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The global pharmaceutical industry and astrazeneca

Introduction and Need for Research

This study protects the global pharmaceutical industry in general plus more specifically AstraZeneca, which is in a phase of restructuring and putting into action operational issues. Although pharmaceutical industry persisted to grow through 2009, however the depressed stock markets reduced the marketplace capitalization of companies on the market. The pharmaceutical industry encounters lots of problems including regulations and price control. At exactly the same time, lots of governments, including that of the united states, are contemplating far reaching reforms which could present an chance to the industry. Thus, in a sense the industry reaches the cross highways having consolidated its position in a number of respects, but also facing lots of new challenges, as new opportunities start for the industry. (booz&co, 2009)

AstraZeneca, being one of the greatest pharmaceutical companies on the planet with a worldwide presence is also damaged by the various environmental changes. Additionally, AstraZeneca has been burdened with overcapacity in creation and product development and has been under great pressure to downsize and make structural changes (Rosen, 2008). The company has been on a spree of downsizing its jobs that has afflicted 3, 000, job losses at its home country itself. The obstacles faced by AstraZeneca also include its slow stream of new products on which it could have further enhanced its development and also its various attractive patents achieving expiry within the next five years. On top of that, AstraZeneca has been looking for partners and buying out both R & D features as well as widening its marketing work. It collaborates with labs like Palatin Systems and Arrow Therapeutics in a bet to boost its R & D and get more products on the market.

One particular move that AstraZeneca has made is to grow its creation and marketing procedures to emerging marketplaces especially in the centre East. It has set up production units in your community as well as initiated its programs of productive collaboration with local governmental and non-governmental health care units.

The current research therefore aspires to assess the potency of AstraZeneca's online marketing strategy for the Middle East. For achieving this, the first step that the study undertakes is to collect data regarding the implemented strategy of AstraZeneca, its current and future ideas for the spot. Next, the research carries a critical examination of the marketing strategy of AstraZeneca with a particular mention of the political, interpersonal, financial and legal environment of the region. For this, a PESTEL research will be conducted for AstraZeneca in the framework of the Middle Eastern region. Below I present the actual to make contribution from the research analysis.

The Midsection Eastern region is a profitable area for pharmaceutical organizations because of the growth in the population of the region as well as increasing acceptance of the Western medicines. The financial development of the spot too has made it a rewarding place for business to sell their products, including pharmaceuticals. Also, the spot is poised to become hub for health tourism where both doctors and the patients get together for consultations and other health services (Saliba, 2000). They are some of the factors that make the center East a stunning market, where overseas pharmaceutical companies may benefit. However, there are also certain thrust factors that lead these companies to develop to newer marketplaces. Included in these are exhaustion of market, severe competition, high costs of processing and distribution etc (Elizabeth, 2009).

It can be seen from the above that the Middle East market is not only attractive for the pharmaceutical companies, but additionally it is a necessary to allow them to expand if indeed they want to continue to remain practical and profitable. While, pharmaceutical organizations want for tactical partnerships in developing as well as marketing in diverse regions of the entire world like the Middle East, they starting most of their decisions on the option of a potential market and consumers. A recently available study by Marc-Andre Gagnon and Joel Lexchin shows that the development in the pharmaceutical industry is market motivated alternatively than research-driven, a finding that problems existing perceptions (Knowledge Daily, 2008). While this is an excellent approach, additionally it is essential that factors apart from market potential be also assessed before making assets in newer market segments. There's a need to comprehend the social and political aspects of those parts as well as these aspects play an essential role in to what degree the international organizations, and especially the pharmaceutical organizations, are able to establish themselves. The existing research expects to fulfill this need. It will lead toan knowledge of major drivers of growth and change in the pharmaceutical industry specific to the center Eastern region plus their strategies and obstacles they face there.

The current research also aims to offer an objective point of view on the marketing strategies of AstraZeneca in the centre East. By analyzing the strengths and weaknesses of the strategic marketing plan of AstraZeneca, the study expects to reveal what works best for the pharmaceutical companies in the context of the center East region.

