Biomedical Engineering Reference
In-Depth Information
Innovation
Marketing
Fig. 1.1
Innovation and marketing in pharmaceutical industry
differentiation potential decrease, with deteriorating margins as a consequence.
It will succumb under price competition with generic drug fi rms and may, ultimately,
be forced to merge with or be acquired by another company. A fi rm without strong
marketing capabilities will not fully unlock the value of innovation and thus it stands
to miss out on billions of dollars for its stakeholders and on the resources needed to
sustain continued innovation. The graveyard of former pharmaceutical fi rms is lit-
tered with once-mighty corporate brands, such as American Home Products,
Pharmacia, and Wyeth, that mismanaged either their innovation or marketing, or
both. Firms that are strong in both innovation and marketing have successfully navi-
gated the challenges and will continue to create value for their stakeholders (Fig.
1.1
).
1.1
The Specifi city of Innovation and Marketing
in the Pharmaceutical Industry
Innovation and marketing in the pharmaceutical industry are not run-of-the-mill
processes and challenges that an outsider to the industry can immediately grasp. To
explain these complex processes, we discuss below the very specifi c nature and
characteristics of innovation and marketing in the pharmaceutical industry.
1.1.1
Innovation
Innovation in the pharmaceutical industry has three characteristics:
live or die
,
large
in size
, and
fi nite lifespan
. A considerably large percentage of the profi t of a typical
branded pharmaceutical fi rm comes from drugs under patent protection.
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