Question

Discuss the structure, conduct and performance of the pharmaceutical industry. How does its structure, conduct and performance impact patients? Given the structure, conduct and performance of the pharmaceutical industry, predict the responsiveness of the industry to a common disease as compared to a very rare disease. Assume both diseases have very similar impacts on patients.

Answer 1

The Health sector of a country holds paramount importance in the development and well-being of not only the physical and mental state of its citizens, but also holds key importance in the overall development of the other sectors of the economy. The Pharmaceutical industry holds both economic and social importance. The general people and the Government usually hold a very critical view about the pharmaceutical industry on the backdrop of its huge potential for far reaching economic returns. The structure of the Pharmaceutical industry is more or less like an oligopolistic natured sector due to its high profit nature and the huge price variation it holds in the market. This industry has a very high concentration ration due to the heavy differentiation of the products and negatively existing competition at the level of prices that this industry operates. Critics have been of the view that such high and illogical pricing has resulted in unethical product marketing and the sale of even unsafe and ineffective medicines in the market. The direct result of such sales has been harmful towards the health of the general people. The pharmaceutical industry operates under various heads such as its research and development wing, profit and pricing wing, the wing that indulges in the promotion of the medicines, and the wing that finally faces the people in the form of the local stores. All these wings have their specific roles, which operate in their designated jurisdiction. However, the Government has had to put in very hard regulations owing to the nature of these pharmaceutical wings indulging in the exploitation of their roles and cheating the common people in the Liew of providing them easily accessible medicines which are richer in quality. The pharmaceutical industry has now evolved to a state where in the name of proving new and better medicines, the firms are charging steeper and steeper prices for the very cheap medicines by adding their brand names to the products. Various studies conducted have reveled the nature of this industry turning in to more of a profit-making business and completely ignoring the health and economic aspect and perspective of the common people.

The Pharmaceutical industry is the backbone of the health sector in an economy. However, this industry has now turned in to the absorbers of money in the lieu of providing better and faster accessible medicines to the common people. The nature of this industry can be better realized when we take the instance of a potentially rare disease breakout in region. Common diseases are now being made to appear like a big issue so that more and more money can be taken out of the patients b y charging them huge amount of money for those solutions which are not very costly. In contrast to the nature of the industry towards the common diseases, in the case of a rare disease (even if they both have similar effect on the health of the people) is much different and a rare disease is taken up by this industry as an opportunity to pull out more money from the customers. The Pharmaceutical industry would make the rare disease appear like life threatening even if it is not. This indulges in to a sense of fear among the people, and they are ready to pay higher and higher prices for the medicines which they are told to be of the richest quality when they are ready to pay high prices for those so-called rich medicines. The really could be far from that. The medicines sold in the name of rich and high-quality drugs could actually be made out of the similar solutions, just different in certain compositions, and could cost almost similar and cheap to the medicine manufacturers. However, the industry pushes in these medicines in the name of brand companies and thereby charging tall prices for such products. The general people, only with the mindset of curing faster and getting back to healthy life, are ready to pay any cost demanded for these medicines. This nature of the pharmaceutical industry has led to the governments across the countries to put up stringent regulations on the marketing and selling of the products. However, this being the deer need of the people, the governments have not been much successful in curbing the high price charging nature of the pharmaceutical firms.