considerable pressure to
bear on international authorities to reduce tariff barriers and to
harmonize and streamline regulations perceived as non-tariff barriers
to trade. Many developing countries rely on revenue derived from
tariffs to fund public healthcare services and shield indigenous
industry from outside competition.?
- ?Lack of strong IP harmonization, particularly in developing
countries, continues to pose barriers to market entry for innovative
medical product manufacturers. The private sector has pressed domestic
and international institutions to adopt international IP standards and
enforcement measures. Healthcare manufacturers and policymakers have
been grappling with the complex issues related to the application of
IPR to developing countries for some time.?
- ?Diversion and parallel trade are known to facilitate the
counterfeit drug trade and pose a threat to preferential drug pricing
schemes being undertaken by certain life sciences companies. The World
Health Organization estimates that 10% of global pharmaceutical
commerce consists of counterfeit products, an increase from 5% several
years ago.?
- ?The North-South disparities in terms of indigenous innovation are
evident in that less than 1% of U.S. patents were granted to
applicants from developing countries in 2001. Developing countries
continue to engage in trade of products versus trade of technology,
perpetuating the environment in which counterfeiting and parallel
trade persists.?
?Trade Issues of Concern to the Healthcare Industry? (Ernst & Young LLP)
http://www.ey.com/global/download.nsf/International/Trade_Issues_in_Health_Care_WEF2003/$file/Trade%20Issues%20in%20Health%20Care%20WEF2003.pdf
D. Global Pricing of Pharmaceuticals
- ?One issue that warranted focus was the mix of brand name and
generic drugs, which varied from country to country, affected price,
and reflected complex social, political, medical and economic
trade-offs.?
- ?A second major area of concern is the appropriate adjustments
necessary to reflect not only price, but also true purchasing power.
Pricing comparisons, adjusted for currency valuations, must be
adjusted a second time using the well-accepted Purchasing Power Parity
index, or PPP.?
?Pricing of Pharmaceuticals? by Dr. Mike Magee
http://www.healthpolitics.com/media/prog_30/transcript_prog_30.pdf
- ?The pharmaceutical industry is the most research intensive of U.S.
industries that support their research and development with private
funds (as distinguished from defense and space contractors). In 2002,
Big Pharma companies devoted 18 percent of their sales revenue to
research, development, and testing activities.?
- ?Once a patented drug enters the market, its producer has some
degree of monopoly power ? that is, the ability to hold the product?s
price appreciably above the current production cost without incurring
dramatic losses in sales. This is a broader definition of monopoly
power than the classic notion of a market in which there is only one
seller. Few drugs lack any substitutes at all.?
- ?In 2001, U.S. pharmaceutical companies were reported to have spent
$2.7 billion, or roughly 2 percent of domestic sales, on
direct-to-consumer advertising, along with $5 billion on ?detailing?
efforts and $11 billion for the distribution (often by detailers) of
free samples.?
?The Pharmaceutical Industry ? Prices and Progress? by F.M. Scherer, Ph.D.
http://www.iwandarmansjah.web.id/attachment/at_927.pdf
Additional links to Resources about Pricing in the Global Pharmaceutical Markets
?The structural dynamics of the pharmaceutical industry? by Kylie
Douglas and Robert Guell
http://igeographer.lib.indstate.edu/guell.pdf
?The Impact of Drug Reimportation and Price Controls? By David G.
Tuerck, John Barrett, Douglas Giuffre, and Zaur Rzakhanov
http://www.ipi.org/ipi%5CIPIPublications.nsf/0/A3E22938B669BD0686256F1700563782/$File/PR-184-DrugReImport-3.pdf?OpenElement
E. Outsourcing of Pharmaceutical Operations
- ?The report finds outsourcing of discovery research, clinical trials
and formulation manufacturing provides pharmaceutical companies with a
highly effective approach to declining productivity and the pressure
for consistent, high- growth financial returns.?
- ?Outsourcing allows these companies to pursue potential new revenue
streams outside of their core focus areas??
