My earlier post on this topic--
--was based on an article in The Economist. This time it's the Wall Street Journal that has discovered mostly the same set of facts.
"Over the next few years, the pharmaceutical business will hit a wall... Generic competition is expected to wipe $67 billion from top companies' annual U.S. sales between 2007 and 2012... that is roughly half of the companies' combined 2007 U.S. sales... 'I think the industry is doomed if we don't change,' says Sidney Taurel, chairman of Eli Lilly... 'The era that created the modern pharmaceutical industry is in fact over,' said Richard Evans,...pharmaceutical consultant... Pfizer is slashing 20% of its sales force, AstraZeneca is cutting 10% of its employees and Johnson & Johnson is shrinking its staff by 4%..."
Some points that seem new to this article: it is suggested that the industry's huge investment in centralized, expensive research based on discovering new molecules and then figuring out what they might be good for, is in part to blame for the dry research pipeline. It may be the case that you simply cannot do science on an assembly line. You need to understand basic biological mechanisms before you can find the next generation of new drugs. Hence, as noted previously, the industry's current love affair with biotech, both buying up biotech firms and creating in-house biotech units.
If you can't lick 'em-- as it seems that the generic manufacturers are getting ready to profit handsomely as popular drugs go off-patent in the next several years, the big companies are ramping up their own generic units to get a bigger piece of the action.
"The dearth of new products has led the industry to invest heavily in marketing and legal tactics that squeeze as much revenue as possible out of existing products." Well, duh-- hence this blog. If the companies were making windfall profits by discovering and selling new drugs that made us all healthier and that cured deadly diseases, there would be no complaints.
Martinez B, Goldstein J. Big Pharma faces grim prognosis--industry fails to find new drugs to replace wonders like Lipitor. Wall Street Journal, December 6, 2007, A1.