Challenges to the pharmaceutical industrys blockbuster-driven business Essay

Challenges to the pharmaceutical industrys blockbuster-driven business model, and the effectiveness of GlaxoSmithKlines strategies for meeting these challenges - Essay Example Scientific innovations take unexpectedly long periods to record progress or profits, which is pulling back the pharmaceutical industry’s blockbuster-driven business model (Antonijevic, 2013, p. 4). Many pharmaceuticals that launched blockbuster models between 1995 and 2000 were the outcome of discovery events began between the 1970s and 1980s (Ding et al., 2013, p. 426). Pharmaceuticals made these efforts to commercialize the upsurge of scientific understanding that had been growing for two decades. Recent scientific developments such as increased amounts of screening and genomics have raised output but their effect is yet to be felt at the bottom line. In the meantime, numerous pipelines guarantee just single digit rates of growth following the expiration of patent effects. Increases in development costs pose as another challenge for pharmaceuticals’ blockbuster strategies (Shore, 2012, p. 116). Declining success rates, higher medical expenses per patient, and the need to carry out bigger tests to gratify increasingly strict regulatory barriers cause increases in development costs. Recently printed surveys indicate that the general expenses for an effective medication increased more than twice during the 1990s, reaching $800 million, counting capital expenses (Dubey and Dubey, 2010, p. 182). While R&D is turning out to be less productive, this data is conservative, particularly for extremely competitive blockbuster groups. As a result, rises in development costs could have caused a much more significant blow to blockbuster-driven business models before the 2000s. The deterioration of patent protection contributed significantly to the collapse of blockbuster-driven business models among pharmaceuticals (Rickwood, 2012). Patent challenges included briefer durations of exclusiveness that raised competition from rival commodities that get FDA approval