Business model pharmaceutical industry

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If ever one sector was undergoing explosive change it's the Pharmaceutical Industry says "Paul Papas, partner and Americas Life sciences leader, IBM Global business Services. (Jusko, 2008) The industry's business model is growing weaker due to expiring of blockbuster drugs, increasing competition from generic drugs and lesser drugs that are economically viable and innovative.(Anthony, 2009) There have been a wave of mergers and acquisitions which have done little to satisfy the public market regarding the future of the global pharmaceutical giants.(Leonard,2007). In addition to this with the changing compliance demands in sales and marketing, research and development, manufacturing challenges and shifting client base pharmaceutical businesses have to accept the fact that the it is time they changed for adapting to this challenging volatile environment and accept the fact that the only thing certain is change.(Jusko,2008) .

Glaxo smithkline came up with a threefold strategy to counter the challenges in the pharma industry which they believe will transform GSK into a company that delivers growth, less risk and improve financial performance.(Gsk,2008) They believe these will enable them to retain their leading edge position as a company by meeting patients and healthcare providers needs into the future.(GSK,2008).The new strategy aims at diversifying the group's operations and turnaround the company's poor performance in 2008.

Firstly grow a diversified business plan, secondly deliver more products of value and thirdly simplify the operating model.

Grow a Diversified Business Plan

Drive growth in the pharmaceutical business in our core markets

Glaxo have established markets in USA, UK, France, Germany, Italy and Spain. They received approval for major drugs such as Tyverb for advanced breast cancer, Volibris for pulmonary arterial hypertension and Avamys for new allergic rhinitis. They intend to refocus on marketing to demonstrate value and develop new innovative products.(GSK,2009)

Deliver our ambitious vaccines forecast

Glaxo believe that healthcare providers recognize vaccines as critical in preventive healthcare. Their proven capability, strong pipeline and high barriers to entry faced by their competitors work in Glaxo's favour and are expected to be a source of future growth. They have launched new vaccines and are working towards expanding franchise in Japan and emerging markets. They achieved successful approval from FDA for rotarix, cervarix, boostrix and kinrix vaccines. They received European authorization for Synflorix a paediatric pneumococcal vaccine.(GSK, 2009)

Fulfil the potential of emerging markets

Under the current scenario of the pharmaceutical industry this is a step that is a must for any company looking to improve its business model. (pharma 2020pwc,2009)

Emerging markets feature a less defined distinction between pharmaceutical, over the counter and retail market structure. Glaxo are taking up the opportunity to improve this ability of theirs and further energise their business in fast growing emerging markets.

Expand our business in Japan

Gsk plan to expand their business into Japan as they see them as their key market. They have a vast product pipeline and expect to launch more than 40 products over next five years. Lamictal for epilepsy and Adoair for COPD were recent launches in the Japanese market.

Grow the Consumer Healthcare business

Glaxo's healthcare business consists of a portfolio of brands in three key segments

  1. Over the counter
  2. Oral Healthcare
  3. Nutritional Healthcare

They launched sensodyne in the Chinese market their first major consumer launch in a decade.

The brand portfolio consists which includes alli for weight loss, panadol - range of analgesics and lucozade.

Catherine boyle 2008 july

oct 2008world pharma news

Fierce biotech , 2009

business insights , 2009

By John O'Doherty

Published: October 28 2009 13:28 | Last updated: October 28 2009 13:28

GSK in generic drug alliance

By Gill Plimmer in London

Published: June 15 2009 22:05 | Last updated: June 15 2009 22:05

Navid Malik, analyst at Matrix Corp, said the deal was likely to signal a wave of further deals. "This gives Glaxo instant gratification," he said. "It generates sales immediately and allows GSK to expand in emerging markets with a ready made mix of products."

Seven emerging nations - Brazil, Russia, India, China, Korea, Mexico and Turkey - could account for 70 per cent of pharma sales growth by 2020, according to a study by UBS. Rising incomes and ageing populations in poorer countries also mean more people are suffering from rich country diseases such as cancer.

Last month, GSK struck a similar $389m deal to acquire a 16 per cent stake in South Africa's Aspen Pharmacare.