The end of Big Pharma?
Dec/06/2007 05:49 Filed in: Pharma
Business
The number of new drug applications to the FDA is down this year and this author believes that this trend will continue as the FDA requires more and more clinical evidence of product efficacy and side effects. Companies, like Pfizer, are investing hundred of millions of dollars into replacements for aging blockbusters but as those of us in the pharma industry are aware drug development is a risky business. Formulary managers are now asking for and demanding head to head clinical studies of "replacement" medications for aging blockbusters as they face pressure to reduce drug costs. Welcome to the next evolution in healthcare.
Big pharma once had cash cows on their hands and wanted to do anything to keep the profits rolling in. Once the costs of development and marketing were recouped the rest of the revenue was pure gravy and made investors and shareholders very happy. Rather than take a visionary approach and ask "what have we learned and how can we raise the bar" big pharma chose to try and a couple of cars to the gravy train. Let's combine cholesterol and blood pressure medications. Let's add an ingredient to our SSRI to make it less "painful" to have depression and use marketing to create a need. If we can't develop new medications then we'll just read the trade papers like a menu and go out an purchase smaller companies that are developing new medications. After all we now are a marketing powerhouse who is running out of new products to market.
This is the failure or leadership at the highest level of the organization. This is why so many big pharma companies have replaced their CEO's. The decisions they made, or should have made, years and years ago are now effecting the companies performance and ability to sustain growth that is expected by the Street. In the meantime pharma has become so big and bloated that they are now several layers away from listening to their customers. A physician who was working at a small biotech firm that was purchased by big pharma recently tole me "as soon as they completed the acquisition they came in and started slowing down processes and drug development to conform with marketing plans". He decided to leave the company when the acquisition was completed as the endless meetings took its toll on the ability to react with speed. In fact he had left the big pharma company to take a position with the smaller biotech because he saw it as an opportunity to do what he loved and develop clinical trials for new products without bureaucratic interference.
Leadership is many things to many people but one principle which can never be compromised is that the difference we CAN make in patients lives is enormous. CEO's would argue that in order to continue new drug development a company needs revenue and market capitalization but that is only focusing on analysts not patients. Fifty years ago, George W. had something to say on this topic. Not that George W., but George W. Merck, the son of our founder, a former chairman, and the architect of the modern-day Merck. "Medicine is for the people," he said. "It is not for the profits". Too bad pharma has forgotten this...
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