Emerging Business Models in the Pharmaceutical Industries ...

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Growth in Semi Block Busters Even if the block buster model is declining, the Big Pharmas are relying on a few drugs for high revenues. Pfizer is one of the four companies with one or more potential block busters in the pipeline. It is working on three formulations to treat neuropathic pain and hypertension - Inspra, Caduet and Pregabalin. These are expected to bring in combined sales of more than $4 billion by 2008. Potential Blockbuster Estimated 2008 Company Drug(s) Sales ($ mil) Astrazeneca Exanta 972 Aventis Genasense 937 Bristol-Myers Squibb Erbitux 804 Eli Lilly Cymbalta 987 GlaxoSmithkline Bonviva 700 Novartis Prexige 784 Pfizer Inspra, Caduet, Pregabalin, Indiplon 5,463 Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 34
Short Term Strategies – Pre- and Post-Patent Based Generic vs. Patent Competition Patent based Pharma companies are looking for ways to lengthen the revenue streams of their products, and face the threat on their revenues from a new breed of generic companies. Companies are switching patients to next generation drugs to balance the drop in revenues due to generic replacements. Public, political, and regulatory changes in generic planning are further factors in the generic-ethical drug fight. Growth in the Generic Market The generics industry is experiencing unprecedented growth. Nine of the top 10 fastest growing pharma companies are generic and have a growth rate of over 12%. Of the 10,375 drugs listed in the FDA’s Orange Book, 7,602 have generic counterparts. Generics companies are capitalising on patent expiry opportunities offered by year 2005 on drugs with revenues of $100 billion. Many are evolving into fullyfledged, R&D-based, pharmaceutical companies. The Big Pharmas are also concerned about Medicare support to generic drugs. “Without an authorised generic product, a generic firm with 180-day exclusivity could reap a 1,000 percent ROI. With an authorised generic product on the market, the ROI declines by about half to approximately 500 percent. Reducing Gaps in Generic and Patent Oriented Companies With Big Pharmas companies like Novartis, Abbott Laboratories, and Merck resorting to more branded generic products, the gap between generic and patented drugs will be reduced. The big players will acquire generic companies to replace their original product lines, and offset their losses by replacing the generic product with a better priced, more innovative and effective formulation drug. The generics market was recently affected by the failure of R&D molecules in advanced stages of development by Ranbaxy and Dr Reddy's Laboratories, increasing competition, price erosion in generic drugs in international markets, and comparatively rich stock market valuations. Several generic drug companies like Watson Pharmaceuticals, Barr Pharmaceuticals, Ranbaxy, and Dr. Reddy’s are now developing patented medicines. Brand Equalisation Pharma companies are engaging in brand equalisation to reach a larger number of people through pharmacies. They are offering higher incentives to pharmacists to overcome competition from generic drugs. Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 35
Page 1 and 2: Emerging Business Models in the Pha
Page 3 and 4: Table of Contents Introduction…
Page 5 and 6: Acronyms Big Pharmas The top global
Page 7 and 8: Introduction Pharma Industry Overvi
Page 9 and 10: Market Segmentation Getting Blurred
Page 11 and 12: Growth in the Pharma Market The pha
Page 13 and 14: Factors Restraining Pharma Market R
Page 16 and 17: Geographic Overview Introduction No
Page 18 and 19: Trends in the Pharma Industry Short
Page 20 and 21: Long Term Strategies - Forward Inte
Page 22 and 23: Long Term Strategies - Targeted Tre
Page 24 and 25: Long Term Strategies - Biotech and
Page 26 and 27: Long Term Strategies - Biotech and
Page 28 and 29: Overview of the Network Model The n
Page 30 and 31: Outsourcing The network approach al
Page 32 and 33: Many of BMS's key drugs are from ot
Page 36 and 37: Short Term Strategies - Pre- and Po
Page 38 and 39: Short Term Strategies Against Paral
Page 40 and 41: There are two main types of M&Q act
Page 42 and 43: The Revenue Model The market dynami
Page 44 and 45: Short Term and Mid Term Strategies
Page 46 and 47: Top 10 Pharma Companies - Major Mar
Page 48 and 49: Benchmarking - Top 20 Drugs by Sale
Page 50 and 51: Benchmarking by Percentage Growth i
Page 52 and 53: Benchmarking by Geographic Revenue
Page 54 and 55: Rank 1 2 3 4 5 JnJ GSK Company Pfiz
Page 56 and 57: Altace® Biaxin® Zofran® Brands A
Page 58 and 59: Introduction Pfizer is the world's
Page 60 and 61: Introduction GlaxoSmithKline (GSK)
Page 62 and 63: Introduction Merck & Co. develops,
Page 64 and 65: Introduction Aventis’ core busine
Page 66 and 67: Introduction Bristol-Myers Squibb C
Page 68 and 69: Strategic Direction The company aim
Page 70 and 71: Strategic Direction JnJ has been fo
Page 72 and 73: 15% Percentage Revenues by Segment
Page 74 and 75: 12 10 8 6 4 2 0 The Americas Revenu
Page 76 and 77: 20 15 10 5 0 Novartis revenues by S
Page 78 and 79: Strategic Direction Eli Lilly focus
Page 80 and 81: New Revenue Models New revenue mode
Page 82: Contact Us For more information on

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