Emerging Business Models in the Pharmaceutical Industries ...

Benchmarking by Percentage Growth in Operating Margins
Reduction in Operating Margins
Bristol has achieved the highest growth in operating
margin while Pfizer has lost significantly, mainly due to
reduced R&D productivity. Pharma companies are
mainly focussing on reducing their cost by 13 to 14%
through various strategies including network R&D
models, sales force effectiveness, and reduce budget
and base them on profit centres.
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
Percentage Growth in Operating Margins
BMS
Source: JSB Intelligence
1
Pharma Cost
During 2003, the pharma industry cost structure was
constituted of R&D (25-30% of the total cost), manufacturing
(25-35%), administration (10%), and marketing (25%). In the
new pharma model, better techniques and financial
frameworks are being executed to optimise spending on each
of these divisions. The profit to the expense ratio for each
division is calculated and the expenditure budget set
accordingly for each division.
GSK
Astra Zeneca
Strategic Analysis of the Pharma Market, Future Revenue Models and Key Players 50
J&J
Aventis
Mercks
Eli Lilly
Novartis
Wyeth
Pfizer