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.
I think that everything that you talk about has the common thread of technology and how technology has such a huge impact on the pharmaceutical and biotech companies. We should definitely save this for the paper as we are sure to talk about technology.
ReplyDeleteI find medicinal advertisements the sneakiest because I never really notice when they come on television or radio. Yet I buy all the products that are being advertised because the brand name is subconsciously recorded in my memory.
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