This research is expected to lead to a development of knowledge of the center East business scene as well as the potential customers for the pharmaceutical industry in your community.

Literature Review

The current research has included a review of available literature on the global pharmaceutical industry and the Middle Eastern pharmaceutical industry in particular. The review of the industry is essential to comprehend why international pharmaceutical companies may choose to expand to the Middle East. Next, the possible known reasons for the rapid growth of the industry worldwide because of the incident of newer diseases, newer remedies with existing medications and enhanced reliance of the people of prescription drugs is discussed. This gives a backdrop for understanding the fundamental needs and explanations why people purchase pharmaceuticals, and hence is likely to help in suggesting suited strategies. The literature review also includes an exhaustive review of the political, economical, legal and socio-cultural environment of the Middle East. This allows the researcher in conducting a PEST evaluation on the strategies utilized by AstraZeneca and to make suitable recommendations for it to become market leader in the centre East.

Research Questions and Objectives

Based on these presentation, the key research questions are:

What are the drivers that make the Middle East Region appealing to the pharmaceutical companies?

What will be the barriers to conducting business that pharmaceutical companies face in the Middle East?

Are the marketing strategies used by AstraZeneca in portion the Middle Eastern Market sufficient to supply the business with a stronghold in the regional market?

In order to handle these research aims, my research goals are:

To evaluate the Politics, Economic, Socio-Cultural, Technological and Legal Environment of the center East.

To examine the appropriateness of the existing strategies of AstraZeneca for the region

To make suggestions for improving the strategies.

Research Methods

The research uses both secondary as well as principal sources of data. The supplementary sources will include an assessment of books on the marketing strategies, especially for the pharmaceutical industry and can also elaborate upon the socio-cultural implications of the regional marketing strategies. It'll expand upon the general business environment in the centre East, and about the culture and consumer tendencies in the region.

The most important data is based on review and interviews of varied officers of AstraZeneca, as well as doctors and consumers (Drug Stores, Stockiest, etc. ) of pharma products from the center East. These survey responses are directed to provide data on the marketing strategies utilized by the company in the centre East and to point out the issues that the company faces in your community.

Limitations of the Research

The current research is limited in scope as it covers the area of the center East and evaluate the marketing strategies of 1 pharmaceutical company; AstraZeneca. The potency of the ONLINE MARKETING STRATEGY of AstraZeneca is usually to be examined using the PEST analysis for the center Eastern framework, and insights attracted from here are used to make suggestions to AstraZeneca and other pharmaceutical organizations that plan to do business in your community. This limited use of one organization, in one context may well not be well suited for making recommendations on the whole as diverse organizations have their own pieces of resources and techniques.

Next limitation is the fact that the research is conducted utilizing a limited volume of respondents. The research includes interviews of employees of AstraZeneca, consumers (Medicine Stores, Stockiest, etc. ) and doctors. Overall the interviews are limited by 15 in number with 3 employees from AstraZeneca, 9 consumers and 3 doctors. Still, this will provide basis for even more, much exhaustive research with a larger volume of respondents included in future. However, in the lack of reliable information on this matter, within these constraints the study makes useful contribution.

Dissertation Structure

The dissertation is divided into 6 chapters. The next chapter contains a brief history and track record of AstraZeneca. This will help in developing an understanding of the online marketing strategy of the organization and will be used in conjunction with the interview replies of the employees of AstraZeneca.

Chapter 2 provides the literature review. This includes a review and critical overview of literature about the drivers of expansion in the pharmaceutical industry. It will provide an overview of the Middle Eastern region and it's political, economical

Chapter 3 reveals the research methodology adopted because of this analysis. This chapter covers the study methods, research tool, data collection and data evaluation methods and also elaborates after the tools like PEST analysis that are used in the study.

