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The Global Pharmaceutical Industry

The Global Pharmaceutical Industry . Sabena Ahmad Iveta Smincakova Dawn Bradbury. PESTEL Analysis. Political: Lighter Regulatory Controls (1960s) Tighter Regulatory Controls on Clinical trials (1970s) Medicare reforms in 2006 extended drug coverage for ageing population Economic:

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The Global Pharmaceutical Industry

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  1. The Global Pharmaceutical Industry Sabena Ahmad IvetaSmincakova Dawn Bradbury

  2. PESTEL Analysis Political: • Lighter Regulatory Controls (1960s) • Tighter Regulatory Controls on Clinical trials (1970s) • Medicare reforms in 2006 extended drug coverage for ageing population Economic: • Monopsony of the government on drug purchases • Parallel trade (free movement of goods across Single European Market) • USA contribution to global pharmaceutical sales fell from 60 to 40% in years 2002 to 2005 • Emerging markets (Latin America, Asian countries e.g. India and China) represented niche markets for pharmaceutical companies • Mergers and Acquisitions – Warner-Lambert (USA) & Pfizer (USA) Social: • Increase in consumer expectations • Ageing populations (four times higher consumption of health care) • Increase in numbers of uninsured people (in USA 46.6m people in 2006) • The DTC advertising (the aim is to inform consumers about latest drugs available in the market, to support branding – the expenditure for DTC advertising exceeded $4.5bn in 2006)

  3. PESTEL Analysis Technological: • Usage of high technology for R&D • Five types of industries – Ethical, Generic, Biotech, OTC and Vaccine • Introduction of the ‘blockbusters’ (sales reached $2bn between 1998 and 2003) Legal: • Legislation Setting Fixed Period On Patent Protection (20 years) • Government agency ensuring safety & effectiveness of the new drugs (Food and Drug Administration-FDA, National Institute for Clinical Excellence-NICE) • Issues of fake drugs (the drug market is estimated over 10% globally) Environmental: • There is no information on this factor in the case study

  4. Key Drivers of Change • Technology • Innovation • Branding (marketing and advertising) • Ethical issues • Globalisation of the market • Emerging markets • Ageing population • Regulatory law

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