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The Pharmaceutical Industries Facing Challenges Commerce Essay

Paper Type: Free Essay Subject: Commerce
Wordcount: 2147 words Published: 1st Jan 2015

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In last few years pharmaceutical industries facing challenges because of economic downturn, increased healthcare cost, rise development cost, pharmaceutical sales in the market, increased competition for generic drug products, regulatory pressure cause weak US pharmaceutical growth. Few blockbuster drugs come to the market Because of decreased New Chemical Entities (NCE) research, development & marketing. Pharmaceutical manufacturing sector plays serious role in US economy. Manufacturing and Good Distribution Practice (GDP) for pharmaceutical drug products decreases as compare to last few years. But at the same time, Chinese share increases up to 17%. It is important part of US economy, but manufacturing is no more prevailing part of US economy. Finally some industries adapted few solutions to overcome problems. Analyst focuses on commercial view of the companies and gives some advice that will use in current market and successful future.

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Small scale & large scale manufacturing companies have to think about their production in growing global market. The main object of topic is to evaluate and observe future of the manufacturing practice in global market by creating model. Due to growth of market, companies have to reduce manufacturing cost to stand in competition, raise profits and market share on expanding goal audience. They create new drug products in the market and maintain required quality of the drugs with low cost to hold their regular customer and attract new customers.

Figure 1 Frame Work Diagram

Global Environment

Companies are going to preplan before any outsider affect the manufacturing process of the drug product. Company can aware of market economy, globalization, latest technologies develop in manufacturing field, demographics etc.

Strategic Responses

Strategic response in pharmaceutical manufacturing is used in production flexibilities, create design of new drug product, new manufacturing process with newly discover drug products, connection with internet which gives good communication between employees and data.

SME Recommendations

In last step, more focus on prescription information then description information. Main focus of prescriptive strategy is on customer satisfaction, market scenario, newly develop technologies in the pharmaceutical field and networking.

Business Strategy

First of all companies are aware of market, competition, relative drug manufacturing, material and employment costs, governments legal policies as per countries rules. Create a plan and criteria to achieve successful marketing, saving money and revenue, highly trained staff & new technologies with freshly set goals in business sector. It includes financial investigation, business fact, material sourcing, stock management, manufacturing, in process management, distribution, promotion and marketing management. Changes in the global market is very quick so by using metrics and management guidelines to improves business strategies, add and improve necessary information in business. Management can give change to every employee for their individual suggestion to improve business strategy. [1]

Growing Environment

Manufacturing of one drug product is difficult task to do. Because it to difficult to understand demand of the drug product in coming few years. Company may invest millions of dollars for new drug manufacturing, its approval, marketing and promotion. If drug cannot pass in clinical trial because of its undesired adverse effects more than its benefit, so company has to spend money and time to solve this problem. Company spent 3 to 4 years and billions of dollars for building facility for particular type of drug product and there is no security that the new product is ‘cost effective’ and capable enough to fit in company’s criteria & profitable enough for the company. [2] Generic drug companies do not face these types of problems and also the margin of profit is less as compare to the Brand Name Drug Company.

Just in Time (JIT) in manufacturing

Just in time is a pull method of production. Just in time is applied in drug manufacturing process which is used to decrease in process methods and time.

JIT is suitable production arrangement when: [3]

Specific number of the products prepared by manufacturing process

Drug products with high value

Less time setup for drug on machine

Highly trained staff and flexibility in work

Standard product with stable production

Quality of the product can be ensured

Just in time is used to improve drug product quality and effectiveness. Particular level of the raw material which is specified by the company is decrease at the particular level then company can order new raw materials in the company so it helps to save space in warehouse and reduce to check physical and chemical test of the raw materials. Firstly it was used in ford motor company by Henry Ford. [4] It basically focuses on management and how to implement supply chain in to the specific manufacturing process. JIT gives clear increase in liquid asset of the company by creating tax free and cash flow. Company launch new drug product in to the market at that time low output time is beneficial for unexpected increase in drug requirement. Long output time is normally making detail list of all the items in stock of the drug product before increasing the demand of product. If we can use JIT in pharmaceutical manufacturing which is not good decision because company has to spent more money to create sturdy method. So we can say that if generic drug product companies use JIT approach is beneficial to them as compared to Brand Name Drug Company. Margin of the saving money by the generic drug product companies are less then Brand Name Drug Company. [5]

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Weakness of JIT

JIT normally used in highly automatic drug production but not in custom made item. Every one relies on others because they are mutually dependent to each other. Weakness of JIT affects on supply chain and it become more costly. It causes drug market fluctuation, improper stock, lack of communication in every stage and also may leads to decrease drug production. [6] Sometime small quantity of material has been used to overcome defective drug product result. If supplier is not going to supply raw material in time to the company, it cause delay in production and distribution. Particular space is used for finished product so surprising order creates problems in finished product department.

