Competition in Pharmaceuticals

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For the threat of substitute products, it is still very low due to the patents protection but in case of the expired patents, it is medium. A pharmaceutical company has lots of way to fight back against generic drugs such as obtaining patents on component chemicals, manufacturing methods, product extension/formula modifications or improving drug-delivery methods. Rivalry among existing firms is medium. Each pharmaceutical company has to fight in order to take an advantage of the first one who obtains patents. Moreover they are competing to bring their drugs to doctors' mind by hiring reps.

There are several alternatives to make a company less venerable. For the bargaining power of customers, in US, the MCOs are becoming stronger and stronger while the battle in prices against the purchaser outside the US is not decreasing so pharmaceutical companies cannot avoid reducing the prices of drugs. A pharmaceutical company can move its R&D centers to...

Strengths

1. Low cost of production.

2. Large pool of installed capacities

3. Efficient technologies for large number of Generics.

4. Large pool of skilled technical manpower.

5. Increasing liberalization of government policies.

Opportunities

1. Aging of the world population.

2. Growing incomes.

3. Growing attention for health.

4. New diagnoses and new social diseases.

5. Spreading prophylactic approaches.

6. Saturation point of market is far away.

7. New therapy approaches.

8. New delivery systems.

9. Spreading attitude for soft medication (OTC drugs).

10. Spreading use of Generic Drugs.

11. Globalization

12. Easier international trading.

13. New markets are opening.

Weakness

1. Fragmentation of installed capacities.

2. Low technology level of Capital Goods of this section.

3. Non-availability of major intermediaries for bulk drugs.

4. Lack of experience to exploit efficiently the new patent regime.

5. Very low key R&D.

6. Low share of India in World Pharmaceutical Production (1.2% of world production but having 16.1% of world''s population).

7. Very low level of Biotechnology in India and also for New Drug Discovery Systems.

8. Lack of experience in International Trade.

9. Low level of strategic planning for future and also for technology forecasting.

Threats

1. Containment of rising health-care cost.

2. High Cost of discovering new products and fewer discoveries.

3. Stricter registration procedures.

4. High entry cost in newer markets.

5. High cost of sales and marketing.

6. Competition, particularly from generic products.

7. More potential new drugs and more efficient therapies.

8. Switching over form process patent to product patent.

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