Interesting article in Fierce Biotech today from DrugBaron author David Granger. In it, he posits that big pharma executives in a reasoned calculus still maintain a predisposition toward incremental innovaion versus going for novel, differentiated new products. Why?
Rather cynically, they are playing the odds. Basically, they can use the inherent strength of their current balance sheets -- built on years of success from incremental innovaion -- to continue subsidizing that behavior for the near term even though payers have increasingly said they won't pay for this anymore. But, even getting reduced revenues through this route is preferable to NO REVENUES from a drug that crashes and burns in phase III before ever reaching the market.
Thus those that stay on the incremental innovaton path are choosing to die a death of thousand cuts rather than potentially go down in flames buy crashing and burning in a phase III flameout. Nevertheless, they will face failure in the future. But, they may not have to face that failure for years at the slowly bleeding pace, where a big failure in the clinic can be instaneous and fatal (to their careers).
Wow. How depressing? DrugBaron indicates that the only way to staunch this bleeding is to aggressive cut R&D costs -- on poor performing programs -- and to make sure that you make substantive changes in your phase IIa trial designs so that you can fail fast and cheap. If you don't go that route, you ae doomed to trying to give mouth to mouth resusitation to failed drug classes like anti-amyloids or CETP inhibitors -- merrily bleeding as you go along.
Posted by Bruce Lehr July 16th 2013.