What are some interesting mission statements or values statements of some of the companies in your industry? What do their statements reveal about them?

This article discusses all of the mission statements, value statements, and credo statements of big pharmaceutical companies.  Most of the companies have more than one statement of about their mission and values.  Most of the mission statements revolve around the fact that the company will serve the patients with the highest quality product and also that they will always be researching for products for the consumers.

One statement that I find unique is Pfizer’s’ mission statement, “We will become the world’s most valued company to patients, customers, colleagues, investors, business partners and the communities where we work and live.”  I find this statement unique because it doesn’t just include the consumer; it includes most of the stakeholders.  It includes the communities where they work and live which are also unique for a mission statement.  It shows that the company cares about the community and what the community thinks about the company.  AstraZeneca also has a unique aspect to their mission statement.  They say they are committed to “Putting the health of patients first by providing educational programs, resources, and tools designed to help empower and inform.”  This shows that AstraZeneca is very patient based.  They are concerned with making sure that the patient gets what they want and are more concerned with the patient than the research and development aspect.  One more interesting statement is that of Merck’s.  Merck states that,” While we work to develop innovative therapies, we also work hard to make sure they’re affordable. That’s why we offer assistance and discount programs to help make our medicines accessible to those who need them.”  They are appealing to the consumer by telling them that they are trying to help them get what they need.  All of the statements focus on the fact that it is always about the consumer.

Rachael Bieck

http://www.mba-tutorials.com/strategy/1122-pharmaceutical-companies-mission-statement-credo-and-values.html

Which Companies in the Industry stand out in regards to their view and actions in CSR?

The corporation Pfizer projects Corporate Social Responsibility by its efforts to aid the environment as well as funds to help the homeless and their community. Also, they uphold a strong effort in the progression of cures for malaria which includes adapting research to discover medicine more affordable to each person as well as upholding the maximum safety precautions.
Johnson and Johnson is also a company that exercises corporate social responsibility by their use of ethics in their products; they will not use child labor, animal testing or break ethical research guidelines. It is also a major priority of Johnson and Johnson to lower the impact they have on the environment by regulating CO2 emissions and reducing waste.
The company Merck & Co. puts efforts in to uphold high health and ethical codes. As well as putting humanity before profits with the hopes that their customers will notice this. They don't only talk about giving, but put it into action; "Merck also undertakes a wide range of philanthropy work on the national and global levels. in 2006 alone, Merck's philanthropic contributions totaled $826 Million.

http://www.duke.edu/web/soc142/team2/social.html#jj
http://www.pfizer.com/responsibility/working_with_hcp/working_with_hcp.jsp

Current Events and Their Impact

          When people think about the Pharmaceutical industry and current events the first thing that comes to mind is usually negative. Things like recalls for drugs that have been found to have dangerous side effects, or a shortage in flu shots and medicines. Contrary to popular belief, there are numerous positive advances in medicine being made everyday. Unfortunately the negative side of the industry is more news worthy than the positive and therefore more people see the bad side of the pharmaceutical industry. 
          Recently some positive news has come out of Europe about a blood thinner produced by the Pharmaceutical company, Bayer AG. The company applied to have it's drug, Xarelto be available to a wider range of patients, including those who are at higher risk to have a stroke, those who have "deep vein thrombosis, or DVT, and for the prevention of recurrent DVT and pulmonary embolism", according to an article by Natascha Divac. This news came shortly after a United States panel recommended approval for the drug, causing Bayer stock to rise. According to the article, "Blood thinners in the stroke-prevention indication are estimated to have a market potential of around $14 billion by 2017, with an estimated 4.5 billion patients affected by the problem world-wide". The Pharmaceutical industry is not generally known for making large contributions to stabilize and economy, but advances like this certainly can help. 
          It's not all good news in Europe though. European drug officials limited the use of a popular heart-rhythm drug Multaq. Officials cited safety reasons for the increased regulation of the drug. Just like with the drug produced by Bayer AG, the United States is expected to make similar limitations with the heart-rhythm drug in the coming months. Multaq saw a decrease in sales in 2011, making only 179 million in revenue. This is especially disappointing as Multaq was forecasted to be a billion-dollar-a-year drug. 
           It's quite clear that the Pharmaceutical industry has its share of good and bad stories, although the bad ones are usually the ones that get the most exposure. 


