Effects of Generic Substitution of Firms' Pharmaceutical Medicines as a Competitive Strategy at Chemist Outlets in Western Kenya

The pharmaceutical industry is considered one of the fastest growing industries worldwide and estimated to be worth 500 billion USD. Increasing pharmaceutical expenditures has been a common problem in many developing countries. Globalization economy provides much more serious challenges to pharmaceutical firms in African nations Kenya included. It is nearly impossible to know, measure, and boost the competitiveness of a strategic business unit in a certain pharmaceutical firm unless the competitive factors affecting it are identified in the first step. Most studies in the pharmaceutical industry have been limited to some specific fields such as research and development ability, new products launch time, acquisitions and alliances. Little has been known about the analysis of the effects of generic substitution of their medicines and the impact generated thereof. The aim of this study was to explore the effects of generic substitution on pharmaceutical firms' business strategies within the Western Region of Kenya with the Five Competitive Forces of Porter (1990) being the theory guiding the study.