Business context Essay Example | Topics and Well Written Essays - 2000 words - 1

seam context - Essay ExampleThe main philosophy of R&D is that the money invested today willing fetch higher profits for the company in near future. It is a complex process with a structured framework. The steps of the process consist of synthesis and extr accomplishmention of unsanded helpful molecules, biological masking piece & pharmacological testing and pharmaceutical dosage formulation with stability testing. (Pharmaceutical R&D Costs, Risks, and Rewards, 1993) This process of developing, testing and offering the medicine to the market is time consuming and expensive. Due to these factors R&D cost is stepwise increasing which is directly affecting the increment of new drug prices. This will be evident if we guardedly notice the new drug prices, which are growing more rapidly than the inflation rate, whereas the prices of old drug show decrement. Global pharmaceutical market scenario is extremely complex here the large public arena investments is in basic biomedical R& D that influences the private sector to intensively fund on new research and development programs. Here the demand for the drugs are also indirectly generated i.e. the doctors and the wellness insurances act here as mediators to initiate demand for the drugs by prescribing them. Recently apart from the growth in the R&D cost a new crisis also gained prominence in the pharmaceutical world and that is the patentability of drugs and health related innovations. The pharmaceutical companies pour in billions of dollars on the R&D of new products and without the Intellectual proportion (IP) protection law the formulations of the drugs are simply being duplicated. These duplicate formulations are synthesized at much diminished cost and the company, which initially developed the formulation, loses huge amount of revenue. Due to this reason the pharmaceutical companies utilizes the IP uprightness to monopolize the production and marketing of these innovative drugs. Here this report will m ake an attempt to focus on the recent scenario of pharmaceutical sector regarding the causes of growing cost in R&D share and the importance of the intellectual patent tenure alterations for maintaining monopoly of the pharmaceutical companies. (OTA, 1993 Wei, n.d., p.1) Industry Overview on high R&D costs and Patent rights As mentioned earlier, the pharmaceutical companies annually endow billions of dollars in R&D. Recent studies meditate there is a staggering growth of expenses in R&D costs of the global pharmaceutical industry. Though R&D costs are tremendously increasing day-by-day, the pharmaceutical companies think of it as a necessary evil. It is because R&D cost enables the company to synthesize new formulations and helps to open new avenues of opportunity to generate greater profits. R&D costs vary widely between dissimilar drugs as this cost depends upon the type of formulation being developed. The factors influencing the R&D cost are the hazard of success, the molec ule base of the new drug or modification of an existing generic drug. Development of innovative drugs cost the most, a rough estimation reveals it generally amounts to more than $800 million (CBO, 2006. p.2) it also includes the cost of failed attempts. This adjudicate