Pharmaceuticals Industry

Paper Summary:

In this article, the writer covers the background and development of the pharmaceutical industry in the United States. The writer discusses the social facts and institutions, political actors, economic forces and environmental realities of this issue. In addition, most importantly, the writer looks at the demographics and income levels which have driven pharmaceutical innovation in the United States. The writer maintains that the high regulatory pressures, price pressures and lack of future such blockbuster markets dictates that pharma companies will have to innovate a lot more in niches, more products, smaller markets. The writer concludes that large pharma companies which grew up in a time of plenty will therefore have to radically change how they do business, from increasing acquisition, cooperative agreements, exemptions from regulatory approval and other such measures.

Outline:
Introduction
Where Pharmaceuticals are Today
Components of Pharmaceutical Innovation
Demographics
Social Institutions
Cultural Beliefs
Economic Forces
International Relations
Conclusion
Bibliography

From the Paper:

"Since the US is largely a private-insurance country, there is a sort of free market for pharmaceuticals. Medicare sets prices through the CPT mechanism, but the prices for new drugs which are set by Medicare, and observed by other third-party players, are high as compared to other countries.
"Part of the reason that US prices are higher than elsewhere is that the government takes a much larger role in other major OECD countries, such as France, the UK, Canada and Germany. In those countries, the health ministry negotiates and publishes prices--generally much less than those in the United States. In developing countries, such as Mexico, a larger private-pay market and low incomes dictate that local branches of the pharma companies charge lower prices in order to stay in the market."

Sample of Sources Used:

• Bureau, US Census. (2001). An Aging World. Washington, DC: US Census Bureau.
• Economist. (2007, October 25). The Pharmaceutical Industry: Beyond the Pill. Economist , p. n.p.
• Economist. (2007). World Atlas. London: Economist.
• Herper, M. (2007, October 29). Drug Drought. Forbes , p. n.p.
• Hoover, D. R. (2002). Medical expenditures during the last year of life: findings from the 1992-1996 Medicare Current Beneficiary Survey - Cost of Care. Health Services Research , n.p.

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