Research and Markets: Analyze the American Pharmaceutical Industry Through Porter's Five Forces

and molecular levels to dramatically advance the treatment of disease.

Between 1995 and 2005, more than 300 new drugs, biologics, and vaccines that prevent and treat over 150 conditions were approved by the FDA.3 The FDA also gave the go-ahead for numerous new indications for previously approved medicines, allowing physicians to tailor treatment strategies to meet a patient's individual disease status, past medication history, side effect tolerance, and preferences.

The US pharmaceutical industry is a highly globalized industry, dominated by multinational companies that engage in significant business activity in many countries and whose products are distributed and marketed worldwide. The industry has undergone dramatic structural changes over the past few decades, with the rise of the biotechnology sector, substantial growth in demand driven by demographics and substitution away from other therapeutic modalities such as surgery, and increased competition from globally active generic manufacturers.

The pharmaceutical industry is under mounting scrutiny because of rapidly increasing expenditures for drugs in the United States. Drug expenditures are now the fastest-growing component of health care costs, increasing at the rate of about 15 percent per year. They account for about eight percent of health care spending, and at their current rate of increase, they will soon surpass spending for physicians' services and, for many health maintenance organizations