Chapter 4 records the research results followed by Section 5 of analysis and discussion of the study conclusions. The dissertation concludes with the last chapter, that provides conclusions and advice for AstraZeneca and the pharmaceutical companies generally speaking about marketing in the Middle East

Summary

This chapter elaborated upon the explanation for the research and set the ground for the research questions and formulated the research goals. The chapter also discussed briefly about the study methodology which will be further extended in Section 3. Finally the chapter presented the structure of the dissertation for easy understanding, and thus this chapter operates as a preview to the complete dissertation. Another chapter talks about the available books and presents an assessment of various subject areas related to the current research.

Chapter 2 Literature Review

Introduction

The current section includes a literature review and begins with an overview of AstraZeneca and proceeds to delve on matters like the global and the center Eastern pharmaceutical industry. This gives the reader with a record about the existing situation and competition on the market. It also discusses the various drivers of growth of pharmaceutical industry which provides the researcher with the knowledge of the value of pharmaceutical companies expansion in newer parts like the Middle East. After that it proceeds to highlight the specific economic, political, and cultural, management and legalities specific to the Middle East. Finally, the literature review concludes with a conversation on Marketing strategies and their utility in different situations and regions. The insights gained through the literature review helped the researcher in expanding the questionnaire with suited questions that might be used for answering the study questions.

AstraZeneca - Company Background

AstraZeneca was created in the entire year 1999 by the merger of two pharmaceutical giants- Astra AB of Sweden and Zeneca Group PLC of the UK (AstraZeneca, 2010). AstraZeneca is one of the leading pharmaceutical companies on the planet with the reported sales of 32 billion in the entire year 2008. With the organization office in London, AstraZeneca has a global presence in over hundred countries. It does the majority of its research and development activities in Sweden, the UK, the USA and 5 other countries across the world. AstraZeneca does its production in 18 countries throughout the world through its 26 processing items. Its numerous products land in essence into six categories - cardiovascular medications, gastrointestinal, disease, neuroscience, oncology and respiratory (AstraZeneca, 2010). The business also manufactures popular brands of medications like the Arimidex, Crestor, Nexium, Seroquel and Symbicort (AstraZeneca, 2010). AstraZeneca utilizes over 65, 000 people in its various R & D and developing units worldwide. AstraZeneca is also among the best traders in research and development and it is acknowledged with an investment of over 5 billion dollars in 2008 and employs over 12, 000 people in its R & D devices (AstraZeneca, 2010).

AstraZeneca has a Global Marketing and Business Development group that looks after the marketing facet of the business as well as directs the professional medical studies (AstraZeneca, 2010). The Global Marketing and Business Development Group provides tactical market inputs that permit AstraZeneca in making appropriate investments in research projects and in specialized medical research that the clients may ultimately reap the benefits of. The business also companions and makes strategic alliances with other marketing companies across the globe to channel its marketing and sales functions (AstraZeneca, 2010).

In view of its long term plans for the center East, AstraZeneca moved its Middle Eastern local office from the UK to Dubai as the first rung on the ladder. AstraZeneca has relocated its local office in the center of Dubai's health care hub, at Dubai Healthcare City (Andersen, 2010). This move empowered AstraZeneca to position itself in a place where world class healthcare facilities are marketed, specialists and doctors of international repute consistent and patients from across the region come for special treatments. AstraZeneca together with Dubai Medical care city dreams to provide both patient education programs and specialists and paramedic educational program (Andersen, 2005). These programs are reflective of AstraZeneca's vision of aiding both the patients and the doctors in better analysis, better remedy and better follow-up of disorder.

AstraZeneca set up its first manufacturing facility in your community in Cairo to serve the Egyption market as well as the Middle Eastern countries (Gotensparre, 2006). The manufacturing unit in Cairo in addition has resulted in the increase of AstraZeneca jobs in the region and the move is in line with the future expansion plans of the business in the Middle East (Gotensparre, 2006).