- ?By contrast, most biotech companies have no choice but to outsource
given their financial and human resource constraints and high capital
expenditures for equipment and facilities.?
?Report identifies increasing outsourcing by pharma? (Inpharma.com)
http://www.inpharma.com/news/news-ng.asp?n=55046-report-identifies-increasing
F. Economic Drivers
Based on the researches provided we can see that the global
pharmaceutical industry has the following economic drivers.
- Government Regulations
- R&D Expenditures
- Patent Issues
- Promotional Expenditures
- Biotechnology
- Global Competition
- Mergers and Acquisitions
The link provided is specifically for Europe but it discusses the
global situation as well for the pharmaceutical industry.
?The Pharmaceutical Industry in Figures?(EFPIA)
http://www.biologyinbusiness.org/resources/efpia.pdf
G. Additional Resources for Economic Figures in the Pharmaceutical Industry
?CEO Compensation in Established Pharmaceutical Firms? (Starting at Page 29)
http://bear.cba.ufl.edu/stuart/CEOCompensationinEstablishedPharmaceuticalFirms.pdf
?PHARMACEUTICALS? by William Hurt and Marnie Morrione
http://www.ita.doc.gov/exportamerica/NewOpportunities/no_pharmaceuticals.pdf
-----------------------
IV. SOCIAL IMPACT
A. Changes in attitudes to treatment/healthcare; changes in behavior
opening up new product potential & the emergence of Aids:
It would be of help to look at the historical changes of the FDA
regulation of approving drugs due to social concerns so as to answer
your question.
- ?The history of federal regulation of new drug approvals in the
United States dates back to 1938.30 That year saw a major public
health crisis in the distribution of elixir sulfanilamide, a solution
which, notwithstanding its medicinal properties, also contained
diethylene glycol, a poisonous solvent. Dozens of fatalities resulted,
and public outrage over the incident helped to build impetus for the
passage of the Federal Food, Drug, and Cosmetic Act (FFDCA). This
legislation was noteworthy because it contained, for the first time,
the statutory requirement that companies seeking to introduce new
drugs to the marketplace first seek FDA approval by demonstrating drug
safety for human consumption.?
- ?The 1962 amendments to the FFDCA resulted in a number of changes to
the existing FFDCA statute? Where previously the regulatory focus was
limited to determining whether the new drugs were safe, the amended
mandate added a requirement that new drugs also be examined to
demonstrate their effectiveness.?
- ?Originally promulgated in 1987, the ?Treatment IND? regulations
serve to create a new protocol in the FDA drug approval regime, making
experimental treatments available to PWAs on a pre-approval basis.131
In contrast to the earlier compassionate use approach, treatment INDs
are not primarily based on a case-by-case FDA review strategy.
Instead, the approach involves identification of an experimental
treatment with promising initial trial results, and allowing limited
access to the treatment for desperately ill patients??
?AIDS, EXPERIMENTAL DRUG APPROVAL, AND THE FDA NEW DRUG
SCREENING PROCESS? Michael D. Greenberg, Ph.D.
http://www.law.nyu.edu/journals/legislation/articles/vol3num2/greenberg.pdf
B. Attitudes to Cancer
- ?To date, many big drug firms have ignored the oncology market,
preferring to concentrate on more lucrative areas of drug development,
like cardiovascular diseases, or cholesterol treatments, but today
just under half of all the drugs now in development are
cancer-related, experts say.?
- ?Dozens of other pharmaceutical and biotechnology companies,
including market heavyweights like Genentech and Bristol-Myers Squibb,
are making advances in oncology treatment. In 2003, there were about
400 new cancer drugs in development??
- ?At the same time, the FDA is working to get the new drugs approved
and delivered to the patients who need them.?
?New breed of drugs offers hope in cancer war? By Roland Jones
http://www.msnbc.msn.com/id/5076908/
C. Heart Disease
- ?The problem amounts to a tantalizing market for the pharmaceutical
industry and perhaps for drug counterfeiters providing cheap knockoffs
of expensive AIDS drugs to African countries battling that crisis.?
