Drug Utilization Plateau
Understanding why the U.S. pharmaceutical market has stagnated and
what you can do to avoid the slow-growth trap.
Structural Changes in Pharmaceutical Utilization
"The 1990s are understandably thought of as a golden age in the U.S. pharmaceutical industry. The average number of new molecular entities approved each year was one-third higher than in the 2000s (31.1 versus 23.3),
The majority of these drugs were in mass-market, primary care segments that resulted in blockbuster sales, and marketing regulations, particularly on direct-to-consumer advertising, were substantially relaxed. Best of all, between 1995 and 2000 sales growth averaged 14% annually and approximately 80% of this increase was driven by non-price factors (e.g. volume, displacement of older for newer therapeutics, etc.).
After the year 2000, there has been changes in medicine and changes in the cultural acceptance of drugs.
In short, while the U.S. population is consuming more pharmaceuticals, the rate of increase has slowed dramatically in recent years."
Why has prescription drug use leveled off? There has been a major cultural shift in the use of prescription drugs. People are not following the regimen dictated by their Doctors. The Doctors can not get the patients to comply with their prescription orders. It is easier to prescribe new prescriptions but there is a challenge for compliance and adherence to the drug protocol. Patients don't listen to their Doctors.
Drug Therapy is not growing so how do we satisfy our shareholders?
You must focus on quickly marketing the drug instead of creating the best drug. Timing is everything. The best or most effective drug will never be profitable so don't put money into investing in a drug unless it is the first or second on the market. However, if the drug is the second drug on the market, make sure it is a good drug or you will not recoup your investment.
We must push the FDA in speeding clinical trials. We must encourage faster approval of drugs.
Invest in adherance programs. How can we encourage the patient to "Follow Doctors Orders?" (Technology will provide the needed compliance and adherance to promote growth in the Pharmacutical industry.)
A Guide to the International Pharmaceutical Industry Author: Todd D. Clark Research: Shannon Torley Sales & Marketing: D. Scott Clark