Overview of the Pharmaceutical Industry

The global pharmaceutical industry is a period of restructuring and putting into action operational issues. The industry prolonged to develop through 2009, but the depressed stock markets reduced the market capitalization of companies on the market. The industry encounters lots of difficulties including laws and price control. At exactly the same time, lots of governments, including that of the US, are contemplating significant reforms that could present an possibility to the industry. Thus, in a way, the industry reaches the cross roads having consolidated its position in several respects, but also facing a number of new challenges as new opportunities open up for the industry (booz&co, 2009)

The pharmaceutical industry is also under a pressure to contain its costs in the US, European and japan markets. This makes it a practical option for the pharmaceutical organizations to test newer emerging market segments like the Middle Eastern that is believed at $8bn.

The Midsection East pharmaceutical market achieved $8bn progress in the entire year 2005. Combined Annual Development Rate (CAGR) of the Middle-Eastern pharmaceutical market between your years 1999 and 2003 was next to that of Southeast Asia and China.

The pharmaceutical market, like the majority of other market segments in the Middle-East, can be an import centered market. Most of the countries in the region transfer over 50% with their pharmaceutical products. For instance, Saudi Arabia imports 80% of its pharmaceutical products while Lebanon gets 94% from exterior. Israel and Jordan too import in large quantities at 60% and 70% respectively (Abderrahmane, 2009). The explanation for this import is basically the non-availability of production functions for the generics, as well as the high acceptance of branded American medicines. The common market is almost non-existent has countries in the Middle East rely greatly on the better quality of products that they import from the UK and the united states.

Regionally, Egypt supplies the greatest pharmaceutical market while Saudi Arabia is the major market in the Gulf region. UAE provides of being the highest-priced market segments in the region. Israel has one of the greatest generic medication companies of the world. These generics products are more competitively priced than the branded drugs and lead to a better market penetration predicated on their strategic prices (Thomas and Holden, 2002). Jordan, while importing the majority of its pharmaceutical products, is also on the list of most significant exporter of medications and other pharmaceutical products within the region (Business Insights, 2009). Jordan however generally repackages or functions as a conduit for import for the region.

There are several international pharmaceutical companies already functioning in the region, and especially from Egypt. A few of these include AstraZeneca, GlaxoSmithKline, Novartis, Eli Lilly, and Pfizer. These organizations have established their manufacturing units in Egypt and carry out circulation and marketing for the complete Middle East region. Many of these organizations work in close relationship with local dealers who are aware of the neighborhood market dynamics. A few of them maintain their multi-lingual websites to get customers from the neighborhood market (Business Insights, 2009). The marketing and production strategies adopted by the international brands generally is determined by their conception of what the market needs and customers require (Seldon and Colvin, 2003).

Drivers of Expansion in Pharmaceutical Industry

Increase in usage of prescription drugs

It has been seen that there surely is an increase in the intake of the prescription medications before few decades. The free availability of insurance is just one factor in increasing the intake of prescription drugs. Studies have discovered that increase in the true cost of the medicine to the buyer has little influence on its consumption. The purchase price elasticity of prescription medications is rather low and varies in the number of 0. 1 to 0. 2. This is not surprising as the utilization of prescription medications implies that they are required for the treating the public, and will thus still be utilized by the public for treatment as long as they are within the power of the public to be paid for.

The consequence though is volatility in the shelling out for prescription drugs with the global current economic climate having an impact on the spending on the prescription drugs by the public. For example, a report by Smith et al. (2006) discovered that private shelling out for drugs slowed up in 2004, along with slower health insurance growth. Drug spending declined in the case of all healthcare payers, including private insurance providers and open public health firms.

