+1-817-968-5551
+61-488-839-671
+44-7480-542904About Expert
Key Topics
Requirement
You are asked to brief the chief executive of a company which is subject to economic regulation in one of its final or intermediate markets, i.e. a market where the prices it is allowed to charge are limited by an independent regulator. She is appearing before a parliamentary committee which is exploring the effectiveness of regulation, and which has
said that it will ask questions about three areas, and she needs information from you for her answers to one of these areas. The areas are:
A. The role of consumers in the regulatory process;
B. The introduction of competition into the market;
C. How quality standards are included in regulation.
Your task is to:
1. remind her briefly of the fundamental reasons why economic regulation is applied to the company
2. explain how the issue (A, B or C above) is relevant to the sector, and in particular to your company
3. Provide her with a brief assessment of the effectiveness of regulation in your chosen area, including as much evidence as possible.
4. Provide arguments for changes in this area (A, B or C) which will improve the profitability of the company, and include the counterarguments which she is likely to be faced with, including references in case she needs to explore the background further
5. Provide a one paragraph summary of your briefing
You should choose a real company, identify it and include a brief explanation of its regulated function and the current regulatory arrangements; this need not be British, but you need to be able to find sufficient information about it to provide a sensible brief.
Solution
Introduction
Lupin Limited is a pharmaceutical company; its head quarter is in Mumbai, India having its presence in different locations globally. It is the 7th largest in terms of market and 10th largest in globally revenue generating as a generic Pharmaceutical company. It is one of the fastest growing Company in USA and Japan in the generic Pharmaceutical industry. In the terms of market share in prescription it is ranked 5th major Pharmaceutical Company in USA and 3rd largest in India in the terms of generating revenue.
A former professor from BITS Pilani Institute in Rajasthan, India was the founder of this company; the company gained its wide popularity by selling tuberculosis drugs worldwide. In present the company has a noteworthy crucial share in market in the field of Diabetology, pediatrics, Anti-infective, GI, CNS cardiovascular (prils and statins), NSAIDs and asthma segments. It is a renowned globally leader in Cephalosporin and Anti-TB segments. The Research and Development of the company accomplishes a significant result in the process of its newly found chemical program. Company’s venture into an advance system of delivery of drug and has evolved in development of technologies platform which are used to create a value addition in the generic pharmaceuticals. The manufacturing facilities of the company are wide spread in India and Japan and have also played a very important and vital role in facilitating the company to comprehend aspirations globally.
The company’s drugs reach 70 countries across the globe with its presence in USA, Europe, Japan & Australia. It has huge presence in emerging markets such as India, the Philippines and South Africa as well. Its drugs range from branded drugs, APIs, advance drug delivery systems to biotechnology. Lupin’s business comprise of entire pharmaceutical value chain.
Visit Allassignmenthelp.com to get the best labor economics assignment help from highly qualified and experienced writers. In our economics homework help and economics assignment help service, you can experience benefits like authentic work, on-time delivery, cost-efficiency, and professionalism with our team of skilled writers, editors, and researchers.
Importance of economic regulation in pharmacy sector
Price regulation:
There is a high rate of entry in pharmaceutical industry. This shows that it is structurally competitive. To the extent market have high consumption rate for the drugs manufactured, the patents taken by the company justifies the R&D costs spent by the company. Even though the patent bar is generally an equivalent product in the life of patents, however they do not stop the entry of like products that may be therapeutic players. Thus, its neither an usual monopoly, and nor the patents provide offers any principle for regulating pharmaceutical prices.
The rational for drug pricing derives its importance from the fact that a need of a drug may make a company/supplier of drug to charge exorbitant pricing which may make it impossible for patients to buy without draining out there substantial financial sources. It consequently becomes the job of the government to regulate the prices in such manner that it is beneficial not only to company, but also affordable to the public at large depending upon the consumption of the drugs.
This is also rational because companies with low ethical standards may charge unreasonable prices from patients even when their overall cost of making the drug is low or easily recoverable. If the pricing regulations are not kept in place, then this could result in severe over charging. The government has to in such case come up with certain measures so that the consumers, suppliers and manufacturers are all promoted. Companies may make reasonable profits out of its pains both in manpower and resources. The patient may be able to get the reasonable pricing for the medicine he seeks for the treatment of its diseases. It is very difficult and so, special regulatory authorities are assigned this task.
