Biotechnology Industry Analysis Essay

1129 Words Oct 12th, 2011 5 Pages
Biotechnology industry Analysis
BACKGROUND
The health care industry Provides health products and service which involved the leading technology of life science. It is a fast-growing industry and will continue to grow in the future because of the increasing request to the advanced medical care. The Global Industry Analysis (GIA,2009) predicted that the prescription drug market is value around $897 billion in world economy in 2015, and Asia-Pacific region is expected to have highest growth in prescription drugs.
The health care sector in Australia is one of the most advanced and sophisticated industry in the world. Numerous world leading healthcare companies are located in Australia. According to the Government Department of Innovation,
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However, the huge investment on the R&D does not mean it can achieve a appreciable return easily. The government regulators such as TGA and FDA have a high standard of the therapeutic goods manufacture approval. Thus,there is a potential risk in the investment of new drug which can not reach the market because of the government regulation.

| | | | | | |COMMON | |SIZE |
| | |SCL | |COH | |SCL | |COH |
|Revenue | |4,187,554 | |726,010 | |100% | |100% |
|R&D | |325146 | |108935 | |8% | |15% |

2 Porter's Five Forces
*Buyer Power( HIGH to MEDIUM)
Health care products are usually used as a treatment to a specific disease or an improvement to health condition. Patients have to consume the particular drugs to relieve their symptom or be completely cured. Consumers have not many choices while they have the demands to the product. Thus, buyers have low power to influence the price. The producer can set a high price to cover the huge R&D costs and gain high profits. The annual report of the two company showed that the EBITDA of CSL and COH are 1350.3 million dollars and 236.6 million dollars in June 2011.

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