Pharmaceutical Industry Analysis

Topics: Pharmacology, Pharmaceutical industry, Pharmaceutical marketing Pages: 6 (2127 words) Published: November 20, 2013
Most people living in the developed world have entered a pharmacy or purchased medication at some point in their lives. Today the pharmaceutical industry is one of the biggest industries in the United States. The industry experienced a rapid growth rate (in the double digits) in the late 20th century which has now dropped into the single digits (Mullins, 2007). The global demand is driven by factors such as a worldwide increase in elderly population and a rising quality of life in developing nations. Time Magazine listed Generic Pharmaceutical Manufacturing as one of the top ten fastest growing industries in the United States for 2012. (Mathews, 2012) Due to the inherently volatile nature of the industry, it is necessary for companies to constantly adapt through the constant development of effective strategy. Today pharmaceutical companies must not only address finances, but social, legal, and environmental issues as well. In this paper the top ten issues companies face in pharmaceuticals are discussed. They are addressed in an order of descending importance as follows; legal issues, environmental issues, and social issues. When ordering these categories I put myself in the mindset of a potential company investor. Investors are vital to a company’s survival and a potential stockholder is primarily interested in the finances of the company, and its future prospects. Therefore legal action takes precedence above other issues. Legal:

Legal issues are most important because a violation of law oftentimes harms a company the most financially. The top 20 pharmaceutical legal cases in history account for over 16 billion dollars in recovery. (Breggin, 2012) The violation of legal requirements is more common and typically results in much graver consequences than an environmental or social wrong. There are a plethora of areas in which a pharmaceutical company could inadvertently break the law. The top issues a company could encounter include the filing of false claims, the provision of marketing bias to health professionals, drug lobbying, and illegal marketing of antipsychotic drugs. This is just the tip of the iceberg when it comes to legal problems pharmaceutical companies may encounter by either chance or design. Within the pharmaceutical industry legal issues involving the filing of false claims are the most common. Over 2.5 billion dollars were recovered in 2010 under the False Claims Act (Breggin, 2012). False claims are filed when a pharmaceutical company charges an insurance company for drugs the patient never received. This practice can save a company thousands of dollars, and can be an easy crime to inadvertently commit if procedures are not strictly followed. However, evading the law ultimately costs companies more money than they save if they are caught. It is important for companies to be aware of this law, so they can avoid the consequences of breaking it. Drug marketing and lobbying have also become popular in the past decades. I addressed them simultaneously because they are directly linked and legal cases oftentimes address them together. Recently, there has been some controversy over the legality of both practices. Pharmaceutical representatives attempt to convince doctors and health representatives of the superiority of their product. However, it is easy to present with bias and present illegitimate information unjustly favoring their product. It is understandable for a company to want to effectively market their product, but inexcusable to attempt to sway medical professionals for monetary gain. A successful company will be aware of the danger of bias, and steer clear of it. Antipsychotic drugs are currently the top-selling prescription medication in the United States of America. The demand for them seems to be ever increasing and with the increase in demand has come an increase in health care fraud. For this reason, nearly every pharmaceutical company offers antipsychotics. In the past giants such as Eli...

References: Berry, M. (2000). Environmental management in the pharmaceutical industry: Integrating global
corporate social responsibility. John Wiley and Sons Inc, Retrieved from http://www.kantakji.com/fiqh/files/companies/w144.pdf
Breggin, P. (2012, July 07). $3 billion in Fines for Illegal Marketing of Paxil, Wellbutrin and Other
Drugs.Huffington Post
Mathews, C. (2012, April 17). Top ten fastest growing industries in America. Time Business. Retrieved
from http://business.time.com/2012/04/19/the-top-ten-fastest-growing-industries-in-america/
Mullins, J. (2007, August). A Recent History of the Pharmaceutical Industry: All five forces. Retrieved from http://www.venturenavigator.co.uk/content/154
Shah, A
Silverstein, K. (1999) Millions for Viagra, Pennies for the Poor. Harper’s Magazine. Retrieved from http://www.thenation.com/article/millions-viagra-pennies-diseases-poor
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