1. General description
The drug manufacturing industry is concerned with the development, production and marketing of drugs which are to be used as medication. This is one of the oldest industries in the world. The first drug stores date back to the middle Ages. Some of today’s pharmaceutical companies have been founded in the beginning of the previous century. Important discoveries have been made in the early 20th century such as insulin and penicillin who became mass produced. More drugs were developed during the 1950s-1960s such as contraceptives and heart drugs. During that time numerous organizations and declarations were established in order to regulate the industry. Until the 1970s the drug manufacturing industry remained relatively small, and then it began expanding quickly. With the development of technologies and the internet research, manufacturing, marketing and sales of drugs became a lot easier.
In general the drug manufacturing industry is very risky. In order companies to stay in business they need to research and develop new products. Firstly companies need to develop new compounds, however only one on every ten thousand compounds becomes approved and it takes years to do this. Then only 3 out of 20 drugs make enough revenue to cover their development cost and only 1 out of every 3 drugs generates enough money to cover the costs of previously failed drugs.
2. Drug manufacturing industry today.
In the recent years the drug industry underwent a significant transformation. Many of the big companies generate high revenues, which allow them to expand. Some of them expand on their own others through mergers and the buying of smaller companies.
In the recent years drug companies showed an increase in their revenues and the industry is expected to continue to grow in the following years due to several factors. Firstly, due to an increase in life expectancy, this in turn is a sign of future increase in demand for medications for the elderly. Secondly, there is a strong emphasis on research & development. Although, it requires 10 or more years to develop a drug and the chance to be approved is very low, companies have been increasing their investment in R&D. Thirdly, regions of the world such as Asia and Africa make up of a small percentage of sales of drugs compared to regions such as North America and Europe. Economies in Asia and Africa tend to be growing and it is...