ABOUT There are over 735 pharmaceutical companies in the Uk One in five of the world's biggest-selling prescription drugs

gs were developed in the UK whom shares have been declining the last decade. Customers are the public hospitals, private clinics and local pharmacies NHS. MARKET SHARE UK global share of the pharmaceutical market : Evidence of its strength and success. It is fifth largest in the world by total sales, Representing 7% of world sales The major firms that pioneered the industry back in the early 20th century were located in Switzerland, Germany, UK and the US. Today, these countries are still the location of the major firms. Since the industry requires sophisticated manufacturing techniques and intensive, high-cost R&D, the most profitable firms are in predominantly advanced, developed economies. Even with a growth in the industry, and changing trends in international trade, the early pioneers are still in the lead. An accurate measure of how a country rates in the league of medicines is its share of the worlds market for prescription medicines. UK is placed in the top 10 most important sources of new medicines in the world.

Pharmaceutical industry

MARKET STRUCTURE In the UK the pharmaceutical indusrty is operating in an oligopoly; an industry that is dominated by a small number of sellers. Characteristics: Profit maximization conditions: An oligopoly maximizes profits by producing where marginal revenue equals marginal costs. Ability to set price: Oligopolies are price setters rather than price takers. Entry and exit: Barriers to entry are high. The most important barriers are economies of scale, patents and access to expensive and complex technology. ECONOMIES OF SCALE The pharmaceutical industry is currently undergoing a period of very significant transformation. The majority of Big Pharma companies generate high returns, thus providing them with excess cash for further rapid growth Although size of the company on its own does not guarantee success, it gives a significant advantage, especially in pharmaceutical industry. DISECONOMIES OF SCALE

 Evidence shows that diseconomies of scale exist in pharmaceutical companies' research and development too. BUSINESS OBJECTIVES 1. Product stewardship 2. Environmental stability 3. Safety and health

RECENT MERGERS On January 26, 2009, after year-long negotiations between the two companies, Pfizer agreed to buy pharmaceuticals rival Wyeth for a a price of $68 billion in cash, shares and loans, including $22.5 billion lent by five major Wall Street banks. In October 2010, Pfizer agreed to buy King Pharmaceuticals for $3.6 billion in cash In July 2009 GlaxoSmithKline has agreed buy Stiefel Laboratories, the US skincare specialist, for $3.6 billion LATEST NEWS Pharmaceuticals giant Novartis announced on Wednesday it planned to reduce the total workforce of 950 at its Horsham site by 550. RULINGS UPON VIOLATION OF COMPETITION LAW EXAMPLE Napp was found by the OFT to be supplying certain drugs to patients in the community at excessively high prices while supplying to hospitals at high discount levels with the effect of eliminating competition. The 3.2 million fine against NAPP (subsequently reduced to 2.2 million) was the first financial penalty to be set by the Office of fair trading under competition law.