Examination Of Impact Of Pharma R&D On Profitability

By today, in our business environment, mostly based on innovation, the potential opportunities in the pharmaceutical sector and impact of these to the national economic trends has a determining significance. This latter requires the examination of the impact of research and development activity as the most important factor to the profitability of two selected regional market leader pharma companies and presentation of how these groups handle their high operating risks which resulting from these investments. National and international importance of the pharmaceutical industry defined by not only the prominent role of application of the biochemical academic research, but the humanitarian concerns which increasingly appreciating in the global context. In the developing and overpopulated countries the risks of become massive epidemics arisen from the emergence viruses which mutating quickly and in increasingly complex forms has risen due to the scientist discoveries and more modernize preventive procedures. These facts - in view of growing efficient immune substances developing procedures - are stronger pressure on the industrial actors, with this affecting the profitability of future operations. The farming specificities and their role can be illustrated well by comparing the activities of the Central European market-leader Richter and the world-renowned Swiss Novartis which ranked number two in sales with approximately 47 billion dollar among the world-wide pharma groups in 2010. Since the comparable figures based on IFRS, it must be also mention that how the international accountant standards display these management areas. Among the examined factors, the pharma R&D activity had the highest impact on the long-term firming both individually and in comparison, but the different of the financial strategy and accounting policy as a kind of asset of risk management had no negligible. My analysis is mostly theoretical and based on quantitative methods. All the pharma companies cross-border can use my results, because they show that why need to pay more attention in this sector to the R&D in order to preserve their market position, thus to ensure multilaterally the prevention of the diseases.