The pharmaceutical industry makes, discovers, develops, and commercializes pharmaceuticals or medical drugs for the purpose to heal them, treat them, improve them, or relieve their symptoms. Pharmaceutical firms can produce or commercialize generic drugs and medical products and devices. These generic and commercialized drugs are generally produced from chemical compounds derived from various minerals, plants, microorganisms, animals, and hormones. Most of the drugs are synthetic and many of them have side effects. This results in the search for new remedies for diseases. A new remedy must be found that can offer a cure for the disease, relief from the pain, without causing any secondary or new symptoms.
The pharmaceutical companies have developed numerous products for over hundreds of years. Some of these have been successful while others have not. As a result of the many failed products, the American Medical Association has held a meeting to discuss the status of pharmaceutical research and development. At this meeting, the companies were asked to develop clinical trials on effective treatments. The results of these trials are reported to the American Medical Association by pharmaceutical companies, through a report called Pharmaceutical Research Update.
The pharmaceutical industry has several distribution channels through which it manufactures and distributes its medicines. These distribution channels include sales to retail shops, pharmacies, hospitals, corporate entities, government agencies, and others. Distribution methods and quantities vary according to the needs of the market. Some medicines are large and need to be distributed by distributors in bulk, while small and medium-scale retail shops can utilize small quantities of medicines in their daily operations. The pharmaceutical industry has developed supply chains that enable it to meet all of the requirements of its customers.
Price increases by companies have often forced drug pricing authorities to re-examine the costs of producing the drugs. The introduction of lower quality and generic forms of the same drug has resulted in some companies reducing the amount they charge for the medicine. However, the increase in supply of generic forms of the same drug can lead to an upward revision of the cost of production of the drug by the pharmaceutical manufacturing company. This results in a reduction of profits of the company. It is for this reason that drug pricing authorities often request drug manufacturers to develop and produce drugs under limited quantities or to restrict the quantities that they will produce.
Beyond-the-pill businesses are generally seen as an external threat to established drug manufacturing companies. These businesses bring the benefits of increased demand, improved supplies, greater access to generic forms of the same drug, and an opportunity for new markets to emerge. Many experts believe that Pharma companies should be encouraged to focus on research and development of new pharmaceutical products in other areas, rather than concentrating on developing drugs for medical purposes. Some of these challenges include access to resources that are not currently available in the industry, the creation of new consumer markets, and the introduction of standards that must be followed by all pharmaceutical manufacturing companies. As long as these concerns are addressed, the opportunity for pharmaceutical products to serve markets outside the traditional medical setting will remain.
The changes in the pharmaceutical industry have led to some questions about the value of Pharma strategies. The value of Pharma strategy for a pharmaceutical company largely depends on whether the strategy is designed to build equity in an already-established niche or to build a market in a relatively new area. Strategies should be evaluated over the long term to determine their success and whether the company will be able to sustain its gains as the industry continues to evolve. Successful strategies will focus on the expansion of markets, the production of more efficient drugs, and the development of new pharmaceutical products that provide solutions to pressing health problems. In recent years, biotechnology has been a key force driving the pharmaceutical industry. As well-known biotechnological drug companies continue to grow in size and develop more ground-breaking medicines, there will be increasing pressure for pharmaceuticals to incorporate these approaches into their strategies.