E-DRUG: Millions for Viagra, Pennies for the Poor (cont)
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Perhaps it would be easier to grasp the major issues involved if one
considers the strategic choices available to organizations.
Essentially, an organization can elect to be a low cost organization
or differentiate itself from competitors by adding unique perceived
value.
Generic manufacturers select the low cost option. They have to keep their
costs down so that they can compete on the basis of low prices. Any frills
that they add to their product or service result in additional costs which
make them less competitive.
The Brand manufacturers tend to select some form of differentiation as
their basic strategy. Anything that they can do to enhance their status by
offering unique (perceived) added value improves their competitiveness.
Both Richard and James are correct - strategic choice is a deliberate
decision made by an organization to ensure its long term survival.
My greatest concern in this era of economic pressures is that the
actual value added by brand manufacturers to the safe and effective
use of drugs will be discounted against generics. Take for example
the education programmes available to health providers and patients.
When undertaking pharmacoeconomic comparisons of two drugs, how much
cognisance is given to these soft, difficult to measure variables?
Billy
Billy Futter
Associate Professor
Faculty of Pharmacy
Rhodes University, Grahamstown, South Africa
email B.Futter@ru.ac.za
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