Abstract
Pharmaceutical industry is categorized as two systems, R&D based pharmaceutical companies and generic pharmaceutical companies. The R&D based pharmaceutical companies need to invest huge capital and resource to develop new drugs and face big risk of failure. The generic pharmaceutical companies rely on price competition to gain market share via production of patent-off drugs. Taiwan market is a reimbursed based market. The Bureau of National Health Insurance (BNHI) has the biggest bargaining power to determine the medicine reimbursement price. To control growth in healthcare cost, BNHI announced several medicine management policies to reduce cost in medicines and price of medicines. Three of those policies, medicine price survey and adjustment, reimbursed price negotiation process and global budget control, reveal huge sales impact in those international R&D based pharmaceutical companies. Furthermore, international R&D based pharmaceutical companies also face great challenge from those generic pharmaceutical companies no matter in price protection or reservation of market share. This study is to understand competitive advantages and disadvantages of an international R&D based pharmaceutical company in Taiwan via publication analysis and employee interviews. Meanwhile, this study also try to define future development strategy and potential niche market via PEST analysis, Five-force analysis and Ansoff mix analysis. Through comprehensive analysis to find out that this company faces strong competition from generic companies due to its product mix structure. Especially, low cost is the key strategy within industry and governance which hold back its long term business development. Fortunately, this company still preserve good advantage in R&D and continue to launch new patented products into market. However, this company needs to speed up the market penetration of those new launch products and raise the entry barriers to competitors. At the same time, this company should keep " focus strategy" to develop its potential new product pipelines and create niche markets for them. With this strategy to overcome other competitive forces and generate profits to enable this company presenting consecutive growth and new product launch for Taiwanese patients.