Problems Facing the Pharmaceutical Industry and Approaches to Ensure Long Term Viability

This paper examines the Pharmaceutical (Pharma) industry and the changes that have occurred particularly over the last 10 years as a result of the overall economic downturn, the rising cost of healthcare and the costs associated with the development and sales of pharmaceuticals. One response of big Pharma to this has been the recent spate of partnerships, mergers and acquisitions, consolidation, diversification, licensing agreements and downsizing in both human and capital resources. Four major challenges facing the complex Pharma industry are highlighted and discussed. These include the decline in the discovery, approval and marketing of new chemical entities (NCE) with fewer and fewer blockbuster drugs making it to the market, competition from generics drugs, regulatory pressures and the weak growth in the US market (the largest market) and therefore the need to explore other markets to name a few. In addition to the research driven aspect of the paper, a summary of the interviews conducted with executives and other industry practitioners (to get their personal views) is presented. Finally referencing some of the strategies adapted by some companies, this thesis identifies Organizational Dynamics areas of concentration and the role they can play within companies in their plans to ensure long term viability. The analysis focuses on the commercial aspects of the industry and offers some steps that will be useful in changing the current business model and setting the stage for future success