A projected increase in demand for anesthetic drugs as a result of an aging population and expanded healthcare coverage is expected to lift the average price of anesthetics
Los Angeles, California (PRWEB) January 01, 2014
Anesthetic drugs have a buyer power score of 2.5 out of 5. The score reflects current negative pricing trends and indicates a moderate level of buyer bargaining power. “Prices for anesthetics have fluctuated over the past three years as a result of rising regulatory compliance costs and generics competition,” says IBISWorld procurement analyst Anna Son. The patent expiration of many blockbuster drugs has increased availability of generic anesthetics, which are typically far less expensive than their brand-name counterparts, thus helping to mitigate price growth over the past three years. Nevertheless, a limited number of suppliers of anesthetics that are in short supply, such as propofol, has kept prices high due to the constrained supply of those drugs.
The cost associated with switching anesthetics suppliers varies depending on the type of supplier. For example, buyers can expect lower switching costs associated with suppliers of commonly used anesthetics, such as ketamine, because of their instant availability and low buying lead time. “This provides buyers with the opportunity to restock their inventory in a relatively short time frame, barring contract negotiations,” says Son. In this case, buyers of anesthetic drugs have greater leverage in negotiating contracts. On the contrary, buyers are more likely to incur higher costs when they switch suppliers of anesthetics that are in short supply, especially when there are only a small number of suppliers of that particular drug. As such, suppliers of rare anesthetics have greater negotiating power over buyers. Some of the major vendors include Abbott Laboratories, Baxter International Inc., Fresenius Kabi AG and Hospira Inc.
Furthermore, anesthetic manufacturers typically capture high profit margins. High margins usually give buyers room to negotiate for lower prices. However, the low availability of substitutes, a moderate level of market share concentration and the high specialization among suppliers limit buyers' negotiating power. In addition, the anesthetics market is mature and has a low level of financial risk, given its established place in the supply chain.
For more information, visit IBISWorld’s anesthetic drugs procurement research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of anesthetic drugs. Anesthetic drugs are medicines used to produce anesthesia or loss of normal sensation or feeling and are generally administrated to facilitate surgery. Anesthetic drugs can be grouped into two classes: general anesthetics, which cause a reversible loss of consciousness, and local anesthetics, which cause a reversible loss of sensation in a particular area of the body while maintaining consciousness.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Vendor Financial Benchmarks
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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