Biotechnology firms focus on discovery, research, and development of specialty drugs to treat chronic life threatening diseases. The drugs are designed to treat chronic and complex diseases that have been hard to manage or untreatable in the past. Biotechnology firms use bioengineering to develop drugs to perform specific tasks, whereas traditional pharmaceutical firms discovered small molecules that could be used as drugs. The small molecules were not necessarily well- targeted for specific conditions, so there could be good as well as bad associated with the drugs. The biotechnology industry is currently in the growth stage of the industry life cycle. Some pharmaceutical companies started as biotechnology firms, and other pharmaceutical
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Industry participants compete on research and development. The firm that moves from the discovery phase, to the testing phase, to the approval phase the quickest will likely have advantage over its competitors. Competition may also be based on which drug has the least side effect profile or which drug is more convenient for patient compliance. Once drugs are on the market competition can be based on price if there is not product differentiation. Some companies may start off with a differentiation advantage, since their drug offers a unique advantage over other drugs. Industry participants compete to gain market advantage, by marketing their drugs through advertising to the general population. They also market to physicians, pharmacies and hospitals through pharmaceutical sales calls. The pharmaceutical representatives try to provide information on the new drug and encourage the use of the new drug by making these sales calls. Another way they compete with each other is by trying to be included on large national drug formularies. They negotiate coverage of their drug with the insurance companies, pharmacy benefit manger (PBM) administrators, and specialty pharmacies. There are always winners and losers in this part of the competition since it is unlikely that every formulary will include every drug. This is the part of the competition …show more content…
Technology like gene mapping and bioengineering have led to new discoveries that have helped shape the biotech pharmaceutical industry. Venture capital was highly available for biotech firms in the 1990s and early 2000s. Biotechnology organizations were able to work on early-stage activities of drug development, which traditional pharmaceutical companies had retreated from. Some biotech firms moved into the pharmaceutical industry, and others were part of mergers with incumbent firms or part of acquisitions by incumbent firms. Mergers and acquisitions are at unprecedented levels. ( Kench & Hoyer). Biotechnology companies with FDA approval experience are being acquired at a rate ten-times higher than the new entries. (Kench &
Industry participants compete on research and development. The firm that moves from the discovery phase, to the testing phase, to the approval phase the quickest will likely have advantage over its competitors. Competition may also be based on which drug has the least side effect profile or which drug is more convenient for patient compliance. Once drugs are on the market competition can be based on price if there is not product differentiation. Some companies may start off with a differentiation advantage, since their drug offers a unique advantage over other drugs. Industry participants compete to gain market advantage, by marketing their drugs through advertising to the general population. They also market to physicians, pharmacies and hospitals through pharmaceutical sales calls. The pharmaceutical representatives try to provide information on the new drug and encourage the use of the new drug by making these sales calls. Another way they compete with each other is by trying to be included on large national drug formularies. They negotiate coverage of their drug with the insurance companies, pharmacy benefit manger (PBM) administrators, and specialty pharmacies. There are always winners and losers in this part of the competition since it is unlikely that every formulary will include every drug. This is the part of the competition …show more content…
Technology like gene mapping and bioengineering have led to new discoveries that have helped shape the biotech pharmaceutical industry. Venture capital was highly available for biotech firms in the 1990s and early 2000s. Biotechnology organizations were able to work on early-stage activities of drug development, which traditional pharmaceutical companies had retreated from. Some biotech firms moved into the pharmaceutical industry, and others were part of mergers with incumbent firms or part of acquisitions by incumbent firms. Mergers and acquisitions are at unprecedented levels. ( Kench & Hoyer). Biotechnology companies with FDA approval experience are being acquired at a rate ten-times higher than the new entries. (Kench &