Big Pharma faces big problems

“Over the next few years, the pharmaceutical business will hit a wall.” That’s how a major Wall Street Journal article begins (6 December 2007). The wall sits at the year 2012. The industry is “doomed, if we don’t change,” says Eli Lilly & Co. Chairman Sidney Taurel. The problems:

  • Patent protections for the industry’s top-selling drugs will expire, allowing lower-priced generics to rush in. “Generic competition is expected wipe $67 billion from top companies’ annual U.S. sales between 2007 and 2012.”
  • The industry’s science engine has stalled. “The century-old approach of finding chemicals to treat diseases is producing fewer and fewer drugs.” New blockbusters are lacking.

The industry is still profitable and will continue to produce new drugs — but “at too slow a rate to sustain its size and cost structure.”

That explains the recent spate of layoff announcements.

The future is said to be biotechnology (vs. chemicals) to develop drugs to treat diseases, which is why pharmaceutical companies are snapping up biotech companies and/or creating in-house biotech units. (They’re also getting into the generics business.)

By the way, this paradigm shift is bad news for chemists. See: “As Drug Industry Struggles, Chemists Face Layoff Wave,” The Wall Street Journal (11 December 2007).

Update: A new study says there are too many pharmaceutical sales reps taking up physicians’ time.

More wild cards

Following up on my recent discussion of wild cards — i.e., low-probability but high-impact developments in the future — here are five wild cards discussed in brief reports by Social Technologies LLC:

Recorded Lives: Lifelogging, the use of information technology to comprehensively record and archive a person’s experiences, could become a mainstream practice, due to declining hardware costs and rising consumer interest. Life recording would build on the trends witnessed in current blog, online photo album, and video journal Web sites. (Brief GL-2007-50) Additional research here and here.

Bye-Bye Bees: Colony collapse disorder (CCD) — the disappearance of honeybees from commercial hives — is alarming but probably temporary, most experts say. But what if CCD isn’t temporary? The long-term loss of honeybees could be calamitous for agriculture and the downstream businesses that depend on it. (Brief GL-2007-43)

Continue reading “More wild cards”