Developing a structural equation model for the life cycle of generic pharmaceutical products

Abstract

Objective Product life cycle (PLC) refers to the time ranging from when a product is introduced into the market until it is taken off the shelves. Product life cycle management can guarantee product survival and prevent it from declining. The purpose of this study is to explore factors influencing the life cycle of generic pharmaceutical product and their effect sizes to shed light on better approaches for the life cycle management of such products. Method To this end, a standard questionnaire containing six dimensions and 47 items was used to collect data from 302 industrial pharmacists. The research hypotheses were tested using structural equation modeling to quantify the relationship between each dimension and its associated factors with the PLC. Key finding The results indicated that government interventions (Standard estimate (SE) = 0.63) and technology advancement (SE = 0.60) as environmental factors, quality (SE = 0.60) and price (SE = 0.62) satisfaction, patient adherence (SE = 0.68), physicians' awareness (SE = 0.64), market saturation (SE = 0.60); and demand rate (SE = 0.62) as demand factors, brand power (SE = 0.92); and availability of imported competitors (SE = 0.59) as competition factors, drug safety (SE = 0.63), product appearance (SE = 0.57); and ease of administration (SE = 0.61) as product-related factors, manufacturer reputation (SE = 0.63); and production continuity (SE = 0.64) as producer-related factors, and distributors number (SE = 0.54); and on-time delivery and availability of products (SE = 0.69) as distributor-related factors at 5% significance levels had the most effect on generic pharmaceutical PLC in Iran. Conclusion For the first time, this study offers a structural equation modeling framework for better managing the PLC of generic pharmaceutical products to help the company’s performance and survival.