- ?Another potential ally in the battle, Prof. Leeder suggests, could
be multinational companies with farflung units and outsourced
operations that have a stake in keeping those workers healthy.?
?More Heart Disease To Hit Poorer Nations Unless They Act Now? By Ron Winslow
http://www.worldheart.org/pdf/press.recent.articles.wallstreeteuropeasia.april04.pdf
D. Direct-to-Consumer Advertising
Positives:
- ?Preliminary results of a Food and Drug Administration survey,
released in January, also indicate that most physicians view
direct-to-consumer (DTC) ads as one of many factors that affect their
medical practices and their interactions with patients.?
- ?Preliminary results of a Food and Drug Administration survey,
released in January, also indicate that most physicians view
direct-to-consumer (DTC) ads as one of many factors that affect their
medical practices and their interactions with patients.?
?The Impact of Direct-to-Consumer Advertising? By Carol Lewis
http://www.fda.gov/fdac/features/2003/203_dtc.html
Negatives:
- ?The study found that, on average, a 10% increase in DTC advertising
of drugs within a therapeutic drug class resulted in a 1% increase in
sales of the drugs in that class.?
- ?And the ads are resulting in consumer interest in prescriptions --
nearly a third (30%) of adults say they have talked to their doctor
about a drug they saw advertised, and 44% of those who talked to their
doctor received a prescription for the medication they asked about.
This means that 13% of Americans have received a specific prescription
in response to seeing a drug ad.?
?Impact of Direct-to-Consumer Advertising on Prescription Drug
Spending? (The Kaiser Family Foundation)
http://www.kff.org/rxdrugs/loader.cfm?url=/commonspot/security/getfile.cfm&PageID=14378
E. The Generics Issue
- ?There are obvious public health and economic advantages in the use
of generics: first, there is a guarantee of a standard quality for a
multisource product. Second, the introduction of generics tends to
lower drug prices.?
- ?But the introduction of generics also drags down the prices of the
branded versions of the drug.?
- ?In the context of the present international policy discussion, the
focus of the debate on generics points to the impact of intellectual
property rights of drugs that are patent protected in developed
countries, on R&D incentives and on accessibility in developing
countries.?
- ?Many consumers and prescribers have a negative perception of the
quality of generics.?
?Generics Policies and Access to Drugs in Developing Countries? by Juan Rovira
http://www.iipi.org/activities/forums/IP&Public_Health/papers/rovira.pdf
Another debate is brewing in as Biogenerics is trying to make its way
to the market.
?Biogenerics debate rumbles on? (Inpharma.com)
http://www.inpharma.com/news/news-ng.asp?n=54850-biogenerics-debate-rumbles
F. TRIPS ISSUES
- ?First of all they appear as an unprecedented step towards the
homogenisation of the patent regime in pharmaceuticals, forcing DCs
(and to a lesser extent LDC?s) to conform to the standards of the
patent system of the most developed countries.?
- ??the signing of the TRIPS has enabled the large multinational
pharmaceutical companies, actively supported by a group of countries
led by the United States, to force the countries of the Southern
hemisphere to modify their national legislations to come into line
with the types of pharmaceutical patent regime that protect the
interests of the most developed countries? firms.?
?AIDS and TRIPS Pharmaceutical Patents, Generic Drugs and Public Health
Under The TRIPS Agreement? by Benjamin Coriat and Fabienne Orsi
http://www.druid.dk/conferences/summer2003/Papers/CORIAT_ORSI.pdf
G. Additional Resources:
?Government and Market Failures in the Pharmaceutical System? by
Jillian Clare Cohen, Ph.D.
http://www.iipi.org/activities/forums/IP&Public_Health/papers/Cohen.pdf
?Assessing the Impact of Pharmaceutical Innovation: A Comprehensive
Framework? by Jack A. Meyer, Ph.D.