In preceding years, spending on prescription medications was buoyed by good monetary conditions with the pharmaceutical firms also driving a car the spending with the marketing of the products. Corresponding to Findlay (2001), spending on prescription drugs has been displaying a fast accelerating trend powered mainly by the marketing, campaign and adverts by pharmaceutical companies, specifically direct-to-consumer advertising (Neff and Sanders, 2004). According to Dietz (2004), shelling out for prescription medications tripled during the period 1993-2003. Price go up, particularly in the case of new drugs, accounted for 29% of the increase. Level of drugs purchased accounted for 74% upsurge in drug spending. Moreover, an aging world coupled with longer life spans, and higher shelling out for drugs to regulate chronic diseases donate to increased ingestion of prescription medications. This trend is expected to accentuate in the foreseeable future, resulting in much higher shelling out for prescription drug. (Dietz, 2004).

The above evaluation shows that the general trend in medication consumption is powered by factors such as insurance and provision of benefits. The spending on prescription medications is also directly affected by the quantity of promotion done by the industry (Rajadhyaksha, 2002). These styles show that pharmaceutical growth is directly related to utilization of drugs.

Impact of new diseases

Lichtenberg (2003) shows that the option of better drugs and a lot more drugs have led to a decrease in morality rate, showing a positive correlation between status of health insurance and quantity of drugs available. Moynihan, Heath and Henry (2002) go a step further in defining the role enjoyed by new diseases in the development of pharmaceutical industry. They allege that companies in this industry, in collusion with doctors and consumer organizations, actively engage in what they call 'Disease mongering'. They define disease mongering as increasing the boundaries of treatable diseases to add a lot more common conditions.

This requires the impact of new diseases on the growth and prospects of the pharmaceutical industry to the new aspect in that the industry not only advantages from actual event of new diseases but positively invents them to promote their own wellbeing. The study will also review this assertion and have a take on the viewpoints and claims of stakeholders concerning this development as a key driver in the development of the utilization of prescription drugs.

Pharmaceutical research, and moreover the intro of a fresh drug on the market, is both costly and high-risk. However, such research has been at the bottom of much improvement and interpersonal benefits. Studies have found that the social benefits associated with pharmaceutical research are definitely more than twice those of the private benefits (Kotler, 2004). Other studies have shown that the general public policy of government authorities and regulating regulators, including regulatory procedures, control buttons and patents, has a primary effect on the magnitude of research. Pharmaceutical companies have been found to put the best importance on patents. (Grabowski, 2002) High development anticipations fueled by past double digit development rates in the industry have obligated organizations in the pharmaceutical industry to constantly innovate (Trout, 2000). The market leaders in the industry are particularly susceptible to this pattern as they often have to go beyond expectations. These companies rely on "blockbuster drugs" - new drugs that generate annual revenues more than US $1 billion - to meet these targets (Kotler, 2003). With patent expirations and product maturity, many of the existing portfolios will probably lose their sheen as blockbusters and can have to be replaced with new ones in order to keep up the growth levels.

Middle East Political Economic Public and Technological Environment

Instability of the Region

Middle East offers a great opportunity for the international pharmaceutical organizations as it is predicted to be presently $8bn well worth and growing at an easy pace. However, there are several distinct issues associated with the politics and business environment of the spot that cause concern for those organizations that may aspire to become a part of the expansion of the pharmaceutical market in the Middle East. The primary matter is the belief of the spot to be instable in conditions of its politics and geo-political aspects (Saliba, 2000). The long drawn tensions between Israel and Arab state governments, the Iraq Battle, and the current embargo with Iran on the nuclear issue enhance the understanding of the region as unstable and may deter organizations from committing.

Intricate and Complex Business Regulations and Restrictions

Additionally, there are complex legal and specialized restrictions for executing business and marketing in the region and they are not always easily comprehended by the global businesses expecting to do business here. These protocols, paper-works and steps are even more complex in the case of pharmaceutical business (Rosenbloom, 1995). Organizations expecting to establish themselves in the Middle East, more often than not have to take local agent's helps to navigate through the extended registration operations as well as the marketing conditions that need to be satisfied.

