Rising demand from the growing number of insured patients and new patents has allowed suppliers to charge premium prices with little competition from generic manufacturers
Los Angeles, CA (PRWEB) June 26, 2014
Antiviral drugs have a buyer power score of 2.4 out of 5. This score indicates that antiviral drug suppliers have more power than buyers when negotiating supply contracts. According to IBISWorld analyst Keiko Cadby, factors eroding buyer power include rising prices and high demand, which are forecast to continue increasing during the next three years, along with high market share concentration and low availability of substitutes. Nonetheless, intense vendor competition, low switching costs and changes in regulation give buyers a degree of leverage over suppliers.
Rising prices are largely the result of patent activity. Patents allow drug manufacturers, such as Bristol-Myers Squibb Company, Gilead Sciences Inc. and GlaxoSmithKline PLC, to monopolize the research, development, production and sales of antiviral drugs for several years, setting premium prices and limiting production to their own facilities. Soon after patent expiration, generic brand manufacturers produce and sell versions of the drug for competitive prices, mitigating the rising average price of antiviral drugs, continues Cadby. As the fastest-growing age demographic in the United States, the rising number of adults aged 65 and older increases demand because of this demographic's widespread use of antiviral drugs. High market share concentration allows a few manufacturers to set high list prices, and the low level of substitutes stemming from patents makes it difficult for buyers to seek lower prices elsewhere.
Despite rising prices, buyers can take advantage of intense supplier competition, low switching costs and regulatory changes. Buyers can elicit deeper discounts from competing manufacturers, distributors and wholesalers by making bundle purchases and by participating in government cost-saving programs if eligible. Group purchasing organizations are a useful purchasing tool to increase buyer power by pooling member needs into larger volume purchases; however, they do not necessarily draw deeper discounts for individual buyers with large orders. If possible, buyers should combine purchase orders for antiviral drugs with other medications the supplier offers and seek and apply for rebate and discount programs if eligible. For more information, visit IBISWorld’s Antiviral Drugs procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of antiviral drugs. Antiviral drugs are medicines used to treat viral infections, such as herpes viruses, the hepatitis B and C viruses, human immunodeficiency virus (HIV) and influenza A and B viruses. Unlike antibacterial drugs, which may cover a wide range of pathogens, antiviral agents tend to be narrow in spectrum and have limited efficacy. Suppliers of antiviral drugs include manufacturers, wholesalers, distributors and pharmacies.
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
About IBISWorld Inc.
IBISWorld is one of the world's leading publishers of business intelligence, specializing in Industry research and Procurement research. Since 1971, IBISWorld has provided thoroughly researched, accurate and current business information. With an extensive online portfolio, valued for its depth and scope, IBISWorld’s procurement research reports equip clients with the insight necessary to make better purchasing decisions, faster. Headquartered in Los Angeles, IBISWorld Procurement serves a range of business, professional service and government organizations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com or call 1-800-330-3772.