Answer and explanation:
Pharmaceutical firms face tying concerned country risks in the International business.
1. Patent Rights: Patent rights saves tie concerned drugs produced by Pharmaceutical Company be at least 8-12 years. However, many countries do not have proper Patent Protection Laws and gradually the quality and cost of the drugs are affected Intien some other company produces the same drug at a lower price.
2. Cost of Research & Development: Pharmaceutical firms invest heavily in the R &D process of making a drug. More than 20% of their revenues are invested in Research & Development. Nearly 12 —15 years are taken in order to manufacture a drug-related to AIDS or Cancer and as much as 800 million S are invested for the same.
3. Return on Investment: ROI is wry important for any firm in order to survive in a positive stage in the market. The Pharmaceutical companies are investing heavily in a particular drug they surety have to sell it at a higher price in order to make profits. Only 3 out of 10 compounds are approved to be used for a patient. In some countries, the firms have to sell the drug at a lower price under pressure from the global community. This affects the ROI of the company in a negative way.
4. Generic Brands: Drug is protected under a patent for at least 12 years in reality compared to 20 wars as per law. After the patent is over the generic manufacturers can produce the same drug at lesser prices after approval from the government. These Generic Manufacturers have the positive side of not investing bin R & D for the drug. This affects the original drug manufacturer who invested millions in order to produce a particular drug. when the same drug is available at lower prices, the consumer will not purchase it at a high price.
5. Counterfeit Drugs: Wrlh the Drug Industry booming many firms are trying to make money by the same by producing counterfeit drugs. The counterfeit drugs look the same Ike real drugs and cost may be less or the same, but the quality is very pop or no quality at all. The Pharma companies are facing a heavy challenge in order to counter counterfeit operations and this is having a wry negative effect on the original drug manufacturers. Consumers or Patients consuming counterfeit drugs are dying or getting ill and the goodwill of the original drug maker is being jeopardized.
6. Goodwill of the Industry: the goodwill of the Pharmaceutical Industries is at stake. Generic drugs in the market, poor patent rights, counterfeit drugs, all these are jeopardizing the goodwill of the Pharmaceutical industries. The counterfeit drugs are fake drugs in the name of the original drug manufacturer, generic drugs are sold at lower prices, and patent Rights are not able to protect the drug beyond some years.
The political and legal systems of the country affect the Pharmaceutical Industry in the following ways:
1. Unavailability of Strong Patent Protection Rights: Patent Laws are like a Lifeline for any Pharmaceutical industry. These protect the individuality and the genuineness of the concerned Drug. Patent rights and rules must be strong so that any generic manufacturer cannot copy or manufacture the same in due time. Many political systems do not have strong Patent Protection Rights and laws. This hampers the security and the genuineness of any Pharmaceutical Drug Manufacturer.
2. Sanctions: Many countries impose certain sanctions on foreign manufacturers to set up business or operations in the host country. This must be avoided in the case of Pharmaceutical industries as these encourage the production of drugs and medicines, which may save millions of people from diseases. In reverse, the set up of Pharmaceuticals must be encouraged.
3. Financial support: Pharmaceuticals engage in huge financial investments in Research & Development of drugs. Many may not even get a positive Return on Investment as expected. The government must and should provide financial aid to these industries so that they can do proper R&D and manufacture better drugs in order to save society.
4. Control Counterfeit Drugs: Counterfeit drugs are harming the original and genuine pharmaceutical firm in a major way. The government must impose strict laws in order to check the counterfeit industry and see that the original manufacturers are not affected by the same.
5. Relax Laws & Taxes on In port and Export: The government should relax taxes on the import and export of the life-saving drugs manufactured by Pharmaceuticals. The levying of taxes increases the cost of the drug and the same affects the consumer in a negative way. Many people are not able to afford life-saving drugs and millions are dying because of the same.
