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Merck & Co.: STRAGIC ANAYSIS

Barriers to Entry

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The pharmaceutical industry is a not only an extremely competitive industry to be in but also the most challenging industry to get in. “As Forbes reported in 2012, the average cost of bringing a new drug to market was between $1.3 billion and $4 billion.” (Investopedia, “What are the major barriers to entry for new companies in the drugs sector?”, 2015) In order to even penetrate the pharmaceutical industry you will need investors who are willing to put a lot of money into your company. Starting up a pharmaceutical company is by no way in any means cheap. Not only does it cost a lot to start up a pharmaceutical company but you must also get authorization by the FDA before you even make and market even a generic drug. This because it is the FDA’s responsibility to protect the public health and in order to do so they regulate all drugs that are provided to consumers.

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