In seven pages this paper discusses the global market as it pertains to the pharmaceutical industry and examines the oligopolistic market structure and also considers various pricing issues. Five sources are cited in the bibliography.
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result of the fact that prices for these products have increased higher and more quickly than the rate of inflation. First, the legislature is considering changing laws that would allow
generic companies to enter the market sooner. Secondly, consumers are using alternative treatments. Companies within the pharmaceutical industry are involved in "manufacturing, fabricating, and processing drugs into pharmaceutical preparations for
human or veterinary use" (Active Media, 2001). Pharmaceutical products are made by two different kinds of companies. One is called ethical drug manufacturers; these are the companies who have developed
a medication and hold a patent on it for a certain number of years (Active Media, 2001). The other type of company that manufactures these kinds of products are
called generic drug manufacturers (Active Media, 2001). Once the patent expires, other drug companies can produce the drug under the generic label. Products manufactured by either the ethical drug
manufacturer or the generic drug manufacturer can be obtained only through a doctors prescription (Active Media, 2001). Over the counter (OTC) pharmaceuticals are the kind that consumers can purchase
off the shelf on their own (Active Media, 2001). The pharmaceutical industry is a highly competitive one. Each company is trying to beat the competitors to market with the
latest drugs (Active Media, 2001). Thus is why it is intensely research and development oriented (Malerba and Orsenigo, 2001). It is an industry that sustains a steady growth of about
3 to 5 percent per year although the industry realized profits of 15 to 16 percent in 2000. This upsurge was largely due to the specific successes of Warner-Lamberts Lipitor,
Eli Lillys Zyprexa, Monsanto/Pfizers Celebrex, and Mercks Vioxx (Active Media, 2001). The industry has experienced numerous consolidations, such as the merger between Warner Lambert and Pfizer. Warner produces Lipitor, a