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Antibiotics Procurement Research Report Now Available from IBISWorld
Date:10/27/2013

Los Angeles, CA (PRWEB) October 27, 2013

Antibiotic products have a buyer power score of 3.3 out of 5.0. A high score indicates a competitive advantage for the buyers. The score reflects current negative pricing trends and moderate rate of bargain power, but is positively influenced by the ease of purchasing complexity and strong purchasing confidence. According to IBISWorld procurement analyst Anna Son, “prices for antibiotics have fluctuated over the past three years as a result of rising regulatory compliance costs and generics competition”. Due to the patent expiry of many blockbuster drugs, increased availability of generic antibiotics, which are generally far less expensive than their brand-name counterparts, has driven down the average price of these products. Nonetheless, a limited number of suppliers of antibiotics that treat rare diseases have kept prices high.

The cost associated with switching suppliers of antibiotics varies depending on the type of supplier. “For example, buyers can expect lower costs associated with switching suppliers of commonly used antibiotics, such as amoxicillin, because of their instant availability and low buying lead time”, says Son. This provides buyers with the opportunity to restock their inventory in a relatively short time frame, barring contract negotiations. In this case, buyers have greater leverage in negotiating contracts. On the contrary, buyers are more likely to incur higher costs when they switch suppliers of antibiotics that treat rare disease, especially when there are only a small number of suppliers of that particular drug. As such, suppliers of rare antibiotics have greater negotiating power over buyers.

Furthermore, antibiotics manufacturers typically capture high profit margins. High margins usually give bu
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