One of the market domains within the healthcare industry is the pharmaceutical sector. This domain features the companies which specialize in the research, development, manufacturing, and the distribution of medicines. Whenever new drugs are identified and produces, the global health becomes impacted positively. Hence, it also impacts the prosperity and productivity of individuals which is why the economy also flourishes as a result. The advances in already available medicines benefit the society in the sense that the illnesses that were previously incurable can now be treated effectively. In addition, other life threatening conditions can now be controlled more easily. Therefore, drug therapy has now gained attention in health care as it is considered to be an essential factor that will soon revolutionize the treatment of various diseases. This paper features an analysis of the background information of this market domain. It will consider both the historical and current information.
The U.S. pharmaceutical sector is one of the most competitive sectors that is highly depended on around the globe. It is large and offers diversified products to markets across the globe. Statistics from the Pharmaceutical Research and Manufacturers Association (PhRMA) indicate that over 810,000 individuals are hired to work in the biopharmaceutical industry within the U.S (International Trade Administration, 2016). This shows that this market domain supports a large number of jobs. For instance, in 2014, over 3.4 million job positions were being supported by the pharmaceutical sector (International Trade Administration, 2016). This resulted in a contribution of approximately $790 billion to the economy (International Trade Administration, 2016). Therefore, this domain is one of many opportunities as it is considered an important source of the well-paying jobs.
Of all the industries in the United States, the pharmaceutical sector has been the one with consistent research and development. This is because this sector is research-based. Approximately 15 to 20 percent of the revenues earned in the sector are invested in R&D activities. Once again, the U.S. leads in the investment in innovative R&D as it produces most of the new molecules which are used to improve drugs and create new ones too. Unfortunately, this country has experienced increased costs of R&D as emerging economies, such as China and Asia have introduced policies to trigger investments in their own lands (Malerba & Orsenigo, 2015). As such, the factors which minimized competition for the U.S, including talent availability and proximity to the market are slowly losing meaning.
A strength for the U.S. pharmaceutical sector is the support it receives from the domestic environments which encourage development as well as the commercialization of products without many barriers. It features a research base that is also supported by academic institutions as well as the government research funding. In addition to these, the laws within the U.S are not as restrictive as those of other countries. For instance, it allows for the direct-to-customer advertising which triggers a high demand for the patent drugs (Rahalkar, 2012). For most start up enterprises, the U.S. is usually a more viable option due to the many benefits it has to offer.
Most of the pharmaceuticals purchased in the U.S. are manufactured locally. However, there are other imports, such as biologics, which are obtained from Western European countries. Since the U.S. is the largest drug manufacturer, its imports are very minimal and account for about a quarter of the value. In 2015, the largest export markets featured Canada, Belgium and the U.K among others. To predict the future of this sector, the more the use of low cost raw materials, the higher the risk of inhibiting the export potential of the country (Malerba & Orsenigo, 2015). Also, the more the need for high value products for exports, the more the negative pressure on value becomes. Fortunately for the U.S., its high levels of R&D and increased market penetration will always ensure that it has something new to export (Haruya & Kano, 2015).
The state of the U.S. pharmaceutical sector does not reflect the nature of the sector globally. Here, ingredients are obtained and manufactured basing on the cost and quality. The global market is expected to expand from $1 trillion in 2015 to $1.3 trillion in 2020 (International Trade Administration, 2016). This shows that the annual growth rate of the sector is approximately 4.9%. Demographic and economic trends of the world are slowly impacting the consumption of pharmaceutical products. For instance, the aging population is expected to increase drastically in the coming years. This means that there will be more people who are in search of medicine for the various age related illness.
Currently, the major challenge facing this sector is the availability of counterfeit products. These products tend to have the wrong amounts of ingredients and may even harm an individual (United States: Pharmaceuticals & Healthcare Report, 2017). The packaging used may even be inaccurate, leading to more confusion. Mostly, not all ingredients used are listed on the label, therefore it becomes impossible to know for certain whether the drug is appropriate for a specific individual or not.
The pharmaceutical sector is a market domain which is full of many opportunities. The sector within the U.S is the one that is best performing, hence it offers the best entrance opportunities for starters. This domain plays an important role in boosting the economy as it offers various job opportunities, all of which are all well-paying.
Haruya, M., & Kano, S. (2015). A new look at the corporate capability of personalized medicine development in the pharmaceutical industry. R&D Management, 45(1), 94-103. doi:10.1111/radm.12072
International Trade Administration. (2016). 2016 Top Markets Report Pharmaceuticals. Retrieved on 23 January 2017 from http://trade.gov/topmarkets/pdf/Pharmaceuticals_Executive_Summary.pdf
Malerba, F., & Orsenigo, L. (2015). The evolution of the pharmaceutical industry. Business History, 57(5), 664-687. doi:10.1080/00076791.2014.975119
Rahalkar, H. (2012). Historical Overview of Pharmaceutical Industry and Drug Regulatory Affairs. Pharmaceut Reg Affairs S11:002. doi:10.4172/2167-7689.S11-002
United States: Pharmaceuticals & Healthcare Report. (2017). United States Pharmaceuticals & Healthcare Report, (1), 1-116.