http://www.npcnow.org/resources/PDFs/meyerfinal.pdf
?A Bitter Pill to Swallow?? by Shami Nissan
http://www.innovestgroup.com/pdfs/2003-08-28bitter_pill.pdf
?THE PHARMACEUTICAL INDUSTRY AND SOCIAL RESPONSIBILITY:
IDEALISM WITHOUT ILLUSION AND REALISM WITHOUT RESIGNATION? by Klaus M. Leisinger
http://www.novartisfoundation.com/pdf/novartis_social_responsibility.pdf
?Insights? (PHRMA.org)
http://www.phrma.org/publications/publications/2003-10-07.892.pdf
------------------
V. TECHNOLOGY
A. Technology and Competitive Advantage
?The response to the question about which areas were receiving the
heaviest IT investments over the next 12 months made it clear that IT
infrastructure investment at these companies was more focused on the
earliest stages in the drug development pipeline. Of the various
stages discussed with the interviewees, basic research and clinical
received the most mentions. R&D, which includes basic research,
discovery, and all of development, received 39% of the total mentions.
Regulatory compliance received 26% and clinical trial activity
received 18% of the total investment area mentions. Respondents
suggested that these investments came out of "frantic" attempts to
capture, manage, store, and share data. Many said that their ability
to generate data far surpassed their ability to analyze it.?
?Making Connections in the Life Sciences: A Role for Service
Providers in Data Integration an d Electronic Data Capture
Projects? by Kara Yokley & Michael Swenson
http://www.unisys.com/commercial/insights/insights__compendium/Making_Connections_in_the_Life_Sciences_Sponsored_by_Unisys.pdf
B. New Development Process Technology Investment Survey
- Our next discussion focuses on the technology that concerns the
development process and the percentage of companies that investment in
them.
Lab automation and/or LIMS ? 54% of the respondents
Knowledge management and/or collaboration tools ? 52%
Database management and/or integration - 50%
You can check out pages 6, 7 & 10 of the following to get more figures
about the technology investments of pharmaceutical companies.
?Making Connections in the Life Sciences: A Role for Service
Providers in Data Integration an d Electronic Data Capture
Projects? by Kara Yokley & Michael Swenson
http://www.unisys.com/commercial/insights/insights__compendium/Making_Connections_in_the_Life_Sciences_Sponsored_by_Unisys.pdf
- Digital technology is also being used to speed up the process of approving drugs.
?A major component is the use of public-key infrastructure
authentication and security technology, which relies on special
mathematical formulas, or keys, to encode a message from a sender and
make it readable by the proper recipient.?
?By using PKI technology, documents sent electronically by
participants will be legally enforceable, will comply with rules from
drug regulators and can be digitally signed so senders and recipients
are trusted, Secrest said.?
?Pharmaceutical industry looks to digital standards to speed drug
approvals? by Todd R. Weiss
http://www.computerworld.com/printthis/2004/0,4814,93737,00.html
C. Important Trends & Emerging Technologies in the Pharmaceuticals Industry
i. The need for more effective and advanced document systems
?Pharmaceutical Industry White Paper? (All Associates Group)
http://allassociates.com/starproject/pdf/Pharmaceutical_Industry_White_Paper-Nov_2002.pdf
ii. Usage of RFID Technology
?Although pharmaceutical organizations have been using RFID technology
for years in niche applications such as tracking lab samples, these
companies have recently begun examining the potential benefits of
using RFID to track finished products. Because of the high value of
pharmaceutical products, the cost barrier for tagging products within
the supply chain is relatively low. In addition, the Food and Drug
Administration (FDA) has acknowledged the benefits of a universal
electronic pedigree, which will identify and track individual
pharmaceutical products throughout the supply chain.?
?Use of RFID Technology by Pharmaceutical Industry to Rapidly Increase
During Next 18 Months, Says META Group? (TMCNet.com)
http://www.tmcnet.com/usubmit/2004/aug/1067799.htm
?Up to 7 percent of all drugs in the international supply chain may be
counterfeit. RFID-based solutions could save the industry more than $8
billion by 2006.?
