Introduction:
The development of the pharmaceutical industry since World War II led to the discovery and use of new and effective drug substances. It also changed the role of the pharmacist. The scope for extemporaneous compounding of medicines was much diminished and with it the need for the manipulative skills that were previously applied by the pharmacist to the preparation of bougies, cachets, pills, plasters, and potions. The pharmacist continues, however, to fulfill the prescriber's intentions by providing advice and information; by formulating, storing, and providing correct dosage forms; and by assuring the efficacy and quality of the dispensed or supplied medicinal product.
The evolving nature of the chain drug industry may seem to favor large chains, but the foundation of the business remains the same, according to Brooks Pharmacy senior vice president of operations Bill Welsh. "It's all about the connection each store makes with its customers," he notes. The changes in the industry have forced us to alter many of the ways we do business, but the true fundamentals of the drug store business remain the same. There may be fewer drug chains than there were a few years ago, but not a smaller number of drug stores. Certainly, the demand for the products and services offered by drug stores have not declined (Warwick, 1997). According to the Chain Drug Review, the pharmacy automation market in the United States, which traces its origin to the introduction of pill-counting machines in the 1970s, is on pace to reach nearly $2.5 billion within the next five years (2004). The continually increasing demand for accuracy, safety, industry standards and competency in the pharmacy environment by regulatory authorities, manufacturers, health care professionals and consumers has spurred the growth of this market, asserts Business Communications Co. Products in the outpatient market include automated dispensing systems, packaging equipment, and samples management and automated counting machines. The packaging equipment component is the most successful market sector in the outpatient pharmacy automation market with over 55% of sales, followed by automated dispensing systems at nearly 30%.
A pharmaceutical company (or drug company) is a company licensed to discover, develop, market and distribute drugs. Drug Development is considered a costly and intensive process. The cost of a new drug (new chemical entity) is estimated be about 1 billion USD. Apart from that, a company may apply and be granted a patent for the drug or the process of producing the drug about for about 20 years. Only after rigorous study and testing, which can take as long as 12 years, will governmental authorities grant permission for the company to market and sell the drug. Patent protection allows the owner of the patent to charge high margins for the branded drug. When the patent fro the drug runs out, a generic drug is usually created by a competing company and released, causing the price to drop markedly. The generic industry was also granted new benefits. The manufacturers no longer need to duplicate expensive research to bring their generic copies to the market when the innovator's patent runs out. In some circumstances, a generic drug can even be marketed before the patent's expiration. Hatch-Waxman was a statute designed for balance, and on the whole, it has performed as intended: both innovator and generic firms in general have prospered and increased their productivity (Crawford, 2005)
Some medication only show to have safety issues after they are marketed, as clinical trials are of limited size, such as the 3,000 test subjects required by the FDA. The over – arching of FDA is to regulate the multitude of medicinal products in a manner that ensures the safety of the American public and the effectiveness of marketed drugs. The FDA’s budget for approving, labeling and monitoring drugs is roughly $290 million per year. “Review Teams” employ around 1,300 employees to approve new drugs. Te “safety team” has 72 employees to determine whether new drugs are unsafe or present risks not disclosed in the product’s labeling. The safety team monitors the effects of more than 3,000 prescription drugs on 200 million people with a budget of about $15 million a year. The FDA requires a four-phased series of clinical trials (synonymous for clinical studies, research protocols, medical research is a research study) with phase three being the largest and usually requiring 1,000 – 3,000 patients. Post – marketing surveillance ensures that are after marketing the safety of a drug is monitored closely. In certain instances, its indication may need to be limited to particular patient groups, and in others the substance is withdrawn from the market completely. Post market studies test a marketed drug in new age groups or patient types. Some studies focus on previously unknown side effects related risk factors. As with all stages of drug development testing, the purpose is to ensure the safety and effectiveness of the marketed drugs.
Pharmaceutical marketing (Wikipedia, 2006) is the business of selling pharmaceuticals or drugs. Physicians control the choice of many drugs through prescription writing. They are considered the vital players in the complex subject of pharmaceutical marketing where in they determine the drugs that will be used by the patients whether patented or the generic drug.
