Big Pharma chiefs warn of ‘sea change’ in drug industry

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Big Pharma chiefs warn of ‘sea change’ in drug industry

Home/Pharma News | Posted 04/09/2009 0 Post your comment

Product pipelines are under serious pressure as pharmaceutical companies face competition from generic rivals and smaller biotechnology groups are struggling to secure backing from venture capitalists because of the recession. The industry has seen a string of so-called mega-mergers, including Pfizer's US$68 billion (Euros 48.66 billion) deal for Wyeth, but AstraZeneca CEO Mr David Brennan will reiterate his opposition to this type of deal and claim collaborations are essential to boosting drug development.

Mr Brennan believes we are witnessing a sea change across the pharma industry according to the pre-release of his speech to Europe's Biopharmaceutical Conference in Monte Carlo.

However, Ms Tracy Staton comments in FiercePharma that he just might mean that the industry is ‘parting like the Red Sea’. On one side, there are drugmakers aiming for mega-mergers as a remedy for their ills. On the other side, companies are relying on collaboration and partnerships.

Collaboration is Mr Brennan's watchword of the day. "We are looking beyond the confines of our research and development and commercial organisations to embrace new opportunities with external partners," Mr Brennan's remarks state. "Only by changing our ways of working will we deliver sustainable levels of medical innovation over the coming years."

It makes one wonder whether Mr Brennan and sanofi-aventis CEO Mr Chris Viehbacher and even GlaxoSmithKline chief Mr Andrew Witty are hanging out together. They are certainly saying similar things about their strategies.

At the Pacific Health Summit in Seattle, USA, Mr Viehbacher said the traditional, integrated pharma model is passé. “Sure, Big Pharma is still quite good at commercialisation of med[ication]s, dealing with regulators, etc. Now, drugmakers need to be close to biotechs and academia to ‘capture some of that innovative genius’.” He dismissed the break-up-R&D-into-small-units strategy. Biotechs have entirely different cultures and working environments. "Just because you have the same size team as the size of a biotech, doesn’t mean you within pharma are like a biotech," he said.

Growing in emerging markets requires different strategies that aren't so reliant on patent protection, he pointed out. Drugmakers need a business model that allows them to be profitable in those markets, without the blockbuster-patent cycle. In the past, "We started with a medicine and looked for customers," typically the wealthiest customers. "Now, what we’re starting to do is say ‘let’s start with patients' and say ‘what are their healthcare issues on a market-by-market basis?' Where can we find a business opportunity ... It’s a much more patient-oriented, and customer-oriented approach than what we’ve had in the past."

Source: FiercePharma, Telegraph, Xconomy