Several articles were published in Fierce Biotech this morning that deal with the challenges faced by Big Pharma -- particularly in development -- and the resuting changes that are occurring. This is not brand new by any means but different camps are beginning to take shape. See here, here and here.
First we have Richard Barker, departing President of the Association of the British Pharmaceutical Industry, declarign that "innovation ecosystems" will be the way that Big Pharma will puruse R&D in the future. These ecosystems will consist of a network of resources internal and external to these big companies that are supposed to pump up innovation while bringing down the costs. They hopefully will also reduce risk as compared to the current "unproductive" Big Pharma R&D efforts. Many of these are collaborations between Big Pharma and academic research institutions. Pfizer, GSK and Sanofi are among companies pursuing these arrangements.
On the other hand, we have several Big Pharma players who are lookng to maintain their internal R&D investments -- in more focused efforts -- with the belief that they will now start bringing more blockbuster drugs to market in the next several years. Companies embracing this model are exemplified by Merck, Lilly and Novartis to name three. Novartis has had a recent spate of success -- although it has added the permutation of focusing development on niche areas to gain approval and then to expand out the applications for that molecule to build bigger revenue profiles. The other two players have a less proven track record and the jury is still out on their current late stage candidates.
The third and most interesting perspective is in the third Fierce Biotech article via Business Week. It argues that Big Pharma needs to work on its whole model -- not just the R&D portion. It promotes the idea that pharma get way outside the box with its current business model and think about working to satisfy its customers (patients) and not just figure out ways to commercialize drugs more cheaply. One more far-fetched idea asks what if Pfizer teamed with Wal-Mart to create a Readi-Clinic at Wal-mart powered by Pfizer" coupling Pfizer products and services to deliver to patients. These authors claim the industry needs to get solely off idea of inventions (new drugs) and get to innovations (solutions for people) -- which aren't always dependent on new inventions or technology but new models for delivering value.
Interesting to ponder.
Posted by Bruce Lehr June 3rd 2011.
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