The Global Pharmaceutical Industry Essay Example | Topics and Well Written Essays - 750 words

The Global Pharmaceutical Industry - Essay Example Using PEST-L analysis to prepare for strategic plans in taking advantage of opportnities in the external environment and addressing eminent threats, 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.. Buyer power, 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. As disclosed from the case, ageing population significantly affect the stragies designed since consumers from this age range more frequently buy drugs than those from the younger age ranges. Therefore, aside from considering the prices of this drugs to ensure that they could be afforded by the older generation, strategies would also consider the media by which products are advertised and promoted; the availability of substitutes, as emphasized in Porter’s threat of substitutes; and the manner by which these products are distributed and made available to the consumers. Political factors could be closely evaluated using the PEST-L analysis where laws and regulations impact on the industry’s operations and performance; as well as in the development of strategies. As the industry was characterized to be â€Å"subjected to rigorous regulatory scrutiny† (Holland, 2010, p. 548), the length required for clinical trials to ensure safety and security of consumers are considerably long. Further, the patent protection of 20 years also influence strategies of manufacturers of pharmaceutical drugs since upon expiry, the threat of entry from generic drug manufacturers rise and significantly affect the level of sustained demand and consumer purchase. Legal factors encompass laws in terms of government controls on pricing and the extensive efforts taken into consideration from discovery and clinical trials to approval and final marketing. The imposition of parallel trade strategies in response to price control have influenced the global pharmaceutic al industry in terms of protecting not only drug manufacturers but moreso the consumers who get to evaluate significant price differentials as drugs could be sourced from other low priced markets. The implication for this is that international health organizations, like the World Health Organization, must monitor and address pricing strategies of global pharmaceutical companies to ensure uniform standards and benefits are accorded on a universal perspective. In an article written by Shah (2010), the author clearly cited Stiglitz work which