An article appearing in the NY Times today, and being amplified in PharmaGossip and Pharma Reform, re-emphasizes the mess the pharma industry is in as it hits the wall by on by (in no particular order):
- A spate of blockbuster drugs coming off patent
- A severe lack of new blockbusters coming through the pipeline
- Very much increased pricing pressure from 3rd party payers and governments
- Increased regulatory and government oversight resulting in fewer new approvals and an epidemic of manufacturing problems coming to light
According to a new Morgan Stanley report, "The operating environment for pharma is worsening rapidly." And chiming in from the Center for the Study of Drug Development at Tufts is its director, Kenneth I. Kaitlin who cheerily adds, "This is panic time, this is truly panic time for the industry." Other analysts say the industry became too dependent on the blockbuster model. Now what?
"We seem to have a systemic problem here" says Francis Collins, director of NIH. The Pharma Reform blog dourly adds that the situation was decades in the making and will take decades to turn around. It further adds, that the business model will need to be revamped to include changes along the following lines:
- Must increase operational efficiency - more productivity with less wasted cost
- Must become more responsive to healthcare market needs
- Must replace traditional sales and marketing with healthcare market embraced programs(more education/science)
- Need to be responsive to heathcare provider needs and patient well-being rather than driving solely toward Wall Street returns
- Need to provide clinically meaningful benefits over currently available therapies
All of this will require a major change in philosophy and operating models - returning more to science based approach to finding preventions, treatments and cures with much much much less focus on me-toos and trial and error matches of proposed therapies to putative disease targets. The industry needs to fix its "innovative core" and will be in trouble until it does.
Posted by Bruce Lehr March 7th 2011.