Managing Sales and Marketing Expense - The New Source of Competitive Advantage
SG&A (selling, general and administrative) expenses are around 33% of global pharmaceutical sales and represent the largest cost driver in the industry.
Profit growth is squeezed by patent expiries, a reduced number of product launches and the need to maintain R&D expense for pipeline investment. Off-shoring can reduce cost long term but is both long term and likely to be limited in its impact.
Sales and marketing expense has followed the "share of voice" model for many years but now represents an expensive luxury.
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