R&D CAPACITY OF PHARMACEUTICAL PRODUCTS: A COMPETITIVE ADVANTAGE OF A PRODUCER
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A comparative analysis aims to find out high tech advantage and competitive capacity of pharmaceutical industry by use of R&D capacity indicator. High tech advantage of the industry is studied by the criterion of price for 1 kg of a product: the higher the price, the higher R&D capacity. The threshold for classifying the product as high tech is taken as 10,000 to 100,000 USD per 1 kg of product (satellite). The analysis is made on a random sample of pharmaceuticals (only those manufactured in form of tablets) selected from the Ukrainian price list, which included 17 Ukrainian companies and 17 foreign companies trading at the Ukrainian pharmaceutical market. The results show that that part of pharmaceuticals leads the products of other high tech industries such as spacecraft. Competitive capacity of pharmaceutical industry is studied on a random sample of 20 pharmaceutical companies, by ratio of R&D budget to sales, using the threshold for high R&D capacity as 12 to 14% share of R&D budget in the turnover. Results show that R&D capacity of 15 companies exceeds the threshold, sometimes reaching up 30%. As for the Ukrainian manufacturers, they lose in advantage and capacity, as average price of imported pharmaceuticals at the Ukrainian market is higher than the one of domestic manufacturers, although domestic products can be found, which approach the world price level. That is, now Ukrainian pharmaceutical companies are still incapable to provide for R&D funding required to be competitive at the world market.
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