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Article
Publication date: 1 June 1997

Fred Pringle and Brian H. Kleiner

When one considers excellence in the pharmaceutical industry one might focus attention on the primary manufactured product, drugs. Emphasis would be placed on how the drugs

Abstract

When one considers excellence in the pharmaceutical industry one might focus attention on the primary manufactured product, drugs. Emphasis would be placed on how the drugs are developed, tested for safety, and manufactured. Other factors could include marketing and distribution of these pharmaceuticals. These practices although extremely important, represent a very traditional view of drug companies. In other words drug companies primary business is to develop, manufacture, and distribute drugs. Starting in the mid 1980s most drug companies viewed themselves this way. When the medical inflation rate soared to over 15% year after year, most drug companies arbitrarily raised the price of their drugs at this extremely high rate. At the time, despite pleas from consumer groups, the pharmaceutical industry justified these increases by pointing to the high cost of research and product liability. The recession of the early 1990's has had profound effect on health care costs. As businesses look for ways to cut costs in general, they no longer will tolerate constantly rising health care insurance premiums. The election of Bill Clinton in 1992 further accelerated cost cutting trends in health care. This effect stemmed from the threat of nationalised or other radical health care reform. President Clinton in fact, singled out the drug companies for price gouging. Since this time, medical costs, including drugs has declined to approximately 5%. Cost containment efforts such as HMOs and managed care have continued.

Details

Management Research News, vol. 20 no. 6
Type: Research Article
ISSN: 0140-9174

Article
Publication date: 26 June 2009

Mariano Rojas

Price becomes a main instrument for rationing pharmaceutical drugs in Central America as a consequence of pro‐market reforms implemented in the 1980s. Under…

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Abstract

Purpose

Price becomes a main instrument for rationing pharmaceutical drugs in Central America as a consequence of pro‐market reforms implemented in the 1980s. Under market‐rationing conditions, people's access to branded drugs does depend on their purchasing power and on the vector of prices they face. The purpose of this paper is to study the regional pricing strategy followed by pharmaceutical firms across Central American countries. These countries differ in such economic factors as per capita income, income distribution, market size, and nature and extent of their social‐security system; thus, there are conditions that foster the implementation of price‐discrimination practices across the region.

Design/methodology/approach

The investigation takes advantage of a large database with information about prices of identical drugs sold across Central American countries and produced by 17 large pharmaceutical companies. Regression analyses are used to study whether price discrimination exists in Central American drug markets and what pricing strategies are followed by different pharmaceutical companies.

Findings

Results show that there are significant differences in the prices of identical drugs across the Central American countries, as well as that pharmaceutical companies follow different pricing strategies.

Originality/value

Cross‐country price comparisons are usually based on constructed price indices, which imply losing detailed information about the products being compared. This investigation uses prices of identical drugs, rather than constructed price indices, to study cross‐country price differences by pharmaceutical companies across the Central American region. The study of price discrimination is crucial to understanding how markets end up rationing such an essential product as pharmaceutical drugs.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. 3 no. 2
Type: Research Article
ISSN: 1750-6123

Keywords

Article
Publication date: 3 July 2017

Vesela Veleva and Berkeley W. Cue Jr

The purpose of this paper is to benchmark current adoption of green chemistry (GC) practices by the innovative and generic pharmaceutical companies and examine the…

Abstract

Purpose

The purpose of this paper is to benchmark current adoption of green chemistry (GC) practices by the innovative and generic pharmaceutical companies and examine the drivers, barriers and future opportunities.

Design/methodology/approach

The authors examined publicly available data for the top 10 “big pharma” and top ten generic drug manufacturers. Using the IQ Green Chemistry working group framework for effective GC programs, they scored each of the 20 companies in seven key areas.

Findings

The study finds that generic drug companies have not embraced GC at the level of the innovative pharmaceutical companies (average GC score of 2 vs 11 for “big pharma”). Top two barriers for them include: lack of pressure and incentives, and the burdensome regulatory process for making changes in the manufacturing process.

Research limitations/implications

The research is based on publicly disclosed information. It is possible that some generic drug manufacturers have begun to work internally on GC but have not disclosed externally yet. Future research should include a survey or interviews of generic drug manufacturers.

Practical implications

The company-level analysis, benchmarking framework and results are of value for researchers and practitioners interested in advancing greater adoption of GC by the pharmaceutical industry.

Originality/value

This study provides the first company-level benchmarking of GC adoption by the largest innovative and generics drug manufacturers. It contributes to the literature on the barriers and drivers for greater adoption of GC.

Details

Benchmarking: An International Journal, vol. 24 no. 5
Type: Research Article
ISSN: 1463-5771

Keywords

Article
Publication date: 29 June 2010

Jayashree Dubey and Rajesh Dubey

This paper aims to analyze the present trends in pharmaceutical innovation and the impact of generic competition.

2110

Abstract

Purpose

This paper aims to analyze the present trends in pharmaceutical innovation and the impact of generic competition.

Design/methodology/approach

A secondary research was conducted to collect data related to new drug approvals of various classes over previous years; trends of investment in research and development; and the pipeline of new drug products of pharmaceutical companies.

