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THE GLOBAL PHARMACEUTICAL INDUSTRY

STRATEGIC MANAGEMENT

Irina RaynaudPierre Jean Tessier

Nicolas CabritClément Tumoine

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PESTELPolitical

- Government are powerful purchasers- Government price control- Different coverage and reimbursement systems between countries

Sociocultural- Average life expectancy increased by over 20 years- Consumers are well informed thanks the to the easier information access (internet)- Social coverage are different in many countries- No-profit basis operation in order to help undeveloped countries

Economic- 1960’ s pharmaceutical industry prospered (light regulatory control)- 80% of the market is owned by 5 countries (USA, Japan, EU, China and Mexico)- Blockbuster power- China and India = attractive countries for global manufacturing and RD investments- Sales and Marketing important part in competitive advantage- 1990’s economic recession

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Technological

- R&D is more efficient => importance of the innovation- New type of industry based on new projects: biotechnology- Speed of technologic transfer in developing countries

Legal

- Tighter regulatory control since thalidomide issue- Legislation set a fixed period on patent protection : 20 years from initial filling- Creation of institutions in order to regulate the international regulation harmonization (EMEA in Europe, International Conference Harmonization in USA, Food and Drug Administration)- Medicare reform in 2006 (drug coverage for elderly people) - Legislation proposition about allowing generic imports and branded drugs in South Africa

Environmental

- Biopharmaceutical takes a more important place and become mainstream( many companies invest in this new sector)

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Key drivers : - R&D

- Sales and Marketing

- Arrival of new pharmaceutical sectors: generics, biotechnologies, OTC medicines (force companies to invest and innovate)

- Blockbusters

Major trends: - Conglomerate companies (mergers and acquisitions)

- Pharmaceutical companies manage to be both creative and efficient (by increasing R&D power)

- The latest trend : invest in biopharmaceutical area