||The business model of Taiwan local pharmaceutical company is different from original pharmaceutical company. Taiwan local pharmaceutical company gets major profits by selling generic products. Recently, the profits were deeply influenced by the policy of BNHI, especially the Drug Price Survey. The drug price would be sharply cut by BNHI and the reimbursement was lower and lower after the Drug Price survey. Based on this situation, many Taiwan local pharmaceutical companies are striving diversifying their development strategies to increasing margin and profit. |
After reviewing previously articles regarding Taiwan local pharmaceutical company diversification strategies, they all had mentioned. But a few articles discussed the result of these diversification strategies. One of the main purposes of this thesis is to investigate selected local companies business performance and key successful factors based on the diversification strategies according to their annual finance reports from 2002 to 2012. The other one is to summarize the successful models to figure out the suggestions for companies that want to diversify in future.
The method of the investigation utilized the selected companies’ annual finance report including the gross sales, fixed capital investment, R&D investment, and free cash flow, and compared to each other. The finding of key successful factors of these companies are focusing on oncology therapeutic products, and economic scale of production, developing OEM model of drugs, market expansion to emerging market, penetration to self-payment drug and consumer products.
At the result, there are totally 4 suggestions and directions for local pharmaceutical company if willing to implement diversification strategy as following and hopefully workable:
1. Focus on oncology products
2. Generics products differentiation
3. Develop OEM business model
4. Market expansion to emerging market