Drugs which are having huge sales and market share of more than fifty percent are subjected to price regulation. These drugs are referred to as scheduled drugs. The National Pharmaceutical Pricing Authority (NPPA) also regulates the pricing of bulk drugs.
For drugs not under price control, firms can set their Minimum Retail price (MRP). The regulator only interferes in cases where drugs have adequate sales and where annual price surges by 10%. This shows that the Indian government has elevated itself to a level where it focuses on making available the generic drugs to patients at affordable prices. This is also done with a view to keep a check on the profit mongering by the companies.
How quality standards included in regulation are important to the pharmacy sector and to Lupin
Good manufacturing Practices (GMP) lay down an international guidelines for drug manufacturing devices for medical purposes to make sure the the quality of products in the process of production. In recent years, GMP protocols are being adopted by over 100 countries either in the form of regulations, directives or guides.
The main objective of Good manufacturing Practices is to minimize the risk associated and related with the manufacturing of products, their packing, labeling, testing, distributing and so on. These set of rules are mainly concerned with factors such as drug quality, safety, efficacy and potency.
The importance of quality standards could also be understood in general manner. If the quality controls are not set in place, then irresponsible companies could overlook the clinical trials which in return could defeat the very purpose of the drug. It could result in serious side effects which could do more harm than good. Additionally, the quality standards ensure that a certain level of surety is obtained before launching a particular drug in the market at a commercial scale. This is done in general to protect the public at large because pharmaceutical is a very sensitive issue as it may result in life and death of a person.Lupin conducts itself with uncompromising integrity and honesty and insists on the highest ethical standards.
Lupin’s association with leading colleges likes American college of Cardiology (ACC), the Ian Donald School, European Society of Cardiology, etc. has provided latest technical knowhow to the already thriving infrastructure at Lupin. The key focus of the company has been all about spreading awareness, providing education in medicine to its patients reasonable enough to understand the very basics of medicine, teaching society at large for preventive care. Some examples which can be quoted here are Lupin’s spirometry, CO monitoring camps helping in asthma/COPD, diabetics etc.
The focus of the company is also on nurturing and maintaining 5500+ product marketing and sales workforce. This is achieved through extensive training and technical inputs ensuring our timely tracking of new innovations.
Our systems at Lupin help us to reach the wide base of patients through the network of sound trained work force.
Effectiveness of regulation in quality standards
The regulations are effective in checking the overall quality of the drugs manufactured and marketed by the Indian firms. For obtaining approvals of International regulatory bodies, the regulators from these countries visit Indian labs for awarding approval.
Lupin has several of such approvals from its various drugs in generic and biotechnology areas. The quality standards set in the regulation not only provides the company a certain level of satisfaction before launching it into the markets, it opens gateways for international markets as well.
The drug after obtaining approval of quality from regulating bodies can be exported to international markets, thereby increasing the profitability of the company and its market presence.
For example- Lupin has focused on making API (Active pharmaceutical ingredients), thereby being world leader in therapeutic segments such as Cephalosporins, Cardiovascular and the Anti-TB space for over 15 years.
Continuous focus of Lupin in terms of meeting extreme quality standards has made it a market leader in several drugs across the globe.
Changes in quality standards to improve the profitability of the company:
In India, the quality standards mainly comprise of CDSCO (Central drugs standard control organization). Goods manufacturing practices guidelines in India are mainly part of Schedule M of Drugs and cosmetics Act, 1940.
Even though the guidelines for drug manufacturing in India are at par with the international guidelines, even then obtaining approval from regulatory bodies of different countries is a must. This delays the commercial production of the drug for the purpose of export. To avoid delay in commercial production, the procedures to seek approval should be started at a very early stage.
Quality standards can further be improved in order to protect the consumers from the less tested drugs or low quality drugs. This can be done by setting up a more technically sound team at India’s various regulatory authorities to guide the companies in their respective research and development areas focusing on various generic drugs, biotechnology, cardiovascular, diabetics, etc. quality standards have to enhanced in the regulation at par with regulators such as FDA in USA.
