Case Background
The case study titled “Pfizer and the Challenges of the Pharmaceutical Industry” focuses on the global pharmaceuticals market and the challenges faced by the company Pfizer. Challenges such as declining worldwide average returns on investment and rising R&D expenses were affecting the whole pharmaceutical business (Kratochvil & Nell, 2019). The business also had to contend with a heightened level of competition from businesses in related industries and new markets. The CEO of Pfizer needed to decide if these modifications represented a sea change for the entire sector.
Prescription medications were responsible for half of the company’s overall revenues. Pfizer’s aim and objectives were to provide leading-edge research and development throughout all of its operational segments, from product development to the patient’s treatment stage, encompassing the entire product life cycle. With the acquisition of several biotechnology companies, Pfizer also became heavily involved in the field.
Possible Solutions
Evidently, the company had to find a way to reduce the cost of the R&D process. Due to the nature of this industry, each new medication must undergo a thorough process of development and study before it is deemed safe and can be sold to consumers. It takes approximately ten to fifteen years to develop a new medicine, encompassing pre-clinical testing, manufacturing, and research and development (Kratochvil & Nell, 2019). The corporation has already invested a significant amount of time, money, and resources before it is offered to the market as a safe drug. The investment company will have already suffered millions of dollars in losses when the drug must be pulled off the market due to safety concerns. However, this does not imply that every time it produces drugs, it loses money.
Additionally, millions, if not billions, of dollars are generated by investment returns. One way to combat this issue is to partner with government agencies that sponsor the development of medications critical for improving community health. Another approach is to utilize technology to expedite the drug testing process. Another issue the company has to overcome is the prescription of generic drugs, which are less costly and do not contribute to Pfizer’s profits. Since this is how Pfizer generates the majority of its revenue from drug sales, the company had to maintain its campaign to persuade doctors to recommend branded medications to their patients. Additionally, Pfizer has started advertising and marketing its medications online.
Recommendations
Pfizer will continue to recover the losses and restore the lead in the pharmaceutical sector by focusing on technological improvement and continuing the changes in R&D. Although there is still competition in this market, this company will continue to recoup and hold the top spot by focusing on serving and giving health through the release of new medications.
However, by maintaining their cutting-edge approach to R&D and the high operating costs, the company’s objective of boosting profitability may be hampered. Although it may impact profitability, the mission of serving humanity must remain. Additionally, by continuing to invest in brand marketing, the company will be able to increase profits, as consumers will be convinced to purchase medications made by Pfizer rather than generic ones.
Expected Outcomes
Based on the information from the case study, Pfizer should be able to maintain its profitability while also providing the population with affordable medications. Additionally, the development of technology and the ability to retain profits will help Pfizer reduce the costs of medications in the future. Thus, focusing on increasing brand awareness and reducing the time and resources needed to produce medicines will help this company achieve better profits and provide people with accessible medications.
Reference
Kratochvil, R., & Nell, P. C. (2019). Pfizer and the challenges of the global pharmaceutical industry 2019 – A. Harvard Business Review.