?ITEM-LEVEL VISIBILITY IN THE PHARMACEUTICAL SUPPLY CHAIN:
A COMPARISON OF HF AND UHF RFID TECHNOLOGIES? (Philips Semiconductors,
TAGSYS & Texas Instruments Inc.)
http://www.ti.com/tiris/docs/manuals/whtPapers/jointPharma.pdf
iii. Drug Delivery
?Advances in drug delivery systems? by CULLEN T. VOGELSON
http://pubs.acs.org/subscribe/journals/mdd/v04/i04/html/MDD04FeatureVogelson.html
iv. Mobile Sales Technology
?Perhaps the greatest chasm between the information available and
those that need it exists within the sales forces of pharmaceutical
companies. Vast sources of information are available that, when
brought to bear, provide the ability to impact the market with
tremendous results. Knowing who the right doctors are, when and how
often to visit them and what message to share are the critical success
factors for a successful sales strategy.
Pharmaceutical sales representatives are mobile; and their time spent
in the field untethered from the office without immediate access to
critical market and product data is almost 100%.?
?The mobile pharmaceuticals sales challenge? (Extended Systems)
http://whitepapers.telecomasia.net/data/document.do?res_id=1085508975_68
Source: http://whitepapers.telecomasia.net/rlist/term/Pharmaceutical-Industry.html
-------------------------
VI. LEGAL ISSUES
A. Legislation on Pricing
1. United States
State level Legislation
- ?Downward pressure on the prices that pharmaceutical companies can
charge in the US also may result from enacted and proposed legislation
seeking to limit or control state drug expenditures.?
Ex.? Under the state of Maine?s ?Rx Program?, enacted May 2000, for
example, the state would favor drugs sold by manufacturers who
voluntarily agree to give price rebates to Maine?s uninsured citizens,
and would penalize manufacturers who refuse to provide the discounts
by requiring prior authorization under Medicaid (see 10 Health Law
Rep. (BNA) 423 (15th March, 2001)?
Federal Level Legislation
- ?Recent legislation regarding the reimportation of drugs
manufactured in the US was also intended to reduce price flexibility
for pioneer drug manufacturers. The Medicine Equity and Drug Safety
Act of 2000 (MEDSA), which amends the Federal Food, Drug, and Cosmetic
Act (FFDCA), allows the limited reimportation of drugs back into the
US.?
You can also read the effects of such legislation the pharmaceutical
situation on a global scale by reading the link to our next document.
?US PHARMACEUTICAL PRICING: SYSTEM CHANGES AND GLOBAL EFFECTS? by
Kathleen M. Sanzo and Stephen Paul Mahinka
http://www.morganlewis.com/pubs/0DD7F699-C48C-4264-9AAC61BF81A42AE9_Publication.pdf
- General Effects of Price Regulation:
?First, regulation may affect cost and quality through its effects on
R&D. Regulation-induced reductions in pharmaceutical expenditures mean
lower profits and lower cash flows for pharmaceutical firms. Lower
expected profits translate into a reduced supply of external capital,
which translates into reduced investment.?
?Second, regulation may affect cost and quality through prices and use
of existing products.?
?The Effects of Pharmaceutical Price Controls on the Cost and Quality
of Medical Care:
A Review of the Empirical Literature? by Daniel P. Kessler
http://www.ita.doc.gov/td/chemicals/phRMA/PhRMA%20-%20ANNEX%20C.pdf
2. Europe
- ?The relationship between the pharmaceutical industry and government
is an important determinant of the government approach to managing
pharmaceuticals at the national and EU level. Some issues such as
aspects of market authorization have been harmonized and are uniform
across EU member states. However, other aspects of regulating the
pharmaceutical industry vary across Europe according to the balance
between pursuing health policy versus industrial policy objectives at
national levels.?
- ?Although pharmaceutical policy is primarily determined at the
national level by individual EU member states, there is nevertheless a
considerable amount of relevant legislation at the EU level. The
European Commission (EC) has an expanding role in this area, with the
legal duty to advocate and reinforce the principles of European law,
including the free movement of goods and undistorted competition.?
