Pharmacutical Industry What Do You Think the Term Paper

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Pharmacutical Industry

What do you think the pharmaceutical Industry will look like in 10 years? Why?

What do you think the pharmaceutical industry will look like in ten years? Why?

Despite the sharp upturn in profits over the past twenty years for the pharmaceutical industry, there is grave concern amongst industry insiders that this cannot continue indefinitely. "Increasing price and cost pressure, regulatory changes and expiring patents are leading to shrinking margins in the pharmaceutical industry. Almost three in four companies believe their industry is in a strategic crisis" (Berger 2013). This is despite the fact that "the top 10 pharmaceutical companies were able to increase sales by about 13% between 2009 and 2010" (Berger 2013). Concerns abound that the failure to create a new 'hot' drug will create substantial downward price pressure. "R&D costs have risen by more than 80% worldwide over the past 10 years. On the other hand, the number of new product launches has dropped by 43%. Therefore, almost half of the companies surveyed believe that the Return on Investment (ROI) in the area of R&D is more or less negative" (Berger 2013).

One potential area of growth is the developing world: emerging markets are expected to increase in size about 12%. By 2016, especially in China, Brazil, India and Russia, "emerging markets will account for nearly 40% of the global market for pharma solutions by 2016 (Berger 2013). However, this cannot abate concerns about the rash of drugs that are facing what is known as the 'patent cliff' -- "40 brand-name drugs -- valued at $35 billion in annual sales -- lost their patent protection, meaning that generic companies were permitted to make their own lower-priced versions of well-known drugs like Plavix, Lexapro and Seroquel -- and share in the profits that had exclusively belonged to the brands" (Thomas 2012).

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Not only are these drugs more attractive to consumers because of their low cost -- in many instances, insurance companies will not pay for non-generic drugs if the cheaper generic version is considered to be pharmaceutically equivalent to the non-generic. Pharmaceutical companies will suffer a profound financial blow if they cannot create new non-generic drugs that are equally demand as these former warhorses that drew in such revenue to their coffers.

However, there are some 'hopeful' signs, not necessarily hopeful in terms of what they suggest for human health, but hopeful in the sense that they are likely to be sources of profit for pharmaceutical companies within the next coming decades. The rise in obesity and chronic conditions associated with obesity such as type II diabetes is also expected to be a major growth area for 'big pharma.' Today, the worldwide estimate of persons with diabetes is 177 million, according to the World Health Organization, with an expected increase to 300 million by 2025 (Diabetes, 2013, WHO). "The oral diabetes market could be worth more than $18 billion by 2020" (Carroll 2013). There is particular interest in growing the market for diabetes drugs administered by mouth (versus injection such as insulin) and treatments for early stage or pre-diabetes (Carroll 2013).

In terms of the most lucrative products for diabetes: "insulin, test strips, glucose….....

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