The Global Pharmaceutical Industry and Developing New Drugs

Abstract

The pharmaceutical industry is highly capital-intensive and research-intensive. Firms in this industry depend significantly on the pipeline of new drugs, which secure patents with a potential for high returns and profits on best selling drugs can be substantial. With its extensive R&D of new drugs, the pharmaceutical industry has contributed significantly to improving the length and quality of life (Schweitzer 1997). The pharmaceutical research is a high risk/high reward environment, in which, large MNCs dominate the industry (OECD 2001). Thus, priority-setting by large MNCs determines the direction of pharmaceutical research.