?Regulating pharmaceuticals in Europe: an overview? Elias Mossialos,
Tom Walley and Monique Mrazek
http://www.mcgraw-hill.co.uk/openup/chapters/0335214657.pdf
- ?National governments and their competent authorities have
implemented a series of measures, both controls and incentives to
influence supply of and demand for pharmaceuticals. Some countries
have given greater emphasis to supply others to demand.
The supply-side controls are aimed at limiting the cost of reimbursed
medicines to the authorities, by controlling their price and/or
reimbursement? and by limiting their availability through the use of
positive and negative lists...?
You can see different examples of these types of regulations per
European country in page 3 of the link below.
?OVERVIEW OF PHARMACEUTICAL PRICING AND REIMBURSEMENT
REGULATION IN EUROPE? by Panos Kanavos
http://pharmacos.eudra.org/F3/g10/docs/synthesis.pdf
B. Legislation on Patents
The TRIPS Agreement ? ?The TRIPS Agreement was one of the many trade
agreements agreed upon during the Uruguay Round, and included in the
new international trading system, governed by the World Trade
Organization (WTO). The Agreement covers a range of intellectual
property issues beyond patents, such as trade- marks, industrial
designs, and copyright applicable to any sector. It provides minimum
standards for intellectual property law and procedures and remedies so
rights holders can enforce their rights effectively.?
?The Agreement does provide a degree of freedom to member states. For
example, states can deny patent protection for specific inventions
(Articles 27.2 and 27.3), such as ?diagnostic, therapeutic and
surgical methods for the treatment of humans or animals?; and plants
and animals (other than microorganisms) and biological processes
(other than microbiolgoical) for their production.4 The Agreement also
provides governments with the authority to issue a compulsory license
for a pharmaceutical license without the permission of the patent
owner when it can be justified in the public interest.?
Effects:
- ?A much anticipated cost of the TRIPS Agreement is that it gives
pharmaceutical firms greater scope for price discrimination, a
rational move for profit-maximizing firms but exploitative to persons
in developing countries.?
- ?Arrow (1962) argued that the entrenched patent monopolist has
weaker incentives than a ?would-be? entry firm to initiate an R&D
program that would produce substitutes, even superior quality ones,
than for goods, which were already, profit generating.?
?Pharmaceutical Patents and International Commitments: The Inherent
Tensions and Implications for Public Health? by Jillian Clare Cohen
PhD and Patricia Illingworth PhD
http://www.cpsa-acsp.ca/paper-2003/cohen-illingworth.pdf
You might want to read on the next links as well to have a more
complete view of patent issues.
?The Pharmaceutical Industry and the Patent System? by Bruce Lehman
http://www.earthinstitute.columbia.edu/cgsd/documents/lehman.pdf
?Canada and Brazil Dealing with Tension between Ensuring Access to
Medicines and Complying with Pharmaceutical Patent Standards: Is the
Story the Same?? by Jillian Clare Cohen, PhD
http://www.utoronto.ca/cphs/WORKINGPAPERS/CPHS2003_Jillian_Cohen.pdf
------------------------
VII. ENVIRONMENTAL
Background: Before we go into the issues it would be nice to look at
this document from the FPA and treat it as a primer to the
environmental consideration in pharmaceutical manufacturing.
?The production of pharmaceutical products can be broken down into
three main stages: 1) research and development; 2) the conversion of
organic and natural substances into bulk pharmaceutical substances or
ingredients through fermentation, extraction, and/or chemical
synthesis; and 3) the formulation of the final pharmaceutical
product.?
?Pharmaceutical batch processes use numerous raw materials and
generate wastes and emissions. In general, the waste and emissions
generated depend on the raw materials and equipment used, as well as
the manufacturing process employed. In designing bulk manufacturing
processes, consideration is given to the availability of the starting
materials and their toxicity, as well as the wastes (e.g., mother
liquors, filter residues, and other by-products) and the emissions
generated. A description of some of the considerations given is
provided in Section V, Pollution Prevention Opportunities.?