Findings

While the new molecular entity (NME) approval rate has not improved over previous years, innovators have been aggressively pursuing the radical innovation process. Further, there has been a significant increase in incremental innovation. Pharmaceutical companies' investment in research has gone up resulting in higher number of application for new drug approvals. In India, pharmaceutical companies have significantly increased their research investment. However, the NME pipeline is still slim though there has been a significant surge in generic filings.

Originality/value

It provides a concise understanding of trends in pharmaceutical innovation and analyzes how various factors are shaping up the innovation process. It also throws light on the evolution story of Indian pharmaceutical companies to become drug innovators.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. 4 no. 2
Type: Research Article
ISSN: 1750-6123

Keywords

Article
Publication date: 2 November 2015

Jisu Huh and Wonsun Shin

This study aims to investigate pharmaceutical company-sponsored disease information websites that are created and operated by pharmaceutical companies. Without clear…

Abstract

Purpose

This study aims to investigate pharmaceutical company-sponsored disease information websites that are created and operated by pharmaceutical companies. Without clear indication of the site ownership, these websites look like non-advertising health information websites. Consumers’ responses to pharmaceutical company-sponsored disease information websites were examined in comparison to their responses to typical direct-to-consumer (DTC) drug brand websites.

Design/methodology/approach

A field experiment was conducted with a representative sample of US adults. Study subjects were randomly assigned to one of three live websites: pharmaceutical company-sponsored disease information website; DTC brand website with a high level of trust cues; and DTC brand website with a low level of trust cues. After viewing the assigned websites, participants completed an online questionnaire. The questionnaire included measurements for perceived website trust, attitude toward the website, intention to use information, perceived importance of prescription drug information, perceived health, prescription drug use, disposition to trust, prior experience with the website and demographic information.

Findings

The pharmaceutical company-sponsored disease information website generated higher website trust and more positive attitude and information use intention than the DTC drug brand websites. The results suggest that company-sponsored disease information websites may present some ethical issues related to website identity information transparency, which seems to inhibit consumers’ persuasion knowledge activation and proper coping responses. Because such websites look like non-advertising health information websites, consumers tend to evaluate them more positively and place higher trust in them than typical DTC drug brand websites with clear advertiser identification.

Originality/value

This is the first study examining pharmaceutical company-sponsored disease information websites, a relatively new form of covert DTC online advertising with potential ethical concerns due to the site identity transparency issues. This study’s findings suggest that consumers are likely to be more trusting and receptive of information presented in websites taking the form of a non-advertising health information website than in DTC brand websites.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. 9 no. 4
Type: Research Article
ISSN: 1750-6123

Keywords

Book part
Publication date: 24 August 2011

Tommy Tsung Ying Shih

Researchers continue to seek understanding of industrialization as a state managed process. How to create and implement new industries based on advanced knowledge is on…

Abstract

Researchers continue to seek understanding of industrialization as a state managed process. How to create and implement new industries based on advanced knowledge is on the policy agenda of many advanced nations. Measures that promote these developments include national capacity building in science and technology, the formation of technology transfer systems, and the establishment of industrial clusters. What these templates often overlook is an analysis of use. This chapter aims to increase the understanding of the processes that embed new solutions in structures from an industrial network perspective. The chapter describes an empirical study of high-technology industrialization in Taiwan that the researcher conducts to this end. The study shows that the Taiwanese industrial model is oversimplified and omits several important factors in the development of new industries. This study bases its findings on the notions that resource combination occurs in different time and space, the new always builds on existing resource structures, and the users are important as active participants in development processes.

Details

Interfirm Networks: Theory, Strategy, and Behavior
Type: Book
ISBN: 978-1-78052-024-7

Keywords

Book part
Publication date: 20 August 2012

Tannista Banerjee

Purpose – The cost of new drug development is increasing every year. Pharmaceutical companies use R&D joint ventures, mergers, and outsource different stages of…

Abstract

Purpose – The cost of new drug development is increasing every year. Pharmaceutical companies use R&D joint ventures, mergers, and outsource different stages of pharmaceutical R&D activities for a faster and cost minimizing method of innovation. Pharmaceutical companies outsource R&D activities to independent small biotech or pharmaceutical companies that specialize in different stages of pharmaceutical R&D. This chapter examines the determinants of the payment structure of research contracts between large bio/pharmaceutical companies and specialized research firms.

Methods – Determinants of R&D contracts are analyzed using detailed R&D contract data between bio/pharmaceutical companies and independent research firms for 10 years. A multinomial logit model is used in order to understand the determinants of three different types of contracts; royalty contracts, fixed payment contracts, and the mixed contracts.

Findings – Under uncertainty, the likelihood of a royalty contract rises for the early stages of the research and with the patent stock of the research firm. It is more likely to observe both royalty and fixed payment if the pharmaceutical client has past contracts with the same research firm. The results also suggest that if Food and Drug Administration (FDA) is more stringent in any disease area in reviewing the new drug application, then the likelihood of signing pure royalty contract decreases.

