Stakeholders in the pharmaceutical industry
This is a detailed analysis of the stakeholders in the pharmaceutical industry. The global pharmaceutical industry is very complex and the barriers to market entry are high. The sheer volume of data, different types of stakeholders, constant technological change, and new regulations have made it a very difficult ecosystem to operate in.
The global revenues generated by pharma companies totals around $1.27 trillion (Mikulic, 2021). Some of the leading pharma companies are from the United States. The US has the largest pharma market in the world. Other big markets are China, Japan, Germany, France, Brazil, Italy, UK, Spain, Canada, India, and Russia.
List of the stakeholders in the pharmaceutical industry
Pharmaceutical companies are very important stakeholders in the pharmaceutical industry. They carry out research to develop new medicine. Without them, doctors and nurses are often unable to deal with patients’ health issues and challenges.
The top 10 pharmaceutical companies in the world are Pfizer, AbbVie, Johnson & Johnson, Novartis, Roche, Bristol-Myers Squibb, Merck & Co, AstraZeneca, Sanofi, GlaxoSmithKline. It is worth mentioning that some of them have been accused of making too much profits.
Harding (2022) reports that five UK firms have been fined with a combined £35m ($47m) by the Competitions and Markets Authority (CMA) in the UK for extortionately driving up the price of a medicine used by the NHS. Some companies were also fined in the USA in the past over price violations.
Government bodies regulate the pharmaceutical industry. Medicines and Healthcare Products Regulatory Agency (MHRA) is the regulatory body in the UK, and The Food and Drug Administration (FDA) is in the USA. These bodies are responsible for ensuring that new medicines are tested and approved before they can be distributed to the public.
Research and development organisations (R&D)
Many pharmaceutical companies do a lot of basic research before they begin developing new medicines. This research is often done by pharmaceutical R&D organisations. The research is very important for the future of the industry, hence the importance of the research and development organisations.
When a medicine is approved, it does not just hit the healthcare system. It must first pass through the hands of healthcare providers, such as doctors and nurses. Medicine distribution begins with a sales representative. A sales representative is a pharmaceutical company employee who travels to doctors’ offices and hospitals to demonstrate the medicine and get approval for them to be used in a practice.
Patients and patient associations
Patients are the most important stakeholders in the pharmaceutical industry. Medicines are developed to help them deal with their health challenges. However, individual patients do not have much power to influence the industry. Therefore, they sometimes form patient associations to ensure that their voices are heard when decisions are made.
Pharmacies and retailers
Pharmacies and retailers sell medicines to the public. Sometimes they need prescriptions from doctors and nurses to do so, while a lot of medicines can be purchased over the counter without any prescription.
Summary of stakeholders in pharmaceutical industry
The global pharmaceutical industry is complex and challenging. As shown above that there are different stakeholders in this industry. For example, government bodies regulate the development of medicines. Healthcare providers such as doctors and nurses, decide which medicines their patients receive. However, the most important stakeholders are the patients.
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Last update: 25 August 2022
Harding, L. (2022) Big pharma fined £35m by competition regulator over NHS drug prices, available at: https://uk.finance.yahoo.com/news/uk-firms-fined-cma-illegal-nhs-drug-110336988.html (accessed 25 August 2022)
Makulic, M. (2021) Global pharmaceutical industry – statistics & facts, available at: https://www.statista.com/topics/1764/global-pharmaceutical-industry/#dossierKeyfigures (accessed 25 August 2022)
Author: Joe David
Joe David has years of teaching experience both in the UK and abroad. He writes regularly online on a variety of topics. He has a keen interest in business, hospitality, and tourism management. He holds a Postgraduate Diploma in Management Studies and a Post Graduate Diploma in Marketing Management.