?Profile of the Pharmaceutical Manufacturing Industry? (EPA)
http://www.epa.gov/compliance/resources/publications/assistance/sectors/notebooks/pharmapt1.pdf
Issues:
- ?Pollution outputs in the pharmaceutical industry consist mainly of
air emissions, wastewater, and residual wastes. Pollution is caused by
chemical processes associated with the manufacture of
pharmaceuticals?Many chemical solvents released during production in
the pharmaceutical industry are considered hazardous or priority
pollutants under the Clean Air Act and/or Clean Water Act.?
- ?Over years of research the pharmaceutical industry has come to the
conclusion that waste minimization and other forms of pollution
prevention are far more effective than pollution control, remediation
of past problems, and protecting specific environmental media through
end-of-pipe treatments and pollution controls.?
?Pharmaceutical Industry? by Heather R. Rulo, Sheri Z. Evans, Antonio D. Stephens
& Mark A. Terry
http://wey238ab.ch.iup.edu/olccii/student2/rulo.htm
AIG online enumerates a number of environmental issues thrown at
pharmaceutical companies. Here are some of them.
- ?Air emissions that include volatile organic compounds (VOCs) and acid gases?
- ?Soil contamination from past activities?
- ?Ground and surface water contamination from past activities?
?Pharmaceutical Companies? (AIG)
http://home.aigonline.com/AIGEnvironmental/ind_profile/read_profile/1,1990,MTI0LS9BSUdFbnZpcm9ubWVudGFsL0luZHVzdHJ5X0lzc3Vlcy1JbmR1c3RyaWVzIHdpdGggRW52aXJvbm1lbnRhbCBJc3N1ZXM=,00.html
---------------------------
VIII. CORPORATE FINANCE
A. The Structure of the Pharmaceutical Industry:
i. Key Business Drivers
- ?Crowding of Major Therapeutic Categories?
- ?New and Global Competition?
- ?Many Weak New Product Portfolios?
- ?Increased Regulatory Initiatives and Requirements?
- ?Increased Socio-political Price and Delivery Pressures?
- ?The Wal-Mart Supply Chain Model?
- ?Exponential Advances in Science & Technology?
?The Pharmaceutical Industry: Dramatic Changes in the First Decade of
the 21st Century? (ARC Advisory Group)
http://domino.automation.rockwell.com/applications/gs/region/gtswebst.nsf/files/RockwellPharmaBriefv6.pdf/$file/RockwellPharmaBriefv6.pdf
ii. Research Development Factors:
- ?Under the industry structure that prevailed until the mid-1970s,
for-profit firms were almost all large enterprises, fully integrated
from drug discovery through clinical development, regulatory affairs,
manufacturing, and marketing. Most commercial drug discovery was
conducted in house and, at least in the early part of this period, was
dominated by large-scale ?random screening? programs with limited
requirements for deep knowledge about fundamental physiological
processes?Pharmaceutical companies appropriated returns from R&D
through a combination of extensive patenting, proprietary know-how,
brands, regulatory barriers to entry, and favorable product market
conditions?.In the upstream not-for-profit sector, taxpayers (and to
some extent philanthropists) supported curiosity-driven research
conducted at cottage industry
scale inside government labs, universities, research institutes, and
teaching hospitals.?
- ??in the 1980s the for-profit side of the industry experienced
significant entry from biotechnology companies, many of which
positioned themselves as an intermediate sector between academic
research institutions and Big Pharma. By the mid- 1990s several
thousand biotech ventures had been launched, and several hundred had
reached sufficient scale to be an important force in the industry.
Existing vertical relationships were disrupted and reformed, with the
new companies straddling (and blurring) the divide between for-profit
and not-for-profit research.?
?The Changing Structure Of The Pharmaceutical Industry? by Iain M. Cockburn
http://www.ehealthstrategies.com/files/cockburn.pdf
iii. Corporate Mergers
Reasons for mergers in the Pharmaceutical Industy:
- ?For an integrated company that faces patent expirations and gaps in
its pipeline of follow-on products, merging with a firm that has a
pipeline but lacks adequate marketing and sales capacity to optimally
launch its own drugs may create value. Merger may also offer the
potential for cost reductions in administration and possibly other
duplicative functions, thereby offsetting the negative effect of
declining revenues on net profits and generating economies of scale in
the longer run.?
