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Evaluation of the Pharmaceutical Market

May 2nd, 2016 - 0 Comments

Evaluation of the Pharmaceutical Market

Many models, templates or tools were made by the pundits to cater to the industries who want to assess their product or the market. Most of these are still used even though the market scenario has witnessed a paradigm shift. In this report, we shall evaluate the feasibility of these parameters with respect to the pharmaceutical and healthcare industry which has different dynamics as compared to other industries. We shall also look at some of the examples of such market analysis models and the changes that need to be made to make them relevant to the pharmaceutical and healthcare industry.

As the equations of consumerism, technology and market dynamics have changed in recent years, this has called for a transformation in the attitude and beliefs of the modern pharmaceutical companies with respect to all those activities that ultimately influence sales. Critical thinking is a process where we get rid of the defined and accepted models or templates and create new sets of ideas. It is the generation of tailor-made parameters or key factors which are particular and relevant to individual products. Therefore critical thinking needs to be developed to address the needs of the ever-changing environment.

Here are examples of three widely used market/product analysis models with some recommended modifications:

5 Ps of marketing

Due to the economic slowdown and healthcare burden even in the developed countries, it is not the ‘price’ but the ‘price-effectiveness’ of the pharmaceutical product that matters. Mere improvement in QALY is not sufficient to price the drug but the incremental benefit should also justify the cost associated with the product. The recent examples can be numerous considering the judgments of NICE and IQWIG which are the cost assessment bodies of UK and Germany respectively.

The other ‘p’ which should definitely be included is the ‘payers’. With the recent upheaval over the pricing related to expensive drugs such as Sovaldi, many payers are now shifting to other cheaper therapies which might not be as effective as the heavily priced drug. They are also providing drugs to a certain segment of the patients, for example, offering the drug to the acute patients even though it is also approved for moderately ill patients. This leaves a big gap on the number of patients eligible to receive the drug and also on the balance sheet of the company.

5 Ps

Boston Matrix

The model which classifies the drug on the basis of market share and growth does not fit for the segment that is called ‘Rare disease’. It is a segment which has a low market growth but even acquiring a small number of patients in the segment can be a game changer for the company (due to the price of the drug being very high). It also does not realize the fact that ‘generics’ which have high market share in fast growing markets aren’t always the most profitable.



Since every major economy is bracing itself for economic slowdown. The ‘economic’ factor in PESTEL holds no good for comparing different scenarios. Instead of that, ‘Health Economics’ should be used to assess the situation of the market as it also encompasses the healthcare system of the country along with the factors responsible for afflicting diseases in the particular region.

Therefore, the emergence of non-clinical stakeholders and changing regulatory perspective has changed the parameters which were once used to determine the pharmaceutical scenario of the region. Yet it does not mean that all these models should be deemed obsolete, it simply means that they need to be adapted with time and according to the products domain.


Personalization of plans and strategies for individual product or region is the need of the hour. Setting up of new factors by getting rid of the so called “checklists” is necessary for the growth of the product as well as of the organization.

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