The article of Peter Loftus and Elena Berton entitled “Drug Makers Tighten Their Belts Again; Astra-Zeneca Expands Job-Reduction Plan; Bristol-Myers Sets Cuts” announced that the big pharmaceutical companies are experiencing difficult times this year because it is facing stiff competition against generic drug makers and the actual revenues they expected on new drugs fell short of what they expected. For instance, Astra Zeneca is bound to lay off 7,600 of its employees because the company is experienced an 11 percent profit drop triggered by its restructuring and development expenses. On the other hand, although Bristol-Myers gained 5.8 percent in its profits that marked a visible increase in its yearly earnings forecast, the company defended that the cost cuts are still needed for them to expand their profit margins. It is said that this New York-based pharmaceutical giant would like to “bounce back” to recover from a series of setbacks. This includes the losses they incurred with the best-selling heart ailment medicine Plavix, “which it co-markets with France’s Sanofi- Aventis SA” because some of their customers shifted into using other generic drugs. For instance, a Canadian company named Apotex Inc. became their stiffest competitor as they sold generic copies of Plavix last year, despite an ongoing patent dispute with Bristol-Myers and Sanofi. Later on, Bristol and Sanofi ultimately won the patent for Plavix as they gained the sole authority to serve the U.S. market with this drug exclusively until 2011.
In my opinion, big pharmaceutical companies are selling drugs that are too expensive for every person to afford. This is the reason why more and more consumers are shifting to generic drugs because they are a lot cheaper than what Bristol-Myers or Astra Zeneca offer at their price. With lesser demand for the branded medicines, Astra Zeneca and Bristol-Myers are suffering a slump in their sales. This is why they are trying to capture their lost customers by demanding a dispute over their drug’s patents. They want the sole control of the market for the drugs they had spent years of research and study. However, this arrangement is denying the consumers the affordable medicines they deserve. In this news article, I realized that it is only right that generic drugs should be made available to all people. Bigger pharmaceutical companies should not steal the chance of their market to be able to choose what medicines they would like to purchase.
On the contrary, the author’s views are not very obvious in the whole article because they were trying to be objective in delivering the news item. However, we could see that they are saddened by the fact that the big pharmaceutical companies are “tightening their belts” because many of their employees will be out of jobs because of the severe losses these companies experienced against generic competitors. The article is full of statistics that showed the drops in sales of the big pharmaceutical companies. This is a good indication that they have access to the vital information that helped them to convince their readers about what they’re writing about. Overall, this article is still objective in reporting the news without the hint of what sentiment they are siding with.
In this article, the economic terms being used are very simple. It is the law of supply and demand. The lowered demand for the drugs of Bristol-Myers and Astra Zeneca was caused by the upsurge of sales from their competitors who are selling generic drugs. In this case, the lowered demand had triggered the oversupply of their drugs that translated to more losses on their part. This is why these companies are disputing their generic counterparts to stop them from selling similar drugs that customers see as a cheaper alternative. When they finally won the case, they are now holding the sole market demand for this certain drug. Thus, they are now expecting their profits to grow in the coming years because they have now monopolized the market for this drug. In the final analysis, it is still the consumers in the losing end because they will have lesser choices on the type of medicines they will buy. They will be stuck with the more expensive brand because they have to buy it unless they want to suffer or die from their diseases. This is the sad reality of a capitalist market, and the government should do something to provide people with cheaper medicines because these are necessities to preserve the lives of their people.
Works Cited
Loftus, Peter and Berton, Elena. “Drug Makers Tighten Their Belts Again; Astra Zeneca Expands Job-Reduction Plan; Bristol-Myers Sets Cuts”. Wall Street Journal (2007): A6. WSJ Online. Web.