                 -Gabriel Resstack





http://online.wsj.com/article/SB10001424053111904563904576587101328777760.html
http://online.wsj.com/article/SB10001424053111903791504576588642520313706.html

Which Companies in the Industry stand out in regards to their view and actions in CSR?

One of the first companies that stood out when researching about corporate social responsibiltiy is Bayer. They have been awarded and recognized by the Dow Jones Sustainability Index (DJSI) multiple times over the past years. The DJSI consists of a list of the top-performing companies in sustainability in all industries. Bayer has received honors in both sustainability and social commitment several times. 

'Novartis' was another of the companies included in the DJSI. It has also won multiple awards for different aspects of the business, including: '2011 South - South Award for Global Health and Technology' and 'MedadNews 2010, Most admired Pharmaceutical Company'. (more can be seen in the list in the link below) 

However, after researching various sites, I found that the pharmaceutical company 'Roche' has been announced as the most sustainable healthcare company globally by the DJSI. This ranking portrays the commitment of Roche to its stakeholders and the environment.The CEO of Roche announced, "Over the past year we have made progress on our diversity and energy goals as well as introduced new programmes to increase access to our products in developing countries."

http://www.emarsys.net/custloads/125736536/md_397352.pdf

http://www.bayer.com/en/awards.aspx
http://www.novartis.com/careers/rankings-awards/index.shtml
http://worldpharmanews.com/roche/1790-roche-named-dow-jones-sustainability-index-leader-in-healthcare-for-third-consecutive-year

Ethics Challanges the Pharmaceutical Industry Faces

http://www.bmj.com/content/333/7582/1279.full

This article talks about intellectual property rights and their affect on drug distribution to poorer third world countries. Intellectual property rights "...enable one person or company to have exclusive control of the use of a particular piece of knowledge, thereby creating monopoly power." This patent on knowledge prevents third world countries from being able to produce drugs that could save the lives of vast amounts of people. The rights also help to prevent the production of generic drugs that many people in developing countries can afford. With only the brand name version of a drug being produced many people can no longer afford treatment for illnesses that could easily be cured.

This article was interesting because it talked about the ethics of the pharmaceutical industry but also tied in many aspects of economics and how big business works. the companies and governments mentioned in this article should be ashamed of themselves for preventing treatment to thousands of people because it is not as profitable. The use of generic drugs might not be as profitable as selling the brand name version but at some point these drug companies need to stop thinking about profits and start thinking about the lives they are putting in jeopardy because they can not afford the correct treatment.

The United State's war on heart disease

As living unhealthily became more and more prevalent within the United States, it goes without saying that heart disease is currently America's leader in terms of taking lives. The fault is not only on these individuals who allow themselves to fall into bad health, but the US government. The United states has created an environment in which companies that distribute inexpensive foods high in fats and sodium in mass quantities prosper exponentially. Currently, over 2 million US citizens have heart attacks annually and 800,000 of which are lethal. Although staggering, the sheer number is not the significant part about this statistic... it is that the majority of heart sicknesses are preventable by simply avoiding cigarettes, eating healthily, and exercising on a regular basis. 

What can be done about this crisis? For one, companies choosing to sell unhealthy foods could be taxed and the proceeds of which would of course go to heart attack preventative research. However, the government of the US has chosen a different route; setting up a program to increase awareness of how to help and prevent heart disease. The article supports this by stating: "The program will focus on helping Americans make healthy choices, such as preventing tobacco use and lowering consumption of salt and trans fats, and increasing use of treatments like aspirin and blood pressure and cholesterol-lowering medications." Companies such as Walgreens have taken advantage of this and are currently offering free blood pressure testing in hopes of creating a healthy and caring image for themselves. Medications such as aspirin are affective blood-thinners, meaning that individuals suffering from heart disease would be at a lower risk of blood clot. It is therefore my prediction that there will be a rise in aspirin demand as well as similar blood thinners in the war against heart disease. Overall, given the increase in government spending and citizen awareness, risk for heart disease is expected to decrease in the near future and save the lives of thousands. 

