INTRODUCTION
STUDY GOAL AND OBJECTIVES
This report describes and discusses the strategies for sustained growth and
market expansion that are being employed by participants in the U.S.
prescription (ethical) drug market as the market faces various challenges. The
U.S. pharmaceutical industry-driven by scientific and technological advances,
new drug discoveries, advances in therapeutic knowledge and changes in
government and regulatory controls-is very successful with annual sales in 2003
sales projected to reach $243 billion. However, the accelerating cost of medical
care and, in particular, the escalating cost of drugs (particularly to the
elderly) has the drug industry under attack. In addition, other factors are at
work to limit market growth. Among these are: increasing competition
(particularly from the generic drug industry), patent expirations, the impact
from HMOs, hospitals and Medicaid in deciding what drugs can be prescribed and
the non-compliance of patients to drug regimens. In this report BCC provides
information on the strategic market actions employed by ethical (prescription)
drug companies to maintain and expand their product lines. The report also
describes the pharmaceutical industry and the performance of major sectors
within the industry. Within the goals of this study, BCC will provide detailed
information on the results of the various strategies and an analysis of each,
with particular emphasis on how these will impact on the current and future
status of the pharmaceutical market through the year 2008.
REASONS FOR DOING THE STUDY
BCC undertook this study to examine the certain factors that are at work to
limit market growth in the pharmaceutical industry and the marketing strategies
and tactics employed by the drug industry to extend and expand their markets. The
report provides information and analysis on:
- The ethical drug industry including description of the performance of
major sectors of the total drug industry
- Increasing competition
- Patent expirations and patent extension activities
- The impact of formularies in deciding which drugs are prescribed
- Strategic market actions employed by pharmaceutical companies to expand
their market segments
- Product expanded applications
- Life cycle management
- Prescription to OTC switches and branded generics
- "Off-label" use of drugs
- Advertising strategies, including pre-approval advertising and direct to
consumer (DTC) advertising
- Internet detailing
- Mail order marketing
- Pricing practices
CONTRIBUTIONS OF THE STUDY AND FOR WHOM
This report should prove of particular value to both pharmaceutical marketing
participants and observers, as well as to investors and venture capitalists,
since it provides details on the United States pharmaceutical market. Such
details include data on market size by major sector structure and dynamics of
the industry, expansion and changes in traditional market strategies, and new
marketing concepts and trends.
SCOPE AND FORMAT
In preparation of this report, the entire pharmaceutical industry was
examined, with particular emphasis on those drug companies that are employing
innovative marketing strategies to be the market leaders of the next century. The
U.S. drug industry is segmented into ethical (prescription) and over-the-counter
drugs in both the branded and generic forms. This report attempts to discuss all
areas of the market and to identify significant suppliers, end markets and
government and regulatory agencies. Participating companies will be discussed
regarding relative market share, marketing strengths, participation in new
segments and innovative marketing practices.
METHODOLOGY
Data for this study were collected using both primary and secondary data
research techniques. A literature search of BCC's extensive library, as well as
pharmaceutical, medical and business libraries was conducted. Extensive
interviews with industry personnel, professional and trade organizations,
government agency personnel, observers, scientists and industry professionals
were conducted. Data collected were analyzed by BCC personnel to determine
specific findings and forecasts. Once these forecasts were obtained they were
validated with industry experts; consequently, all estimates provided in this
report represent a consensus of BCC personnel, industry participants and
industry observers. Since some segments of this report are not routinely
measured, BCC derived estimates from a variety of analogous sources. Whenever
market estimates are derived they are fully noted. All dollar amounts are
expressed in constant 2003 U.S. dollars.
INFORMATION SOURCES
Information contained in this report includes data obtained from government
agencies, corporate publications and findings from industry trade associations.
Other information sources were interviews with industry personnel, corporations,
government and professional agencies and trade associations. Further information
was obtained through our extensive literature search. | 
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