The Global Pharmaceutical Industry

Case Analysis

This case by Sarah Holland and Bernardo Bátiz-Lazostudies studies the evolution of the ethical pharmaceutical industry and analyses the various forces affecting the discovery, development, production, distribution and marketing of prescription drugs. The authors further analyses the critical issues of corporate social responsibility in the industry and the strategies being followed by major pharmaceutical companies and the challenges and opportunities for the future.

This case bases its research to find evidence to support or disprove findings of a report published in the Gardiner by analysts at the investment bank of Dresdner Kleinwort Wasserstein which claimed that the world's major drugs companies are operating a business model that is unsustainable and rapidly running out of steam. On the surface however, the pharmaceuticals business seems like the epitome of a modern, mature industry that has found a comfortable way to make profits by the billion.

According to the case large pharmaceuticals companies are currently facing the most challenging times since a decade. Even though the industry has made tremendous contributions to human well-being, its roles and actions are still criticized by the media and under constant scrutiny by national governments in their efforts to reduce expenditure in healthcare. Stringent laws and regulations have come in action which has made product approval, pricing and promotions costlier and more time- consuming. This has led to increasing research and development costs and decreasing product life cycle. On the other hand, more educated consumers, advances in genomics and unmet medical needs in emerging markets offer opportunities for these billion dollar global industry.

As key economies stagnated in 2002, challenges in funding healthcare advances remained. Ageing