Abstract: During the last two decades, healthcare costs have escalated to unaffordable levels in almost all the countries in the World. Availability, accessibility and affordability of Drugs, as an important component of healthcare have been seminal issues for discussions and debates among healthcare planners, providers and other stakeholders. The pharmaceutical industry to meet its obligations to society need to have a relook at the way it has conducted its business in all areas of its activity, including R&D, manufacturing and marketing of its products and services and take corrective action where needed.

 
Global Pharmaceutical Industry
The global Pharmaceutical industry had a turnover of $ 875 billion in 2010 with an average annual growth rate of 6.5% during the last several years. It is estimated that the global industry will be worth over $ 1 trillion by 2014. Even during the years of economic down turn since 2008, the health sector was relatively insulated from the resultant upheavals. The inequities in global distribution of drugs are apparent when it is realised that 75% of the world’s production of drugs are consumed by 25% of the World’s population living in developed countries. However, the growth in real terms have been largely shifting to the emerging economies and markets where the growth has been between 15 to 20%, several fold higher than in the developed countries. This trend is bound to continue during the coming decade with countries of Asia-Pacific, Africa, Latin America and Central and East Europe taking the lead in terms of growth in this industrial sector. In the mature markets of U.S., Europe and Japan which account for three fourths of the overall global market, the growth has been in low single digits.

 
High Costs & Low Yield In R&D
The costs of R&D for new drug discovery and development have reached an all time high. In 2010 global spending on this activity was upwards of $ 75 billion. The top ten R&D based pharma companies spend annually $ 4 billion to $ 7 billion on R&D for new drugs. In 2010, there was not a single company which had more than one new drug approved by US FDA and launched in U.S. The same year the total number of new drugs approved by U.S. FDA was 21 of which 4 were biologicals and the rest small molecule synthetic drugs. Due to increased gestation periods necessitated by stringent regulatory systems, unexpected adverse effects and the arrival of better drugs, very often Companies are unable to recover research costs from drug sales. Added to that, the rate of obsolescence of marketed drugs is very high. The imperative for recovering costs during the relatively short period of patent validity available to the innovating company forces these companies to charge monopolistic high prices. Urgently needed are new strategies to face this challenge.