Even though our company has a very extensive and in depth research program, but there is always an area where company can work. It can keep a vigil over the new regulations in quality control coming across the globe and fulfill its criteria for its ongoing research and development areas. This will provide the company with the two benefits. First, it will provide ample time to the research and development facility teams to make appropriate changes in their ongoing research. Second, it will provide with cost cutting in terms of time spent in doing changes to satisfy the local or international standards.
This can be understood with a following example- a company A Ltd. is doing its research in generic drugs for the cure of certain disease. It satisfied its criteria for local government approval after clinical trials. Then it saw opportunity in international market and decided to promote the drug manufactured by it in international markets. Let us take example of USA. For selling drugs in USA, the company needs approval of FDA. The guidelines set up by FDA were not satisfied by the company manufactured drug. This resulted in decline of permission by FDA. Now, the company will send the report to its research and development team which will make requisite changes in the processes which will result in additional cost in terms of manpower, resources utilized, infrastructure cost in indirect manner. The cost spent in seeking FDA approval is also wasted. The company in this case could follow a strategy where the research and development is before hand on international basis. The company could at the time of making research and development coordinate the same with its sales department so that they could identify the potential markets. Then, the regulatory framework of the countries for which the market is identified could be studied by the research team so as to do testing of the drugs accordingly.
Place Order For A Top Grade Assignment Now
We have some amazing discount offers running for the students
Place Your OrderSummary
The price regulations are important in order to prevent the greedy companies from making unreasonable profit out of a basic human necessity. The health sector is extremely crucial to the fair pricing as the drugs are to be used for human cure. The quality controls are set in place so as to prevent the irresponsible companies from making drugs of poor quality or make drugs with low level of clinical trials. Clinical trials provide a certain level of surety that the drugs are safe and could be further used for cure of diseases with no, minimum, or known side effects. Lupin has come a long way in being a global market leader in drugs related to cure of TB, diabetics, cardiovascular, generic and biotechnology. There are always areas for improvement and company could keep a vigil over the international quality control regulators so as to avoid wasting time, money, manpower, infrastructure resources. This could also help in achieving the overall vision of the company in being a market leader at a global level in drugs in various areas at affordable pricing across all sectors. The company already follows Good Manufacturing Policy framed by the Indian Pharmacy regulator. There are stringent set of guidelines that the research and development team has to follow in order to avoid procedural delays and set the best industry standards.
References
-
Wikipedia.(2016) Lupin Limited. [Online] Avialable from: https://en.wikipedia.org/wiki/Lupin_Limited. [Accessed: 17th January 2016]
-
Lupinworld.com. (2016) Active pharmaceutical ingredients.[Online] Avialable from:http://www.lupinworld.com/active-pharmaceutical.php[Accessed: 17th January 2016]
-
Iyer.P., (2008) Regulatory Issues in the Indian Pharmaceutical Industry.[Online] Avialable from:http://www.nistads.res.in/indiasnt2008/t4industry/t4ind18.htm[Accessed: 17th January 2016]
-
Indian Pharmaceutical Association.(2016) Regulations and guidelines.[Online] Avialable from:http://www.ipapharma.org/Regulations.aspx[Accessed: 17th January 2016]
-
Indian Brand Equity Foundation.(2016) Indian Pharmaceutical Industry.[Online] Avialable from:http://www.ibef.org/industry/pharmaceutical-india.aspx[Accessed: 17th January 2016]
-
Wettermark, B., Godman, B., Jacobsson, B. and Haaijer-Ruskamp, F.M., (2009).Soft regulations in pharmaceutical policy making. Applied health economics and health policy, 7(3), pp.137-147.
-
Ekelund, M. and Persson, B., (2003).Pharmaceutical pricing in a regulated market.Review of Economics and Statistics, 85(2), pp.298-306.
-
Kyle, M.K., (2007). Pharmaceutical price controls and entry strategies. The Review of Economics and Statistics, 89(1), pp.88-99.
Give your grades a boost
Just share your requirements and get customized solutions on time.
-
1,168,768 Orders
-
4.9/5 Overall Rating
-
5,052 Experts
