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Health spending accounted for 9.3% of GDP on average across OECD countries in 2011. The Pharmaceutical expenditure, as a percentage of total expenditure on health, accounted for 15%. The pharmaceutical sector is highly regulated. On describe the major characteristics of the world pharmaceutical industry as one increased globalization, changing structure of competition and increased competitiveness. This are growing pressures on discovery and development. Drug liabilities become more frequent and more costly. The pharmaceutical industry is under immense pressure by external and internal stakeholders. Government and National Health Services are monopsonic practices. Pharmaceutical companies are criticised for high prices, over-intensive sales and marketing activities, presents to medical doctors, clinical trials and industry – government alliances. Lawyers, medical journals, physicians, politicians, and the media use product liabilities and marketing activities to denounce pharmaceutical companies as culprits. The pharmaceutical sector needs to demonstrate responsibility and take steps to increase awareness. Transparency would increase the credibility of the pharmaceutical industry. Corporate governance will prevent corruption by being in compliance with the legislation and establishing their own internal policies designed to prevent corruption. All firms will act more responsibly. In order to rebuild the trust the industry needs to work together and quickly.
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Continuous innovation is one of the pharmaceutical industry's most defi ning characteristics. New medications can be crucial for maintaining the quality of human life, and may even affect its duration. The sales potential is staggering: the global pharmaceutical market is expected to reach $1.1 trillion by 2015. The pressure to succeed is tremendous. Yet, pharmaceutical innovation is hardly an orderly, predictable process. It follows a technology-push model dependent on a meandering path of scientifi c breakthroughs with uneven timing and hard to foresee outcomes. Technological competency, decades of rigorous research, and profound understanding of unmet customer needs, while necessary, may prove insuffi cient for market success as the critical decision for commercialization remains outside the fi rm. Drug innovation as a business process requires savvy strategic, organizational, and managerial decisions. It is already enjoying intensive research coverage, giving rise to abundant but relatively dispersed knowledge of the mechanisms driving drug discovery and development. In this chapter, we present a comprehensive overview of the process of drug innovation from a business and academic perspective. We discuss the evolving organizational forms and models for collaboration, summarize signifi cant empirical regularities, and highlight differences in market positions related to fi rms' strategic orientation, innovation emphasis, attitudes to risk, and specialized resources. As a guide to future research, critical drivers and modes for drug innovation are systematized in a unifying framework of characteristics and process decisions, and multiple areas in need of further scrutiny, analysis, and optimization are suggested. Because of its rich potential and high signifi cance, research on drug innovation seems poised to gain increasing momentum in the years to come.
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Marketing Intelligence & Planning
