Steady demand and rising input costs will push up antidiarrheal drug prices in the next three years
Los Angeles, CA (PRWEB) March 25, 2014
Antidiarrheal drugs have a buyer power score of 3.1 out of 5. This score reflects a moderate level of buyer bargaining power. According to IBISWorld procurement analyst Anna Son, “prices of antidiarrheal drugs have fluctuated over the past three years because of rising regulatory compliance and production costs and stiff competition from generics”. Rising research and development spending and wages, on top of increasing prices of raw materials such as chemicals and allied products, have expanded production costs, and consequently, prices of antidiarrheals. However, the increased availability of generic drugs, which are far less expensive than their brand-name counterparts, and fierce competition among suppliers have helped drive the average price down in the three years to 2013.
The cost associated with switching suppliers varies depending on the type of supplier. For example, buyers can expect lower switching costs associated with suppliers of most commonly used antidiarrheals because of their wide availability and low buying lead time. This factor increases buyer power and allows the buyer to restock their inventory in a relatively short time frame, barring contract negotiations. On the other hand, buyers are more likely to incur higher costs when switching suppliers of more specialized antidiarrheals, especially when there are only a limited number of suppliers of that particular drug. “Furthermore, buyers are hampered by increasing market share concentration, as suppliers of antidiarrheals have been consolidating over the past three years in light of patent expirations, changes brought on by healthcare reform and the overall consolidation in the healthcare sector,” says Son.
The wide acceptance and adoption of antidiarrheals benefits buyers, contributing to steady demand. Moreover, most suppliers focus on existing contracts than reaching out to new markets, further increasing buyer power as suppliers seek to retain their existing contracts. However, the low availability of substitutes and a moderate level of product specialization strain buyers' negotiating power. The four largest vendors in the market are the Proctor & Gamble Company, Salix Pharmaceuticals, Sanofi, and Johnson & Johnson.
For more information, visit IBISWorld’s Antidiarrheal Drugs procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of antidiarrheal drugs, which are medications used to help control diarrhea and some of the symptoms that go along with it. These drugs may come in liquid, caplet and chewable tablet forms. Suppliers of antidiarrheals include manufacturers, wholesalers and distributors.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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