- ?We hypothesize that for these smaller, R&D-focused firms, merger is
more likely to be motivated by growth motives. Since the relevant
products and technologies are usually patent-protected and the human
capital is highly specialized, acquiring a firm that owns
complementary assets may be cheaper than trying to develop needed
assets in-house. Conversely, being acquired can be an attractive exit
strategy for a small firm.?
- ?We find evidence supporting our hypothesis that for large firms
mergers are, in part, a response to expectations of excess capacity
that will decrease labor productivity.?
- ?Another function of M&A is to transfer assets from ineffective to
effective managers.?
- ?Another explanation for mergers is they are the most sensible way
for firms to acquire specific assets. For example, a foreign
pharmaceutical firm that wants to establish a presence in the U.S.
market may acquire a U.S. firm that already has an established sales
force and relationships, including with the FDA.?
- ?Some have argued that mergers occur when managers have aspirations
to run a larger company, they have considerable cash, and agency
controls are imperfect.?
?MERGERS AND ACQUISITIONS IN THE PHARMACEUTICAL AND BIOTECH
INDUSTRIES? by Patricia M. Danzon, Andrew Epstein and Sean Nicholson
http://dsl.nber.org/papers/w10536.pdf
You may also want to look at the list of historical pharmaceutical
mergers in our next link.
?Top 10 Pharmaceutical Mergers? (DrugIntel)
http://www.drugintel.com/pharma/mergers.htm
This example and study of cross border mergers and takeovers will be
of help as well.
?Profit and Value Creation in Pharmaceutical Industry Cross-Border
Mergers: A case study of the Astra/Zeneca and Pharmacia/Upjohn
mergers? by Larysa Tkachenko and Seyena Fiagbedzi
http://www.handels.gu.se/epc/archive/00001348/01/Tkachenko_2001_9_inlaga1.pdf
iv. Future Prospects
- ?Although the COX-2 market is now likely to remain static, two key
COX-2 products are expected to directly benefit from withdrawal of
Vioxx. Forecasts of both Pfizer's Celebrex and Abbott/ Boehringer
Ingelheim's Mobic (meloxicam) have been increased following this
event.?
?Life after Vioxx - $2.5 billion up for grabs?? (Inpharm.com)
http://www.inpharm.com/External/InpH/1,2580,1-3-0-0-inp_intelligence_art-0-250081,00.html
- ??HIV drug market will grow to more than $8 billion by 2013.?
?Decision Resources?
http://pharmalicensing.com/company/disprelease/1083162008_408fbd98ad216
- Psoriasis market will reach $1.1 billion by 2013
?Psoriasis? by Cynthia Mundy, Ph.D., Vickie Lew and Claire Herman, M.P.H
http://www.decisionresources.com/stellent/groups/public/documents/abstract/dr_007242.hcsp
- ?Developments within the fields of proteomics, bioinformatics,
imaging technologies, high-throughput screening (HTS) programmes,
diagnostics, assay development and nanotechnology, as well as the
developing trend towards licensing agreements with smaller biotech
firms, are all helping to change the industries practices and shape
its future development. Global drug discovery spending is estimated to
increase 28% by 2006.?
?Future Drug Discovery 2005? (Health & Pharmaceutical)
http://www.bbriefings.com/cdps/cditem.cfm?NID=1057&CID=5&CFID=3276535&CFTOKEN=83382515
Search terms used:
?pharmaceutical industry? market SWOT analysis
politics political influences
economy economic drivers prosperity healthcare
social effects AIDS ?heart disease? new drugs
emerging technology investments
legal legislation regulation
environmental issues
structure mergers future outlook forecasts
I hope these links would help you in your research. Before rating this
answer, please ask for a clarification if you have a question or if
you would need further information.
Thanks for visiting us.
Regards,
Easterangel-ga
Google Answers Researcher |
,
2 Comments
)