Implications – Understanding the nature of R&D contracts and the effects of FDA's behavior on the pharmaceutical R&D contract is important because these contracts not only affect the cost of new drug invention but also the quality and the rate of invention.

Value – Results are useful for both the pharmaceutical companies and the economic/business researchers.

Details

The Economics of Medical Technology
Type: Book
ISBN: 978-1-78190-129-8

Keywords

Article
Publication date: 21 November 2011

Kareem Abdul Waheed, Mohammad Jaleel and Mohammed Laeequddin

This paper seeks to empirically identify the major factors that influence physician loyalty behavior in prescribing certain brands of drugs.

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Abstract

Purpose

This paper seeks to empirically identify the major factors that influence physician loyalty behavior in prescribing certain brands of drugs.

Design/methodology/approach

Testable hypotheses were developed with respect to physician loyalty behavior regarding drug prescription practices, and a survey questionnaire was designed to capture the data from 71 physicians, as a convenience sample. The hypotheses were tested by PLS path modeling.

Findings

The major finding is that tangible rewards to physicians by the pharmaceutical companies lead to prescription loyalty. The second major finding is that the professional values of pharmaceutical sales representatives (PSR) impact significantly on physician prescription loyalty. The hypotheses related to the impact of PSR personality, drug quality, corporate reputation and professional influence on prescription loyalty were not supported in the study.

Practical implications

The results should prove useful to pharmaceutical companies in developing physician loyalty to particular brands as well as enhancing the understanding of drug control authorities and governmental health policy makers, in controlling unethical medical practices by physicians.

Originality/value

This paper reports an original empirical study on physician loyalty behavior in the context of drug prescription.

Details

International Journal of Pharmaceutical and Healthcare Marketing, vol. 5 no. 4
Type: Research Article
ISSN: 1750-6123

Keywords

Article
Publication date: 11 November 2014

Genevieve Elizabeth O’Connor

This paper aims to review the progression of the pharmaceutical industry through the lens of government legislation in the USA. The goal of this paper is to provide a…

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Abstract

Purpose

This paper aims to review the progression of the pharmaceutical industry through the lens of government legislation in the USA. The goal of this paper is to provide a comprehensive review of pharmaceutical marketing practices while providing direction for emerging pricing and promotional approaches.

Design/methodology/approach

This paper offers a comprehensive review of pharmaceutical marketing practices through an exhaustive review of the literature. Further, suggestions are made based on emerging marketing techniques found in the literature.

Findings

Changes in government legislation will continue to play a significant role in promotional activities of the pharmaceutical industry. This study identifies specific pricing and promotional tools the pharmaceutical industry can use in response to these emerging changes. Specific actions such as enhancing public image, reconfiguring sales forces, outsourcing and optimizing the pricing mix are suggested.

Practical implications

This paper presents clear guidelines for managers by affording applicable practical tools to offset changes posed by government legislation.

Originality/value

This paper seeks to fill a gap in research surrounding pricing and promotion in the pharmaceutical industry. Further, this paper offers concrete pricing and promotional approaches for pharmaceutical management.

Details

Journal of Product & Brand Management, vol. 23 no. 7
Type: Research Article
ISSN: 1061-0421

Keywords

Article
Publication date: 1 July 2006

James S. O'Rourke

This paper examines communication strategies, organization, and tactics of the pharmaceutical firm Merck & Co., Inc., as corporate executives and staff faced the

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Abstract

Purpose

This paper examines communication strategies, organization, and tactics of the pharmaceutical firm Merck & Co., Inc., as corporate executives and staff faced the withdrawal from market of Vioxx, the company's most profitable product.

Design/methodology/approach

The paper explores decision methodology and criteria as Merck executives sought to communicate with their most important stakeholders during the most dangerous and critical period in the company's history.

Findings

As well prepared as Merck & Co. was for a product withdrawal, nothing could have prepared company officers for communicating on the scale, scope, and volume that this crisis would demand. The value of a well‐conceived crisis response plan is underscored, as well as a flexible, responsive organization. Among the more notable findings is that even large, well‐funded, experienced professionals may need to reconsider their organizational structure as they address a multi‐faceted, large‐scale problem. Issues include staffing, functional expertise, length of time on task, and strategic use of key resources.

Practical implications

A number of important lessons in communication strategy have emerged from the experience of withdrawing Vioxx from the market and defending the company against both litigation and continuing bad press. First, a crisis communication plan is essential. Their plan allowed Merck & Co. to identify key individuals to be involved, their roles and responsibilities. A second important lesson concerns persistence and a long‐term view, despite near‐term pressure for earnings performance. Overcoming plaintiffs‐bar litigation may take another five years. A third lesson involves identifying and measuring those issues which Merck stakeholders most needed to know in order to correct misconceptions. Finally, corporate officers recognized that they must have faith in their decisions and recognize the value of their employees (across the organization) in communicating the company's message.

Originality/value

This paper examines the pharmaceutical firm Merck & Co., Inc. and the withdrawal from market of Vioxx, the company's most profitable product.

Details

Journal of Business Strategy, vol. 27 no. 4
Type: Research Article
ISSN: 0275-6668

Keywords

1 – 10 of over 16000