Global Pharmaceutical Market

Figure 2 Global Pharmaceutical Industry

Nowadays growth of pharmaceutical markets in the world is 4 to 6% & expected value is $825 billion. As per the experts review, growth of pharmaceutical market is increase up to 4 to 7 % by 2013. And expected value of the market increase up to $975+ billion by 2013. In recent scenario, pharmaceutical markets are growing fast in the region of Asia-Pacific. It is because of very low cost and favorable environment with contract manufacturing and generic drug production. Increased in Reach and Development market in this region was helped to gain money up to US $187 billion in 2009. Now limited companies are involved in R& D program. Sometime Research & Development takes more time as expected so budget increases but company cannot increase product cost due to government policies. As a result companies are not spending time for new drug Research & Development. Most recent growing pharmaceutical companies are in India, China, Indonesia, South Korea, and Malaysia due to less cost of the drug product, less labor cost, good health insurance strategies as compare to the US market and it is beneficial to the company for its growth. China possibly becomes biggest pharmaceutical market in the world. India is the 3rd largest manufacturer of pharmaceutical drug product in the world. Expected growth of the pharmaceutical industries in global market in coming years is in China and Russia because they have strong support of government. [7]

Demographic in pharmaceutical market

With the help of research we can know the demographic review, macroeconomic indicators, disease analysis etc. It is used to know the strategies in the market and successful possibilities in the global pharmaceutical market. Some topics which helps in demographic survey such as:

Analyst View

Basically analyst checks all details of clinical research study, evaluate them if any problem in machine, human error, quality control system, in process methods etc, arrives in the study, in that case they can overcome the problem and improve with the help of specific method. It helps to save money by increasing product quality. [8]

Control in operating cost

How to improve quality with less cost of the drug product is very challenging in pharmaceutical market. Understanding cost approach is used to increase margin of the drug manufacturing. Pharmaceutical industries have to take active steps in order to control cost. Cost of Research and Development increases upon discovery of new blockbuster in the market.

Attracting and holding skilled workers

In pharmaceutical industries, experience and knowledge in the employees is very important. People who are working in the industries are skilled with good knowledge about market, excellent communication skill, Professional behavior, unity, able to manage work load etc. affect the growth of company. Labor cost of the United States is very high as compare to China & India. [9]

Pharmaceutical Companies facing Challenges

Pharmaceutical companies are facing challenges to develop high quality of drug product with less cost due to increase population in the world. To create quality of the drug products give less yield and high market cost, as a result consumer may not use drug product. To solve this problem company has to create new production formulas. They spend billions of dollars for its research; developments, approval, advertisement and marketing with less drug cost without compromising gross send on R & D. Companies have to face some geo-political situation. For example; AIDS is major problem in the world. Governments are demanding strict attention on AIDS and give pressure to pharmaceutical companies to search & develop new drug product which is used to cure AIDS. Brand Name Drug Company has to face some challenges because after the patent expiry they are allowed new product in to the market, so other companies create same drug which are equivalent to brand name drug in all aspects is called as Generic Drugs. Generic manufacturer do not have to get time and money for R& D, as a reason generic drugs are less costly. Market share of Brand Name Drug is declines due to generic drug. Health insurance promotes the generic drug use among the consumers for saving bills as a result less research on new drugs. Following are some solution which helps to overcome some challenges facing by pharmaceutical companies.

Figure 3 Some Solution stack & Alignment with Pharmaceutical Trends & Aspirations

Pharmaceutical solution provides new and unique method for solubility profile based on drug properties and modifying some process for drug development. These solutions provide management capabilities through various processes leading to progress in work for high level of efficiency. It is very flexible and applies enough in Active Pharmaceutical Ingredients, DP and Biotechnological drug manufacturing. With the help of true SOPs, we can check manual errors done by employees evaluate it and create a new process how to solve this problem. ISA-95 and ISA-88 is used to define challenges face by clients in management, process analysis, in its data, in schedule etc.


As per my opinion JIT is very useful system for manufacturing company with wide consignment, suitable material with quality, employees, and different types of equipments can always accessible when required. JIT decreases product waste and provides good quality of products which is prepared by manufacturer, supplier and consumer. In short, JIT is a one of the Ladder with continuous stages of loyalty to do job in proper way in growing global market. Nowadays pharmaceutical industries face many challenges of surviving in this global market. Generic manufacturer are facing competition for generic products, force for restrict drug price due to government policies and increase R&D cost due to governmental demands. Active pharmaceutical Ingredients production began in china and India before few years.


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