Company Strategy Merck Versus Pfizer Essay

PAGES
2
WORDS
697
Cite

Q1.Why has the attractiveness of the pharmaceutical industry declined so much since the 1980’s? What are the implications of those changes in industry structure for firm strategy? Despite the tremendous profits garnered by large pharmaceutical companies for so-called blockbuster drugs, pharmaceutical companies must make huge investments in R&D to produce profitable medications. The vast majority of drugs which are developed and tested never go to market. Additionally, once companies produce valuable drugs, they have a limited window on which to capitalize upon a drug’s profitability before its compounds can be sold in the form of a much cheaper generic. The FDA shortened the patient life of drugs from 11-12 years from 17-20, thus vastly reducing the financial ability of companies to cash in on valuable non-generics (Collis & Smith, 2007, p.5).

The industry structure also changed significantly, as more and more companies began to enter into the fray of developing new drugs. With the expansion of the European Union, approval was facilitated for new drugs across all member nations, thus empowering European companies with the ability to make greater profits (Collis & Smith, 2007, p.6). The developing nations of China and India became more competitive, as China had access to more raw chemical...

...

Greater competition means that companies must price their products more competitively.
One of Porter’s Five Forces is the ability of firms to enter the market. This enabled more international firms to enter the market for developing pharmaceuticals. They had lower costs regarding gaining regulatory approval, cheaper raw materials, and expanded access to the necessary intellectual property to develop new drugs. The power of buyers also increased, as national health services (as existed in the United Kingdom) began to favor less costly drugs like generics or looked less favorably upon newer, more expensive drugs. Similarly, health insurance companies in the United States began to favor less costly alternatives. Particularly in the face of a lack of new drugs that offer a genuinely new approach to treating disease, profit-making became much more limited.

Q2. How do you evaluate Merck and Pfizer’s strategies in the light of changing industry structure?

Merck had historically focused on the development of blockbuster drugs for a variety of diseases. It capitalized upon its high approval rate from the FDA, focusing…

Cite this Document:

"Company Strategy Merck Versus Pfizer" (2018, October 07) Retrieved June 24, 2024, from
https://www.paperdue.com/essay/company-strategy-merck-versus-pfizer-essay-2172956

"Company Strategy Merck Versus Pfizer" 07 October 2018. Web.24 June. 2024. <
https://www.paperdue.com/essay/company-strategy-merck-versus-pfizer-essay-2172956>

"Company Strategy Merck Versus Pfizer", 07 October 2018, Accessed.24 June. 2024,
https://www.paperdue.com/essay/company-strategy-merck-versus-pfizer-essay-2172956

Related Documents

Merck Compensation The author of this report is asked to analyze and summarize the compensation plan of Merck Corporation, how it can be better, what they are doing right and what they are doing wrong. Inclusive in that will be an overall evaluation of their current plan, the beneficial ratio of internally consistent and market-consistent compensation systems, an evaluation of the current pay structure, two overall recommendations that the author of

Pag). Some business will continue as usual, of course: Abbott's nutrition division, based in Columbus, Ohio and employing approximately 2,000 people, announced that the nutrition unit will "fall under the umbrella of a new medical products company that will retain the Abbott name in a split announced Wednesday" (Rouan n.pag). In addition, the announcement has apparently met with international investor approval: "At the news, Abbott's shares went up 7.3% in

Dow Jones Industrial Average (DJIA) has been the most important source available concerning the direction and status of capital markets in the United States for more than a century (Hora & Jalbert, 2009). The DJIA is comprised of the leading publicly traded equity issues which are reported in virtually all major newspapers and news reports in the U.S. as well as other industrialized nations (Hora & Jalbert, 2009). Despite this

Japanese-American Biopharmaceutical Industry in the 21st Century Optimizing Ethical Drug Availability Between These Two Pharmaceutical Superpowers" The Japanese-American biopharmaceutical industry represents an ongoing international effort between the two top pharmaceutical markets in the world. These two economic powers provide consumers with a majority share of all pharmaceuticals produced in the world. However, a number of pharmaceutical products that are currently available to U.S. residents are unavailable to Japanese consumers. From a humanitarian perspective, this

PK = Deltagen Inc. PRXL = Parexel International Corp. Pvt1 = Quintiles Transnational Corp. (privately held) Industry = Biotechnology As of 2005 Source: Yahoo! Finance, April 29, 2007. Figure 1. Financial Performance: Charles River Laboratories vs. Deltagen Inc. And Parexel International Corp. - January 2002 to date. Source: Yahoo! Finance, April 29, 2007. Operating income for 2006 was reported by the company to be $188.2 million compared to $184.7 million for 2005 and its operating margin for 2006

Direct to Consumer Advertising HISTORY OF DRUG ADVERTISING THE DTC ADVERTISING PHENOMENON CREATING DEMAND DECEPTIVE ADVERTISING - A WOLF IN SHEEP'S CLOTHING CAUSE OF DEATH PROFIT UTILIZATION, PRICING, AND DEMOGRAPHICS LEGISLATION, POLITICS AND PATENTS LEGISLATIVE INITIATIVES REGARDING DTC RECALLED and/or DEADLY DRUGS In order to provide the most efficient method of evaluation, the study will utilize existing stores of qualitative and quantitative data from reliable sources, such as U.S. Government statistical references, University studies, and the studies and publications of non-profit