Business Strategy in Pharmaceutical Industry

Outlook in the policy environment of 2015

Belkis Karakas

STRATEGY
While there are the challenges of pricing and new regulations in the policy environment of 2015, this environment also presents new opportunities.
To exploit these opportunities, the pharmaceutical industry needs to focus more on chronic care, preventive drugs, and healthy living promotions.
The industry also needs to go to significant cost cutting measures in all areas of the business including R&D. As a contingency to a more drastic health reform change, the business needs to expand more globally to take advantage of the high populations in other countries such as China, India, and other emerging countries resulting in increases in volume of sales.

SWOT Pharmaceutical Industry in the 2015 Policy Environment

STRENGTHS

The Pharmaceutical Industry remains to be profitable even with price pressures from government paid programs in the United States and in other countries due to the value of the human life and to the global nature of our business The Pharmaceutical Industry continues to invest in innovation for new products due to the income from increase in population in other countries and due to increase in the insured population in the US The Industry has strong political lobbying presence in Washington D.C and may be able to influence to some extent the future of healthcare policies and potential reform

SWOT Pharmaceutical Industry in the 2015 Policy Environment

WEAKNESSES

As the governments play a bigger role in increasing the insured population, the resulting pressures to drop our products prices may hinder the Pharmaceutical Industrys ability to spend adequately on innovation
The Pharmaceutical Industry historically has been less adaptive to quick changes in technology and policies. Additional pressures to comply with new legislation in short periods of time may increase operation costs for adoption and compliance.
Reduce Companys operating, administrative, supply chain, quality, manufacturing costs by applying efficiencies through lean six sigma programs Reduce labor costs by going global in production and in research Partner with other companies and universities for research
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SWOT Pharmaceutical Industry in the 2015 Apply market research to attract this group of individuals Policy Environment
OPPORTUNITIES

who may not have had insurance for many years and may have conditions that require our products in the short term Apply direct to consumer marketing for this group of individuals to attract them to our products

Increased number of the insured in the US

An older population in the US as the baby boomers age and retire Government policies result in the following:
Pressures to have products and services covering chronic care more efficiently Pressures to have products that focus more on prevention
Apply/purchase research and development in the areas of Promotions to encouragechronic individual that leads to healthy lifestyles carebehavior and healthier living such as the Nutritional business Apply/purchase research and records development in the areas of Mandates to implement and fund electronic medical preventive care such as preventive medicine, diagnostics, genetic testing and counseling Through lobbying and even funding programs, actively participate in defining EMR and ensure access to data for market and outcomes research (B2B Opportunities)
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SWOT Pharmaceutical Industry in the 2015 Policy Environment

THREATS

Increase presence and sales in other countries to be less dependent on one economy or one political environment

Political instability in the global environment due to wars such as Iraq, and tensions caused by countries holding nuclear programs.
Weakening US Economy resulting in less spending by individuals Apply cost cutting as well as by the government measures

Increased taxes on corporations reduce profits

Increased taxes on individuals reduce spending Parallel trade due to lower costs in other countries
Leverage incentives on healthy living to promote products related to chronic care, prevention, and nutritionals.

Apply controlled supply chain and transportation channels

SWOT Pharmaceutical Industry in the 2015 Policy Environment

THREATS Continued

Government policies result in the following:

Utilize volume to increase profits by selling more through marketing and placement on tier one formularies Apply cost cutting measures

Power in price negotiations due to volume resulting in more pressure to cut prices Keep the same line of drug in Faster introduction of generics into the market
research to introduce the next generation of the drug to retain existing patients especially in chronic and preventive care

Healthcare spending decreases due to the new measures to reduce costs such as potential introduction of physician budgets
Changes in reimbursement policies such as life enhancing drugs
Apply direct to consumer marketing for life enhancing products Partner with pharmacies to provide financing of life enhancing drugs when not reimbursable
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