Barriers to Entry Into the Pharmaceuticals Business

The pharmaceuticals business is, without a doubt, one of the most lucrative businesses. Yet in spite of that well known fact, we see relatively few people getting into this line of business. When you try to dig deeper, to understand why relatively few people are in the pharmaceutical business (in spite of it being a rather lucrative business), you come to discover one thing. You discover that the main reason why few people are in the pharmaceuticals business is in that there are many barriers to entry into this particular business.

The fact that only people who are qualified pharmacists can run the pharmaceuticals businesses serves as one barrier to entry into this particular field. Even where one is purely an entrepreneur, and he or she can get qualified pharmacists to work for him or her, there is still the question of technical knowledge. That is where his or her lack of technical knowledge may lead to him or her being conned, or otherwise being unable to run the business well.

The fact that the capital required to set up a pharmaceutical business is so high serves as another barrier to entry into this particular field. A proper pharmacy is supposed to have all the major drugs, and purchasing all the major drugs to stock the pharmacy calls for quite a bit of capital. On the higher end of the business, setting up a pharmaceuticals manufacturing plant calls for even greater investment, in sophisticated equipment, which requires a lot of money. And a smaller enterprise thinking of getting in that field has to remember that it will be competing against global names, such as Novartis and Pfizer.

Then there is the fact that the procedure for getting a license to run a pharmaceutical business is so long and complicated, and that serves as yet another barrier to entry in the field.