Direct marketing applies that is when pharmaceutical companies sends medical or sales representatives providing medication information and they bring along with them drug samples to be given to the physicians so, in return they would influence their patients. Pharmaceutical companies are developing new innovations or different approach that now centers on influencing the people who influence the physicians. There are several channels by which a physician may be influenced, including self – influence through research, peer influence, direct interaction with pharmaceutical companies, patients and public or private insurance companies. Physicians could get pharmaceutical information through the PDR (Physician’s Desk Reference), which is a commercially published compilation of manufacturers’ prescribing information on prescription drugs, updated manually. Another way would be an online source, Epocrates. Physicians would also rely on pharmaceutical branded e-detailing sites, pharmaceutical sales and non – sales representatives, and scholarly literatures in the form of medical journal article reprints. Peer influence could either be key opinion leaders who influenced physicians through their professional status, including but not limited to prescribing behavior. Pharmaceutical companies generally engage key opinion leaders early in the drug development process to provide advocacy activity and key marketing feedback (Developing Win – Win Key Opinion Leaders, 2003). Physicians also acquire information through informal contacts such as their colleagues. According to the Teredata Magazine, currently, there are approximately 100,000 pharmaceutical sales reps in the United States pursuing some 120,000 pharmaceutical prescribers. As a result, what used to be 15-20 minutes of face time with physicians has been reduced to competing with other reps for one or two minutes of time, according to Sheryl Kingstone, an analyst with The Yankee Group. Because of the large size of the pharmaceutical sales force; organization, management, and measurement of the effectiveness of the sales force are large business challenges.
Management tasks are usually broken down into the areas of physician targeting, sales force size and structure, sales force optimization, call planning, and sales forces effectiveness. The role of the patients in the pharmaceutical marketing is influenced greatly by mass media advertisements for pharmaceuticals. Expenditures on direct-to-consumer (DTC pharmaceutical advertising) have more than quintupled in the last seven years since the FDA changed the guidelines, from $700 million in 1997 to more than $4 billion in 2004 (Wikipedia, 2006). Public and private insurers affect the writing of prescriptions by physicians through formularies that restrict the number and types of drugs that the insurer will cover. In January 2006, the U.S. instituted a new public prescription drug plan through its Medicare program (Huntoon, R. 2004) Known as Medicare Part D, this program engages private insurers to negotiate with pharmaceutical companies for the placement of drugs on tiered formularies.
Conclusion:
The pharmaceutical industry is usually characterized as elite in terms of outsized rewards and excessive profits. Overall global industry growth has slowed to single digit rates: 2004 global dollar volume was $550 billion, a 7 percent increase over 2003—which in turn represented a 9 percent increase over 2002. US sales grew to $235.4 billion, a growth rate of 8.3 percent compared with 11.5 percent growth from 2002 to 2003 (Trombetta, 2005). The U.S. comprises roughly 45% of the pharmaceutical market worldwide, while Europe comprises about 25% (AMR Research). The pharmaceutical industry, intimately linked with healthcare, is feeling healthcare's pains—and some of its own as well (Ebisch, 2005). According to the Teradata Magazine (2005), By 2007, $40 billion in U.S. sales will be lost at the top 10 pharma companies as a result of the slowdown in R&D innovation and the expiry of patents on major products," predict Ian Brodie, executive consultant, and Michelle Palmer, managing consultant, Capgemini. "Taking a broader look across the industry, no fewer than 19 blockbuster drugs are expected to hit patent crisis by 2008. Analysis suggests that 150 mid-sized new compounds will be needed by 2007-2008 in the U.S. alone to plug this gap." This is one of the many reasons why many Americans would suggest for import drugs from other countries where it would be cheap and totally affordable. However, "FDA has found that the importation of prescription drugs from foreign sources is not safe medical practice and our position regarding importation is based on FDA's concern surrounding the strength, quality and purity of these medications," said Thomas J. McGinnis, R.Ph. Director of Pharmacy Affairs in the Office of Policy at FDA. "The 'Looks Can Be Deceiving' campaign is an outreach effort designed to educate people about the potential risks importation poses to their health and our nation's drug supply. As it is the responsibility of FDA to safeguard public health, we must do everything in our power to inform the American people about the proliferation of importing prescription drugs. This is precisely why FDA has partnered with the CPA to launch this campaign in Connecticut." [Cited in PR Newswire, 2004]. Due to this, new savings programs are designed to offset the rising cost of prescription
drugs and other medical supplies that will only increase as the baby boomer
generation begins aging. These programs may reduce prescription drug costs by more, on average, than any imported drug could. Many Americans remain unaware of the benefits available through prescription drug savings programs, which help eligible patients, receive prescription name brand medications at a reduced cost or even for free (Miami Times, 2005). To deal with the 90 percent of health care costs not related to drug prices, experts say that stress the importance on prevention, which can radically reduce costs later on. Prevention can take in many forms: (1) buying the appropriate medicine (2) right dosage (3) right timing and lastly, (4) patient’s compliance. This can, not only help sustain ones health but at the same time, self – reliance is established.
