The limits of scale
- August 01, 2002 Effective Executive
The difference in profitability between the top five pharmaceutical companies and the smaller pharma companies has been reducing over the last decade. The operating margins of the top five pharma companies rose by mere 1%. This was in spite of huge increase in the drug sales of the top five pharma companies. This article explains the existing organizational structures of the top pharma companies, the industry trends and challenges faced by them - and how Big Pharma, the top five pharma companies, should restructure themselves in order to face the challenged and increase their profits.