Pharma's Problems

A blogger challenges two researchers' recent assessment of the pharmaceutical industry.

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First, it was not "me-too"

First, it was not "me-too" drugs the authors were referring mainly to - it was the reformulations like the Claritin and EPO derivatives and dosing packages intended to extend patent protection that aren't exactly pushing the innovation envelope.

The layoffs were mostly the result of mergers and the needed "synergies" to reduce costs. The raft of mergers has probably been the biggest hit to innovation investment in pharma in the last 20 years.

It's always been clear that large pharma are much more marketing organizations than research ones. If they could license in all their drugs and merely sell them, most would take that path - and many are now pretty much relying on biotech in-licensing for just that so they can reduce their own R&D overhead (i.e., jobs). Also, their need for blockbusters rather than modest success drives a lot of their efforts which make reformulations and me-too very attractive because they can address already very large markets.

The hyper-inflated billion plus dollar figures for drug development have never reflected true R&D costs per a single drug so $40-50M real costs doesn't seem all that odd (not sure about the final clinical trials). Sure it doesn't include the huge marketing, executive overhead or legal costs, or the costs for failed efforts averaged over all the efforts, but that's kind of the point.

So, I'm more inclined towards the authors' arguments and numbers than Derek's, at least to general scale.