Every sector has a profit motive and it’s no surprise that the pharma business is no different. As much as client satisfaction is a driving factor, receiving good revenue as a return on investment or ROI is also a deciding element when it comes to planning business strategies. Many pharmaceutical companies have been in a state of conflict of choice between developing specialty drugs or sticking with generic ones.
Big pharma companies taking the lead:
Big pharma companies are looking onto the US specialty business with a vision to create long term growth. Sun Pharmaceutical Industries Ltd, a company dedicated to making drugs in India, takes the lead in this regard. It focuses on launching specialty drugs in dermatology and ophthalmology and its revenue earned from the global specialty market rounded up to $118 million. Other companies like Lupin, DRL, Cipla, and Aurobindo Pharma have spent heavily on specialty R&D are exploring the specialty medicines markets. They came up with complex injectables, biosimilars and other drugs to maintain their place but Sun Pharma still dominates the industry.
Challenges surrounding specialty drugs:
Disease-specific: As the name suggests, specialty drugs are used to treat specific illnesses and are made for a comparatively smaller number of clients than generic drugs.
High production cost: Their drugs require a huge amount of investment for research, production and marketing purposes. Because of the cost being so high, the revenue and profit made from these drugs may be low marginally, especially if they don’t work well in the market.
Investor’s Expectations: As mentioned above, the cost incurred to make such products are too much for the firm to carry on their own, which is why they need investors. But shareholders that are willing to put their money may have extremely high expectations from the product that they are sponsoring. Sometimes, the product due to one reason or the other may not meet the eagerness build-up for its launch leading to its fall.
Relative Profits and High risk: Though the profit margin is impressive, it is not the same for all companies. What plans work for one company may not work for the other. The winning companies are the richest ones in this area as they possess the resources to facilitate specialty R&D. For startups and rookies entering the specialty, the market seems to be a little too far stretched and complicated as they may lack the experience and knowledge required to rule this market
Thus, before diving into the specialty drug market it is important for pharmaceutical firms to weigh their pros and cons and come up with a foolproof plan. It is possible to succeed in this area but it has to be planned and executed well. With the US-based specialty drug market on a constant state of growth, it is safe to say the future perhaps holds the cure to almost all diseases.