Strategies and performances in the pharmaceutical Italian market
- Presenter:
Chair: Richard Frank; Discussant: Chris Roebuck Tue June 6, 2006 13:45-15:15 Room 309
A structural analysis has put in evidence how variations in the economic results of pharmaceutical firms may be due both to exogenous and endogenous factors. The implementation of an innovating strategy based on the introduction of new products (due to a higher portion of investments in R&D activities), for example, might lead to higher profits. At the same time, the strategy selection process might depend on some structural “exogenous” factors, such as regulatory issues, concentration in the market, changes in the institutional framework, etc., likely to influence firms’ performances.
The aim of the present paper is to focus on the first of the two aspects above mentioned: here, a micro analysis, aimed at studying the behaviour of Italian pharmaceutical firms, that, across the period 1994-2004, achieved the 75% of total sales, is performed. We even analysed two sub-periods of time (1994-1999 and 1999-2004), characterised by a different regulatory interventions, to better understand the effects of regulation on pharmaceutical strategies.
At the same time, this paper aims at providing useful information to gain an insight into a few typical behaviors of businesses in the Italian pharmaceutical market and how business strategies changed in the last decade.
Variations in economic results might depend on the adoption of a given strategy (conservative vs. innovating), on the number of new products and/or best seller drugs marketed, on the circumstance that the firm belongs to an established group or experienced a merger in order to consolidate its position in the market, or on a combination of all these factors.
A limited impact of the latter would indicate how increasing profits are mainly due to institutional “exogenous” factors, likely to be investigated through a macro analysis.
Results of this paper are useful to understand trends in pharmaceutical industry in Italy and may be used in international comparisons, to analyse the impact of some “exogenous” factors that influence, for example, EU pharmaceutical market performance.