Feel free to comment on this post if inspired...

Stephen Kessler

What are the basic economics of the industry? How do companies make money? What are their costs?

The article that I read for this blog talks about the ins and outs of how pharmaceuticals are actually making their money.  The article also talks about how the pharmaceutical companies are displaying information about drug costs and expenses in a way that makes it more beneficial to the company and displays the information in such a way as to disguise the real information.  This article is an interview with Marcia Angell who is a physician and the editor in chief of the New England Journal of Medicine.  Marcia talks about how the pharmaceutical companies display the cost of each drug to distribute by including the opportunity cost.  The company displays the cost of distributing a drug as around 800 million dollars, when really it is only around 400 million dollars.  The companies say that their numbers are more correct because they take into account the cost of the time that they didn’t spend producing another drug.  The opportunity cost ends up almost doubling the actual cost.  Angell also talks about how the drug companies mark up drug prices a whopping “20 percent” from the manufacturing price.  This article may be from 2004 but still contains the important essentials for understanding how the pharmaceutical industry makes it money and the costs that they have.  Angell also talks about how the pharmaceutical industry has much more product than it needs.  She talks about how there are about 5 drugs for every purpose.  She feels that this does not need to be occurring because every drug does the same thing.

Pharmaceutical companies make their money from the production of drugs.  The profit is made from selling the drugs at a higher cost than what it took to produce.  As previously stated that could mean increasing the price by 20 percent to ensure a large profit.  To the consumer this just means high prices for drugs.  The pharmaceutical industry has an advantage.  People need their prescription medication.  For people on heart medication or cancer treatment they have no choice but to pay the high prices that the companies charge.  The pharmaceutical company has many costs.  Their costs include production, transportation, and marketing.  The article talks much about how the pharmaceutical companies attribute much of their costs to research and development.  Angell talks about how the companies attribute the high prices of the drugs to the fact that they need money for research and development.  The pharmaceutical companies put much of their profit back into research and development because research and development means different drugs.  The more types of drugs there are the more money companies can make.  The more money companies can make the more money they can put into research and development, and thus a cycle begins.
Rachael Bieck

http://motherjones.com/politics/2004/09/truth-about-drug-companies

What are some current events in your industry?

http://www.cnnexpansion.com/economia/2011/07/21/europa-da-mas-poderes-al-fondo-anticrisis

http://online.wsj.com/article/SB10001424053111904491704576574791877220786.html

Most of us are probably aware of the tough recession that has hit the global economy over the past few years and about how a lot of countries are still struggling to reboost their. 
Greece is a perfect example of a country that has recently required to be rescued from its slumping economic recession by countries in the Eurozone. The financial rescue of Greece consists of a total of $157,000 million from governments of these countries and a further 50,000 euros from private sector businesses by 2014.
The deplorable state of the Greek economy has greatly affected the pharmaceutical industry in this country; especially as Greece has a great majority of state-funded hospitals. State-funded businesses's main purpose is to provide a service for the community and not to make a profit, which is one of the factors that has led the Swiss company 'Roche Holding AG' to stop delivering some of its pharmaceutical products to Greek hospitals.
In this article, Jeanne Whalen states how Roche has started selling their drugs for cancer treatment and other deseases, directly to pharmacies instead of selling to hospitals. Roche's CEO, Severin Schwan says, "Patients at some hospitals now must take their prescriptions to a local pharmacy, and, in the case of intravenous or injected cancer drugs, bring them back to the hospital to be administered."
The reason for Roche doing this is, says a spokeswoman from Roche in the article, is because, "Greek hospitals and pharmacies generally pay Roche directly for drugs, and then seek reimbursement from the taxpayer-funded health-care system. Pharmacies are perhaps more prompt in paying Roche because they are privately owned and run for a profit, giving them better cash flow to cover their bills."
Roche is not the only company that has been having problems with Greece and the viability of their pharmaceutical payments. The Norweigan company Novo Nordisk S/A also cut the supply of certain brands of insulin in Greece for a period of time due to the lack of profit they were making. 

