History of the Industry
The pharmaceutical industry is a relatively new industry, the origins of which can be traced to the mid-19th century. Until that time, there was no mass production of drugs; apothecaries relied mainly on natural remedies, which were ineffective in solving the most prevalent health issues of the time. The emergence of the pharmaceutical industry was largely associated with the overall development of science and medicine. The scientific developments related to the creation and application of drugs such as morphine and strychnine has led to the need for mass production of these drugs. This, in turn, caused apothecaries to initiate wholesale production and distribution, abandoning the previous direct sale channels. Similarly, well-established chemical companies also moved into the emerging market of chemical drugs, after researchers discovered an application for their chemicals in medicine and science.
Pharmaceutical firms first emerged in Germany at the end of the 19th century, but soon gained popularity in other areas of the globe, such as England and America. The pharmaceutical industry grew in pace with the growth of medical technology, expanding the range of products available. However, the development of new drugs required a lot of time and effort, making it difficult for individual scientists or small groups to search for new medicine. As the popularity and income of the pharmaceutical industry grew, pharmaceutical firms began forming partnerships with laboratories and research groups in order to expedite the development of new products and the improvement of existing ones. These partnerships continue today, with most pharmaceutical companies owning state-of-the-art laboratories, staffed with highly qualified research groups. Apart from the advancement of medical science, the pharmaceutical industry was also influenced by government regulations. For instance, in some countries, pharmaceutical companies were able to form stable partnerships with the government, thus achieving stability and increasing their market share.
Predict the Future
Despite the significant progress in medical research, the number of health issues faced by people all over the world is still high, which is why it is likely that the pharmaceutical industry will continue to grow in the future. However, as identified in the previous section, there are some serious threats to the industry that the future innovators will have to resolve. In order for the industry to move forward, it is crucial to focus on solving the health issues that are currently perceived by people as the most pressing, such as cancer, obesity, and cardiovascular diseases. In order to promote innovation and ensure further growth of the industry, it is crucial for the industry leaders to respond to the identified threats by:
- establishing partnerships across the industry to achieve a competitive advantage;
- reducing the costs by using efficient technologies and effective HR practices, including talent management;
- increasing the range of products to compete with Little Pharma and generic companies;
- building stronger community connections to appeal to customers (for instance, by holding health education events, fundraisers, etc.);
- reviewing and updating regulatory policies to reflect any external changes.
The innovators in the pharmaceutical industry will most likely arise in Big Pharma companies, as they are under significant pressure to develop new strategies. If companies manage to build strong connections with partners, communities, and the government, they will be able to ensure the future success of the entire industry by solving many of the current challenges, including the increased competitive pressure, changes to the regulations, and more.