General Environment Analysis of Pharmaceutical Industry

Pharmaceutical Industry: General Environment Analysis

Jonathan Horton
Arkansas State University

Professor Clint Vogus

General Environment Analysis of Pharmaceutical Industry

Abstract
This paper will cover will give the General Environment Analysis of the
Pharmaceutical Industry as researched online (Internet) and offline (course
textbook) by Jonathan Horton. The two General External Environmental
factors chosen to identify how this industry has been affected cover the
political/legal and economic aspects of the pharmaceutical industry. Within
this paper, I explained the political and legal aspect in relation to the
extreme taxes that are placed on medicinal aspects of Cannabis in the states
that the government has granted as legal. The other factor chosen is the
economic benefit of the use of the different forms of Hemp. Hemp is an
efficient crop that is easily harvested throughout different parts of the world.
Investment in this product in the industry would help hemp farmers, thus
improving the economy as well as the environment by producing more
natural products.
Keywords: medical cannabis, benefits of marijuana

General Environment Analysis of Pharmaceutical Industry

First things first, what is The General Environmental Analysis? The

general environmental analysis also can be referred to as the Six Segment
Analysis is a tool used to analyze a competitive strategy. It helps the leaders
within the company to identify the threats and opportunities within their
industry and improve their company by doing so. There are six segments of a
General Environmental Analysis, and they are: sociocultural, political/legal,
technological, demographic, economic and global. Today I am going to
discuss the economic political/legal categories within Pharmaceutical
Manufacturing.
From a political and legal standpoint, cannabis/marijuana is all natural
so this provides many advantages from an industrial standpoint. One of the
only reasons it is slow on being legalized is because of the criminalization of
marijuana is being marketed more by the government than positive and
lifesaving effects of the drug. A few states within the United States have
already legalized the use of Marijuana and believe it or not, people in
Washington favor the legalization, but investors are not big into marijuana
investment because of the negative connotation it carries along. If full
legalization would take place, drug related crimes would be reduced. Crimes
such as robbery, home invasion, petty crimes, assaults, murders, etc. would
all be reduced. Illegal distributors would also lose a large portion of their
clientele due to the fact that they are not needed anymore. The War on
Drugs would take a major victory because people who terrorize and hurt
people over the drug will no longer have a business to rely on. Often times,

General Environment Analysis of Pharmaceutical Industry

young people who are caught with small amounts of marijuana are taken to
court and labeled as a criminal within a flawed system for the rest of their
lives, potentially ruining their future over a drug that has no harmful effects.
Some of the best teachers and brightest students I have ever encountered
were very avid users of Cannabis and I would hate to see them go down a
road of unnecessary legal troubles that would ultimately limit their impact on
the world around them.
A huge positive economic and political advantage of marijuana is the
huge amount of money made from taxes. Findings from marijuana tax
collections in states that have already legalized cannabis (Colorado and
Washington) have shown to surpass the initial estimates. Imagine if a
nationwide legalization occurred. These states could bring in billions of
dollars per year in marijuana tax revenue. There would be more money to
help communities that are in need of help and can fund any other taxsponsored program.
Section 280E of the tax code states that Businesses who are
trafficking in controlled substances that are prohibited by federal law may
not utilize many tax deductions and credits available to other businesses.
Prohibitions include the rent deduction and employee expenses. Essentially
this means that businesses in the marijuana industry pay a tax rate as high
as 70 percent versus a typical 30 percent for businesses in other, less
controversial or traditional industries. There are many stipulations that come

General Environment Analysis of Pharmaceutical Industry

with running a business that provides cannabis business, one including

having to register and incorporate in states that put them on the IRS radar.
Even though this substance is technically still an illegal drug, it doesnt stop
the government from expecting businesses to pay federal taxes.
Pharmaceutical manufacturing, by definition is the process of
industrial-scale synthesis of pharmaceutical drugs by pharmaceutical
companies. Economically speaking, this is a huge industry that will always
have a demand, due to the need of modern day medicine. The reason I
chose this industry is to shed light on the medicinal uses of Cannabis. Within
this industry, its various medicinal purposes have always been documented
as positive throughout time as far back as 10,000 years ago in China during
the Stone Age. Though the years and through continuing research, some
physicians are finally prescribing this natural remedy to counteract disorders
such as relieving pain, nausea, glaucoma, movement disorders and even
some forms of cancer in place of chemotherapy. As any business would do,
especially in the pharmaceutical industry, saving money is critical. Hemp is a
crop that has massive economic benefits. For example, the seeds of hemp
contain nutritious proteins that are more economical than a far more
commonly used soybean protein. The versatility of hemp can produce any
product ranging from paper, tofu, burgers, ice cream to milk and bread to
more industrial products such as non-toxic diesel fuel, paint and lubricating
oil. The range of a Hemp plant is incredible and can be easily accessed
because wild help grow throughout the United States but the governments

General Environment Analysis of Pharmaceutical Industry

marijuana laws prevent farmers from farming hemp plants for profit.
The fact that Marijuana has proven to have various medical uses, is cheaper,
more effective, less toxic and substantially cheaper than any man-made or
synthetic element of medicine that is currently being used shows that the
bias for this amazing, natural product is mostly due to the government not
being able to regulate it and only legalize it once they tax it. Even as a nonuser, I have seen the positive effects that cannabis has on the people I love
dearly.
In conclusion, marijuana is has the potential to have a positive impact
on the economic side of the Pharmaceutical Industry but the political/legal
side of it because the government either tax the hell out of it, or just ban it
completely. The pharmaceutical industry can help deal with the negative
trend of the political/legal aspect is by continuing their research and
development of cannabis based medicine and proving that it does not
deserve to be illegal. Until then we will still have to keep buying expensive
and synthetic drugs produced by the Pharmaceutical Industry.

General Environment Analysis of Pharmaceutical Industry

References
Charles W. L. Hill, Melissa A. Schilling, Gareth R. Jones (2016). Strategic
Management
an
Integrated Approach.

Logan Yonavjak (May 29, 2016). Industrial Hemp: A Win-Win For The
Economy And TheEnvironment. Retreived from
http://www.forbes.com/sites/ashoka/2013/05/29/industrial-hemp-a-winwin-for-the-economy-and-the-environment/#5d439c9edb11

Jeffrey A. Miron (June 2005) The Budgetary Implications of Marijuana Prohibition. Retrieved
from http://www.prohibitioncosts.org/mironreport.html Accessed on June 7, 2010.
Dara Colwell (March 25, 2009) Economic Stimulus and Green Jobs Solution We need
Retrieved from
http://www.alternet.org/story/133055/hemp_is_not_pot
%3A_it's_the_economic_stimulus_and_green_jobs_solution_we_need