Introduction
Pharmaceutical businesses is one of the most innovative and unique kind of enterprise that serves the entire population. There are chances that the domestic pharmaceutical businesses have a small population which is desirable for the competition. The pharmaceutical operations involve the production of the medicines that will answer the needs of the people regarding their health problems. Therefore, the priority of the industry is to support the ongoing research and development of the necessary and in-demand medicines. This action of the sector is notable in complying with the standard procedures to maintain and improve the effectiveness of the marketed medicines.
Background and Problem Statement
The pharmaceutical organizations are seeking the best method in which they can improve the medicines. Furthermore, in order to provide this vision, the organizations are looking for the right people who have the talent in pharmaceutical operation. If successfully created a product, the organization will market the medicine according to the prices in which they assume that the price is right. However, even if there is a recognizable effort to achieve the effectiveness of a product, there is a great problem that shrouds the pharmaceutical companies. Most of the marketed and newly developed products fail to give the expected return of investments which certainly affects the entire operation of the business. The organization assured that all the products are created to answer the demand but the most confusing here is that there is no demand for the create product. This study will attempt to investigate the reasons on why the new pharmaceutical products fail to give the forecasted revenue.
Research Aim and Objectives
The main aim of the study is centered in acknowledging the reasons or the factors that contributes in the failure of the new products in pharmaceutical companies. In order to gain the necessary information, there are four objectives that need to be settled. First is to determine the type of products preferred by the customers. Second is to recognize the requirements of the Health Organizations/Department in creating such medicinal products. Third is to compare the new pharmaceutical products on the first marketed products. And fourth is to measure the criteria in terms of pricing, volume, effectiveness, conditions, patent, and innovativeness.
Literature Review
Pharmaceutical sectors are also affected by the challenging business environment. Like the other business industries, the pharmaceutical companies also experience the altering of the marketplace and the changes in customer preferences. This makes the business to focus more in their customer. However, the actions and strategies done by the pharmaceutical organizations became more crucial than ever (Accenture, 2009). The recent trend of failure in the performance of the pharmaceutical products appeared to be innovative incompetent and the sudden increase in the drug prices. It is important that the companies manage to generate the products in a complex innovative environment and remain for a long-time, but apparently, there are evidences that companies cannot comply on this goal because of the timing of the new product introductions. Furthermore, there are two emerging types of medicines that have been commercialized in the market – generic and specialized. The failure to technological pioneers increases the effectiveness of the imitation in the market (Graham & Higgins, (2007). In addition, the introduction of the new products is subjected to higher prices than the other competitors. Although there is an increase interest in discovering new pharmaceutical products along with the rise of the health care needs, still consumers will make the decisions whether to buy or not. The complex economic issues in discovering the effective drugs are fully acknowledged by the companies. Therefore, the research and development strategies of the pharmaceutical industries are considered as another factor and may influence on how the product works well in the market (CBO, 2006). It is also determined that the model used in the industry changed making the products fail to describe the interrelationship of the pharmaceutical industries in its other links like the health organizations, health care settings, consumers, and the overall health care costs.
Methodology
The applied method in the study is the use of secondary information. The materials that can be use are the Price Consumer Index, Health Organizations’ Reports, Pharmaceutical or Industry report, and the consumer case studies. The materials are good references for the study to investigate the reasons on the failure of the pharmaceutical products in returning the investment. The information that can be obtained will assess according to the objectives of the study.
References:
Accenture, (2009) Sustaining High Performance through Customer Centricity: How customer-centric business models drive growth for pharmaceutical companies [Online] Available at: http://www.accenture.com/NR/rdonlyres/98543962-E4BC-49CC-AE77-5A46746D0C95/0/Accenture_Customer_Centricity_Pharma_2009.pdf [Accessed 10 August 2010].
CBO, (2006) Research and Development in the Pharmaceutical Industry, Congressional Budget Office [Online] Available at: http://www.cbo.gov/ftpdocs/76xx/doc7615/10-02-DrugR-D.pdf [Accessed 10 August 2010].
Graham, S.J., & Higgins, M.J., (2007) The Management of New Product Introductions in the Pharmaceutical Industry [Online] Available at: http://www.aeaweb.org/annual_mtg_papers/2008/2008_467.pdf [Accessed 10 August 2010]
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