Lack of Appropriate Intellectual Property Laws

The region also suffers from limited legislation safeguarding the Intellectual property privileges. As such, doing business and especially of the type of pharmaceutical products that are highly dependent on patent safeguard and IP laws and regulations, is considered to be dangerous in the region. Based on the Pharmaceutical Research and Manufacturers of America (PhRMA), having less adequate IP security led to the united states Pharmaceutical organizations dropping out over $555m in 2004 in the Middle East (Saliba, 2000).

The region has however risen to combat this issue and many countries have initiated reforms in their IP laws. This has also been influenced by the addition of several countries from the region in the WTO or the World Trade Business. For example, being a part of the World Trade Firm, Saudi Arabia also followed the Excursions (the Trade Related Areas of Intellectual Property Protection under the law contract). Jordan has amended its IP laws to indicate the changing needs of the present day times (Saliba, 2000).

Liberalization and Free Trade

The development of globalization and the desire to diversify in other sectors than the oil, has made many countries of the center East to adopt a liberal position towards foreign investment. This has been true in the case of the health care sector, which is being promoted rapidly in the Middle East a kind of tourism - medical tourism.

Middle East has liberalized inward purchases, allowing up to 100% international ownership in the healthcare sectors. In some countries, like Israel, liberalization has been enacted in the over the counter sector as well (Saliba, 2000). There were widespread investment funds in developing medical infrastructure to appeal to the expatriate people as well as to attract the health tourists from around the world. Examples of large assets in the sector is seen in the Ruler Fahad's Medical City, Riyadh, developed at the cost of $534m, and DuBiotech - a biotechnology playground developed in the UAE to appeal to specialist doctors. Countries have committed to cooperative health insurance and often managed to get mandatory for the expatriates, for example in UAE, to have the medical health insurance cover. (for additional information see, Saliba, 2000).

The past few years have seen an increase in the number of free trade contracts (FTAs). You will find FTA's of several Midsection Eastern countries with EU and the united states that provide opportunities for organizations from these locations to do profitable business in the centre East (Macklan and Knox, 2000).

Local Pharmaceutical Players

While the pharmaceutical market in the centre East is heavily dependent upon the imports, there are a sizable volume of local manufacturers. A lot of the companies which have been typically importing pharmaceutical products to the center East have been from Europe credited to proximity, but previous ten years has seen an increased import from the united states as well (Elizabeth, 2009).

There are several local players but all of them are from the common market and none of them produces any branded or new products. There is no investment in R&D in your community. However, the neighborhood manufacturers of universal drugs, like Israel prosper as they are able to export their products to the united states and the European union as well as to the other countries of the center East.

Human Resources, Skills and Technology

The region, especially Egypt has an abundant pool of theoretically trained people who could be employed at a comparatively lower salary rates. This makes having processing plants in your community a good investment. Additionally, the region is more and more embracing the Current Good Processing Practice (cGMP) authorized vegetation that are well-equipped to produce high specifications of products under strict quality controls.

These make the spot an attractive vacation spot for pharmaceutical organizations to make strategic alliances or certificate contracts and get their own regional manufacturing undertaken nearer to the marketplace. (Elizabeth, 2009)

Conclusion of Books Analysis

Pharmaceutical industry has been regularly showing two times digit development levels for the past many years. The progress is accompanied by increased shelling out for drug consumption. Studies also show that the increase in drug intake has been higher than the increase in prices or in shelling out for other aspects of medical care.

New diseases represent another group of individuals of pharmaceutical industry progress. Organizations act in response with new drugs, and have also been accused of collaborating with doctors and consumer groupings to make new diseases through a process of "disease mongering". Research and Development is the other important drivers of pharmaceutical development. The social great things about research will be more than twice those of the private advantages to the organization. Subsequently, Research is affected by controls, regulation, confidentiality and patent laws and regulations. In the centre East, though there's a growth in the pharma market, there are also anxieties of instability of the region, complex rules and regulations, and threat of cheap common drugs that foreign top quality pharmaceutical organizations suffer from. Any foreign firm operating in your community (like AstraZeneca) need to carefully assess such a sophisticated context and appropriately develop their marketing strategies. This research helps to study this.

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