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The study on the adjustment of research-based pharmaceutical companies’ operating model against generic manufacturers’ competition
Research-based pharmaceutical company
Drug price survey
New drug pricing
|Issue Date: ||2016-02-03 12:05:22 (UTC+8)|
National Health Insurance (NHI) program has been implemented in Taiwan for almost 20 years. It has earned recognition for the compulsory enrollment for all residents in Taiwan, the benefits covered from basic to complicated medical care, the prevalence of contract medical facility and the convenience of going to doctors.
NHI, however, has caused fiscal deficit for the past few years. Drug cost, among the over 500,000,000,000 NTD health insurance fee, is the second largest expenditure, which takes up 25 percent of health insurance fee. Therefore, Bureau of National Health Insurance has taken measures to manage and control drug cost and drug price multiple times for a long period. Foreign pharmaceuticals have cooperated on the low-priced pricing for new drugs and have lowered drug price after drug price evaluation every two year. However, there is still demand from medical institution for lowering drug price. The profit is therefore significantly affected in the long run.
Among the impacts, the significant one for research-based pharmaceutical companies is “three sameness of drug” in the 2nd generation NHI, which will be implemented in this coming July. This three sameness policy is to adjust those drugs which are covered by NHI for over 15 years and are of the same ingredients and quality to the same price. If this policy is put into practice, the profit of research-based pharmaceutical companies would plunge, which may result in their leave of Taiwan market. The domestic generic drugs, as a result, would be the only choice for the general public. Moreover, the major flaw of this three sameness policy is that it merely considers the drug price NHI covers, not the costs of pharmaceutical companies. That the drug price is set inflexibly without taking costs difference into consideration is against not only market mechanism but also the essence of NHI.
The questions this study aimed to investigate were: 1. What have been the operating models of research-based pharmaceutical companies in Taiwan in the circumstances of drug price drop year by year before “three sameness policy”? 2. How have the government-sponsored generic drugs affected the market activities of drug patent expiration of research-based pharmaceutical companies? 3. What have been the impacts of “three sameness policy” on drug patent expiration of research-based pharmaceutical companies? 4. How should the operating model of Takeda Pharmaceuticals Taiwan, Ltd. adapt to, from the aspect of primary value activities, the condition of drug patent expiration of its profitable drugs?
Based on the framework of operating model by Afuah A.(2004), this study began with the operating model of research-based pharmaceutical companies in former NHI policy. It then elaborated on how changes of the present NHI policy have influenced the marketing activities of the case company and how these activities have influenced the company’s resources, position and costs.
This study reveals that “three sameness policies” is favorable for Taiwanese generic manufacturers for their costs competition. However, the instability of raw materials could not gain the trust of patients and doctors. Therefore, in order to cooperate on the demand for low-price and high-quality drug, researched-based pharmaceutical companies supervise the government’s check on the quality of generic manufacturers, employ litigation to suspend the launch of generic drugs or merge domestic generic manufacturers. If research-based pharmaceutical companies with drug patent expiration would like to compete with generic manufacturers and make a profit in NHI policy, they would have to change their operating model. How to reduce costs of purchase and manufacture and go further to adjust the input of physical and intangible assets, strengthen professional training of personnel and organization and modify strategies for pricing and market segmentation are the main issues worth considering.
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|Source URI: ||http://thesis.lib.nccu.edu.tw/record/#G0101932139|
|Data Type: ||thesis|
|Appears in Collections:||[經營管理碩士學程EMBA] 學位論文|
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