Response Genetics ASP
Dr. M.D. Nickles
MBAA 664 & MBAA 674
By Timothy Rhiney
Section A. Screening within the Macro-environment: Domestic Market
To understand the implications of the macro environment on the pharmaceutical industry it is imperative to study the five cardinal influencers on the industry namely Economic, Demographic, Social/Cultural, Political/Legal and Technological forces. I will also apply Porter’s Five Forces Model for the industry layer. The pharmaceutical industry is important because it is a major source of medical innovation. The U.S. Pharmaceutical industry invests about 17 percent of sales in research and development (R&D) because R&D drives performance of individual firms and the industry structure. It is also a heavily regulated industry. Drugs are evaluated for safety, efficacy, and manufacturing quality as a condition of market access, and marketing campaigns must adhere to approved product characteristics. Drug prices also are regulated in most countries with national health care insurance systems (Shaw, 2011).
Response Genetics, Inc. was formed as a Delaware corporation in September 1999. It is a life sciences company engaged in the research and development of innovative clinical diagnostic tests for cancer. The Company currently generates revenues mainly from sales of its ResponseDX diagnostic tests, which it launched in 2008 and by providing clinical trial testing services to pharmaceutical companies.
The Economic Environment
The pharmaceutical industry is currently undergoing a period of very
significant transformation. The majority of the larger pharmaceutical companies generate high returns, thus providing them with excess cash for further rapid growth whether organic, or through mergers and acquisitions. Although size of the company on its own does not guarantee success, it gives a significant advantage, especially in the...