Market uptake Continuum
Academy > System Dynamics
Market uptake enables pharmaceutical companies to spend on R&D in a long run. Innovations are generating value. However this initial value is immediately reduced to some extend by cost concerns. Value leads primarily to market uptake and secondarily to costs which will induce new regulations. Generics are promoted by regulations and will lower the need for further regulations. A low or declining GDP or especially an economic crisis will lead to immediate austerity measures. In a long run Market uptake and Regulation are balanced favoring Market uptake. (red = reinforcing loop; blue = balancing loops)
Background
Health Policy provides R&D incentives for a better future health and regulates pharmaceutical prices to maintain affordability. There is a slight imbalance as drug costs are growing over time.
Methodology
Qualitative,dynamic Cause-Effect Relationship-Model. Sum up of all direct and indirect impact factors on pharmaceutical Market uptake (x-axis) by using a short (1-2 yrs.), middle (3-5 yrs.) and long term time horizon (> 5 yrs). The y-axis values indicate the impact changes (x-values) on pharmaceutical Market uptake over time. A target factor is impacted by other factors to a total of 100%. Other factors are %-weighted according to their impact on the target factor. Results are presented as Insight-Matrix: Factors in the green area have a growing positiv impact over time; facors in the red area have a growing negative impact over time; factors in the yellow and blue are loosing impact over time or may change their impact direction.
Result
This is a long term (> 5 years) view of the Market uptake Insight Matrix. R&D spending, Innovation and Value are on the high right green corner which means increasing impact over time. Regulation has still a negative impact but is declining over time. Costs are moving to the neutral or very small positive zone. The reason is that costs are directly associated with value. Interestingly the impact of Generics is almost neglectable over time. Also in real life it is hardly to see a link between Generic Market share and Market uptake of Innovations.
