The UK has a strong domestic pharmaceuticals industry that represents a considerable force on the

international market. The leading local companies in terms of market capitalisation are GSK
(US$103.29bn) and AstraZeneca (US$68.37bn)

SUPPLY SIDE – ECONOMIES OF SCALE

 6.th Largest drug market globally valued at GBP 19.28bn

 Highly Developed Economies of Scale

CAPITAL REQUIREMENTS

 Funding is a crucial barrier to the expansion of the sector

INCUMBENCY ADVANTAGES

 Defensive Strategies ,Non-price, controlled supply of raw materials, restrictive distribution

agreements, product differentiation, supply restrictions
 Highly Specialised Product ,R&D Required

UNEQUAL ACCESS TO DISTRIBUTION CHANNELS

 Parallel trade into the UK could rise markedly in the short term , EU
 35 Wholesalers in the UK ,DTP system manufacturers sell direct to pharmacies

RESTRICTIVE GOVERNMENT POLICY

 New Value-Based Pricing System have served to decelerate market growth.

 Price cuts on medicines will directly affect companies revenue-earning opportunities
 The pharmaceutical environment is generally considered fair and transparent
 MHRA
 `toolbox `for generic drugs European Commission report on sector , patent clusters, litigation
cases, settlement agreements ,intervention before regulatory authorities
 Dep for Bus, Enterprise and Regulatory Reform said no RD tax credits for small companies to
offset Intellectual Property

R&D

 Declining R&D productivity