Introduction
Pharmaceutical industry has been on the upward over the recent years. This attributes to the growing demand of pharmaceutical products because of changing lifestyles experienced in the modern life. Pharmaceutical industry has a responsibility of developing, producing and marketing of drugs licensed for medication purposes.
It is the only body allowed in dealing with drugs having met the set conditions, which vary from country to country. This research paper will analyze the pharmaceutical industry based on its market size, research and development as well as regulation governing entry of new drug in the market.
Market size and major players
Global pharmaceutical market has been reporting an upward trend, which projects to continue over the coming years. Many researches done so far projects that the global pharmaceutical market will produce a total of more than a trillion dollars in its revenue for the year 2012. This is because of the changes that the pharmaceutical industry is undergoing leading to more growth than before.
Some of the current changes in the pharmaceutical markets include the shifting growth from the developed markets, increased focus on biotech developed drugs and approval of new drugs (PRLOG, 2012). Some of the leading players who take nearly half of products in the market are Pfizer, Novartis, Bayer, GlaxoSmithKline, Sanofi among others.
The pharmaceutical expenditures are on the upward trend due to the pharmaceutical consumption experienced all over the world. The total number of pharmaceutical bills by 2007 was estimated to be USD 650 billion among the OECD countries accounting to 15 percent of the health spending.
United States is the leading country in pharmaceutical expenditures per capita of $7,960 followed by Norway and Switzerland. Other leading countries include Netherlands, Luxembourg, Canada, Denmark and Austria respectively (OECD, 2012).
Globalization plays an important role in the pharmaceuticals markets, which is worth mentioning. The states of the third world countries have improved because of globalization from direct participation worldwide. Globalization eases the integration of different countries in forming umbrella bodies with no trade barriers.
This has necessitated the free movement of pharmaceutical products worldwide. It has created global competition among leading brands in the pharmaceutical industry due to movements and marketing by companies. It has enabled the pharmaceutical companies in the long-term planning as they look for business opportunities in some parts of the globe (Kesic, 2009).
Research and development
Research plays an important role of innovating new products, which meets the market demand. As world’s population grows day by day, so does the need for more innovations in solving the emerging problems. Frequent research and developments leads to new products in the market to be used in treating different illness experienced in daily life.
There are a number of agencies which funds research and developments. In some cases, American federal meets the cost of research and developments of drugs in collaboration with the public sector. Over the past years, the federal has laid out policy research, which they have funded to a tune of billions through private and public sectors in US (Austin, 2007).
Similarly, pharmaceutical companies do meet the cost of research and development, which is latter, passed to consumers through buying the products. The global competition and increased need of resistance drugs are pushing private and pharmaceutical companies to research and develop drugs that meets the need of the public.
Meeting the market demand with new products is very important for pharmaceutical company’s research and developments (Swayne, Duncan & Ginter, 2008). Every company is striving in satisfying its clients and developing brand loyalty with them.
This makes pharmaceutical companies thrive continuously in producing and innovating new products, which meets the expectation of their customers. Developing strong brands is more important to pharmaceutical companies as it enables them to achieve a competitive advantage.
Regulation
Food and Drug Administration (FDA) has the mandate of protecting and promoting health of the public through ensuring their safety. It plays a role in approving drugs, which takes two phases namely: clinical trials (CT) and new drug application (NDA).
The drug approval process by FDA begins after the client has submitted investigational new drug application(IND) showing preclinical information, which justifies the testing of the drug to humans. In many cases, US subjects 85 % of applications to clinical trials. This ensures safety of the drugs before allowing them into the market (Guarino, 2009).
The next stage in the approval process involves phase I of clinical trials, which takes 1-3 years on subjects involving human beings. There is evaluation of safety of the drug and its pharmaceutical contents are at this stage. Phase II trials take two years and only done when a drug successfully passes the first phase.
This phase includes evaluation of dosage, broadness of the efficacy and there might be additional safety procedures performed at this phase. If the examination becomes successful at this stage, it proceeds to the third phase, which takes 3-4 years (Guarino, 2009).
Phase III is concerned with effectiveness and safety of the developed drug. It takes data from different populations and dosage of up to 3000 people in checking its effectiveness. Successful passing these three stages allows for new drug application (NDA). Some of the information considered includes drug manufacturing and its labeling, data analysis and pharmacokinetics of the drug.
A team of Scientist in the Centre of Drug Evaluation and Research also takes clinical and preclinical reports and any analysis in masking it conforms to the laid down procedures of safety measurement.
The approval of NDA may take up-to two years, but the company is allowed to market the drug after successful passage and approval of NDA before proceeding to phase IV. Phase IV involves exploration of new population as well as the drugs long-term effects and the response of the participants to the dosage (Guarino, 2009).
Conclusion
Pharmaceutical industries are involved in research and development because of increased demand for their products. Globalization has played a critical role in marketing their products because they can easily reach other parts of the world without difficulties.
Despite the increased demand, which has necessitated more production, the major players are incurring the high cost in relation to research and development of new products. The cost for developing new drugs is passed to the consumer who pays higher in buying the drugs. This concept explains why United States is leading consumers of pharmaceutical products.
References
Austin, T. (2007). Research and development in the pharmaceutical industry, BO study. Washington DC: Government Printing Press.
Guarino, R. (2009). New Drug Approval Process. 5th ed. London: Taylor &Francis
Kesic, D. (2011). Pharmaceutical industry in strategic development. 2 (6), 29-37. Web.
OECD (2009). Health at Glance 2009 OECD indicators: OECD indicators. Canada: OECD Publishing.
PRLOG (2012). Global Pharmaceutical market forecast to 2012. Web.
Swayne, L, Duncan, W & Ginter P. (2008). Strategic management of health care organizations. 6th ed. West Sussex: John Wiley.