Future innovations are something that keeps an industry booming in spite of strict competition. There are numerous ways of keeping the industry alive. One of which is found in China. Biological Pharmacy might not be new to other western countries but for china, it is some risk worth taking. This particular risk would even help other entrepreneurs of same market strategy boost sales if taken further considerations. The biological pharmacy is a new increasing point for North China Pharmacy Group. There are 2 reasons for North China Pharmacy Group to enter into the biological medicine scope. One is the market reason, that's to say the clinic demand is enlarging. The other is that North China Pharmacy Group has the base and advantage to make biological medicines. In the layout of North China Pharmacy Group, the biological medicines will become an important part in the product frame in future. According to the present rate of progress, the sales sum of the annual biological medicines will reach about 0.15-0.2 billion Yuan in 3-5 years, and the profit will be about 20-30 million Yuan. In 2015 the sales sum and profits will take up 1/3 of North China Pharmacy Group. According to the present operative ability, the sales sum of North China Pharmacy Group will be over 1.5 billion Yuan on the occasion (AsiaInfo Services, 2001). To bridge the barrier between imported drugs to cater the needs of the American society, the Pr Newswire reported, Available online at http://www.ciparx.ca/cipa_pharmacies.html, CIPA's "Safe List" serves as a central referral source. Patients can shop for medications with peace of mind because the list only links to licensed, CIPA- certified Canadian (2004). There must be objectives that should be met in order to keep tract of the pit falls or back logs and therefore, one can make accurate if not better proposition to maneuver or compromise with the current situation. It is always important to have a strategy and a contingency plan while observing the economic boost for these are the underlying trends not just the advancement in the quality of drugs for long-term maintenance conditions.
Consumer attitudes, perceptions and behavior continually evolve and form new trends and countertrends, and these key trends will help one learn on what's affecting the changing moods of the customers right now. What types of perks, benefits that the company can offer the customer? That is why the advent of retail industry came to being. The future of retail pharmacy, in the course of that discussion Bernauer described how Walgreens is taking the lead in modifying the current industry practice on long-term maintenance drug refills, while providing a succinct primer on meaningful financial metrics for investment professionals with little knowledge of the retail pharmacy business (Chain Drug Review, 2004). The program allows patients with 90-day prescriptions to have them filled either through mail order or at a retail pharmacy. Bernauer said that further research is needed to fully analyze the reasons for the retail price performance, but he offered a tentative explanation. When a patient walks into a community pharmacy with a prescription that requires a $50 co-pay, he suggested, the pharmacist, being well acquainted with the generic options available (unlike the physician), is in a position to call the patient's doctor and get approval for a generic substitute with a co-pay of perhaps one-third that of the original prescription.
In particular, this paper will tells us that one must have key strategy divided into individual strategy for short term and long term goals at the same time identifying and evaluating factors that drive strategic choices for each strategy element. In regards to this, one must choose strategic element that best suits the driving factors that will mitigate risk factors.
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