Strategy Management Pharma Industry

Question: Discuss about theStrategy Management for Pharma Industry. Answer: Introduction The company that has been chosen for this report is Pfizer. The reason why this company has been chosen is because Pfizer became a giant owing to its blockbuster drug Lipitor. The company has grown mostly inorganically and expanded its reach to include small and innovative players in its basket. This report will highlight the current situation of the company and the drug pipeline. The external industry analysis will look at other players and various factors that are driving this industry. We will then look at the internal company analysis and the different options that this company has for the future (Abbott 2013). Analysis of the Current Situation The pharma industry has four major types of players The branded drug producers, the generic makers, the biotechnology giants and the OTC makers. Pfizer operates in the branded drug and OTC space. Earlier the decision making was mostly based on the handful of a group of physicians the consumers and the payer companies had no say whatsoever. This has been the reason why the pharma companies came into the eye of the storm wherein a need to balance the way they operate must come into picture (Sams-Dodd, 2013.). Source: FDA. US The company now provides free HIV drugs in developing countries where the prevalence of HIV is more than 1% of the population. The company has grown organically through major mergers and acquisitions. In the year 2016 the biggest merger was about to take place worth $160 billion between Amgen Plc. and Pfizer Inc. but the deal could not reach the desired result since there are some new rules from the United States Treasury that stand against inversions. This deal would have given Pfizer access to the Biotechnology space. But it did not make it through. Pfizer had several other deals the best was with WarnerLambert acquisition worth $111.8 billion (Ramakrishnan 2012). The current scenario also looks at a number of smaller acquisitions that the company is looking at in the oncology research area. The company is also looking at the mergers when it wants to enter a new market. External Analysis The external analysis will look at the PESTEL analysis and the 5 forces to look at the current trends in the industry PESTEL Political The political landscape is currently against the pharma space. The regulations have become stricter. The number of years a patent is valid has been reduced drastically thus causing the shortening of the product lifecycle. The issue is also with excessive lobbying that the pharma companies have been charged with. They have always been more susceptible to lobbying in various countries with political organizations. Economic The pharma giants have faced growth issues over the last decade owning to several factors like lack in the number of blockbuster drugs, high penetration of generic drugs, issues with the number of patents getting approved since FDA norms have become stricter. Social As already discussed, the social aspects have to be taken care with the help of pharma companies having complete access over the need of pharmacovigilance. They have lobbied against some laws that may prove a hindrance to their sales targets and growth initiatives. The issue can also be seen with certain pharma practices like bribing and gifting physicians to garner sales targets (Ponce 2013) Technological The issue here lies with pharma companies developing investigator platforms during trails that can reduce the timeline for clinical trials but such techniques have not been adopted with the faster pace they should be adopted with. Environmental These pharma giants have evolved in a number of ways as far as environment is concerned. They have adopted greener techniques. Pfizer as an example is one of the greenest companies of the world. Legal There have been several legal challenges and implications for this industry overall we can see that there have been several published houses about the operation, establishment, liquidation and foreign invested enterprises which stated that the laws are being simplified in order to attract foreign investors. This has thus impacted globalization in a number of ways. Porters 5 forces Porters Analysis Identify the competition Pharma companies are giants in themselves. They do not have any external competition. However they are effected by competition within themselves. The issues arise when two companies file for similar patents and research is carried on same area of medical science. (Rodil 2013.) Identify substitutes for product or service Medicines do not have substitutes, hence the substitution effect is very low in this case. Buyers power The buyers power is also very low and they do not have much say as far as prices are concerned. Power of Suppliers The suppliers also do not enjoy a greater say since the molecule is built by the pharma giants and only they know about the formulation history for the molecule. Arrival of New Competitors The industry was driven by the big companies earlier but now small startups working on specialized sciences have a greater say in this aspect. They are most innovative compared to the big giants. Thus the research and marketing capabilities are outsourced to the big companies. Internal Analysis SWOT Favorable Unfavorable Internal Strengths Pfizer is a giant in the pharma scape. It has huge cash reserves and a very well developed product pipeline. The company also is a great place to work hence draws great talent in the industry. Weakness The major weakness has been the lobbying allegation levelled against the company. This has brought a number of law suits against the company. The settlement costs run into millions. External Opportunities The opportunities lie in the merger and acquisition successes that this company has seen, This experience can be leveraged in the future for biologics acquisition and other niche company merger management (Bonner 2015). Threats The major threat in developing markets is through generic drugs that have more bargaining power in terms of price. These pharma giants have evolved in a number of ways as far as environment is concerned. They have adopted greener techniques. Pfizer as an example is one of the greenest companies of the world. Thus we can see that the company can achieve double digit growth through inorganic growth and focus on innovative medicine. The company must also steer clear of lawsuits against it against major pharma giants and lobbying charges (Moustafa and Trmouillaux-Guiller 2015). Conclusion and Recommendation The current scenario also looks at a number of smaller acquisitions that the company is looking at in the oncology research area. The company is also looking at the mergers when it wants to enter a new market. In order to supply medicines relevant to local customer base Pfizer needs to provide autonomy to local managers but at the same time everything should not be decentralized. Pfizer must look at the aspect of economies of scale without compromising local relevance. A possible platform can be created for the services and products which are locally delivered. This polices will the company to establish itself in Chinese market. They must thus look forward to market development and market building in major untouched geographies. There are certain recent trends that have impacted the industry in more ways than previously understood. The companies like Roche, Ciba-Geigy and Sandoz started off as family heirlooms and then eventually they became pharma global player. In this report we will also look at the effect of globalization and innovation on this industry. We will also look at the key industry trends. The external industry analysis will look at other players and various factors that are driving this industry. We will then look at the internal company analysis and the different options that this company has for the future. References Moustafa, K. and Trmouillaux-Guiller, J., 2015. Molecular farming on rescue of pharma industry for next generations.Critical reviews in biotechnology, pp.1-11. Abbott, F.M., 2013. Science, Scarcity and Public Health: The Search for New Pharma Models.Scarcity and Public Health: The Search for New Pharma Models (May 20, 2013). Rodil, ., 2013. Targeting biomed cluster from a mature pharma industry: the Medicon Valley experience.Technology Analysis Strategic Management,25(7), pp.871-889. Ponce, N., 2013. Operational Excellence in the Indian Pharma Industry: Real-time Online Delphi Study-Results. Bonner, L., 2015. Pharma industry must pay for drug take-back programs in some California counties.Pharmacy Today,21(7), p.78. Sams-Dodd, F., 2013. Is poor research the cause of the declining productivity of the pharmaceutical industry? An industry in need of a paradigm shift.Drug discovery today,18(5), pp.211-217. Ramakrishnan, N., 2012. Chromatographic finger print analysis of Rumex vesicarius L. by HPTLC Technique.Asian Pacific Journal of Tropical Biomedicine,2(1), pp.S57-S63.