Other countries with state-funded hospitals, such as Spain, Italy and Portugal may also be risking this situation as many of them have fallen behind on their payments to companies in this industry.  

Supply and Demand in the Pharmaceutical Industry

       In most industries supply and demand are fairly straight forward. The price for products and services in most industries is determined by an economic equilibrium reached through supply and demand. However, in the pharmaceutical industry supply and demand is looked at differently because of the vast array of suppliers of the exact same drug. A good example of this is Advil and Tylenol. Both drugs relieve the same set of symptoms, and when you tac on the store brand of the pain reliever you're dealing with at least three different types of drugs that provide the same result.
       In a recent article published in the Wall Street Journal, Kristen Gerencher talks about how a recall of Tylenol during the flu season has lowered it's supply. In any other industry the reduction of supply would greatly affect the overall demand in that industry. However, the pharmaceutical industry includes "more than 600 over-the-counter and prescription medications" (Kristen Gerencher, Wall Street Journal), that include Acetaminophen, the active ingredient in pain relievers. Gerencher believes that, "Consumers accustomed to buying Tylenol also can choose a generic alternative that's less expensive". It's because of this pleather of alternative medicines that a reduction in the supply of one, will not really affect the overall supply or demand within the industry. 


-Gabriel Resstack






http://online.wsj.com/article/SB10001424053111903927204576577250729074390.html

What drives revenue growth in this industry?

http://content.healthaffairs.org/content/20/2/100.full

The pharmaceutical industry has been steadily increasing its revenue growth through technology innovations, the use of third party insurance coverage, the production of new drugs and therapies and the heavy use of marketing for over the counter medications as well as prescription drugs.

Advancements in technology have significantly impacted revenue growth in this industry. Previously if a person wanted to get a prescription from the pharmacy they would have to pay the cost out of pocket and then make a claim to the insurance company which would then reimburse them. Now because of innovations in telecommunications and information technology claims can be made instantly at the pharmacy thus making prescription drugs more convenient to obtain.

In addition, to technological innovations, the use of third party drug coverage has significantly risen. People today have more drug coverage put into their health insurance plan thus reducing their out of pocket costs making it easier for them to obtain the drugs they need no matter the cost. Because people have more extensive drug coverage the demand for prescription drugs has risen significantly.

Research and development has also played a large part in increasing the use of prescription drugs. The development of drugs for diseases in which there were previously none such as AIDS has been a major part of the increase of drug use. However, many drugs have also been made to help treat patients in a less costly manner . For example, the use of antidepressants to treat patients instead of using psychotherapy. Another example would be the use of beta blockers and cholesterol lowering medication to help prevent costly hospital visits and surgeries related to heart disease.

Finally, aggressive marketing of over the counter and prescription drugs has helped to increase the use of medications and has also helped to establish customer loyalty to brands. In the case of over the counter medications, heavy mass marketing through the use of print, television, and radio ads has helped to establish their presence in the market and has also helped them entice customers into buying medications for minor issues. For prescription drugs there is some marketing focused directly at the customer but for the most part marketing for these drugs is directed at the physician because he or she will be the one to provide the prescription to the customer. Drug representatives have become more aggressive and give free samples to many doctors so that they try their products in the hope of continued use. Most of the time this strategy works well and helps convince not only the doctor but also the patients to be loyal to certain brands of drugs. If the patient is responding well to the medication they pick up over the counter or that is perscribed to them they will stay loyal to the brand.

As you can see, many factors have attributed to revenue growth in the pharmaceutical industry. With continued research and technology innovations the industry will continue to find new markets for drugs and thus, continue their revenue increases even in slow economic times.