Pharma Business Analysis: An Outline
When I started as a technician at Sterling Winthrop, the drug industry was stable and paternalistic. Work was done by the parent company with employees that were given de facto lifetime employment. The Waxman Hatch Act brought the end of the patent protection paradigm that had been the bulwark of the pharma business model. The industry now needed to constantly innovate. Work was increasingly done by outside contractors and internal employees were no longer as protected. The pharma business model continues to change daily.
Another type of transition has also occurred. The 1980's and 90's are considered by some the "Golden Era" of drug development, with dozens of new molecular entities approved every year. Despite annual double digit R&D spending increases, the number of NME applications and approvals has been dropping over the last 15 years. While many reasons have been given, the most likely culprits are:
- increasing regulatory requirements,
- inherent inefficiencies in the drug development process: it takes 8 to 10 years to develop a new product in an environment where the time a company's stock can be traded is in microseconds, and
- reduction of "low hanging fruit" drug targets.
Pharma related technology has exploded but the process to discover and develop new drug products has lagged behind. The companies that can tame that process, that can manage projects as well as work with (or manage) alliances will have a decided business advantage. Time and quality are critical. This will require that all the stakeholders fully understand not only their signature technologies but also the basic science and processes that produce a final drug product.
I have had the honor of working with three of the finest bioanalytical laboratories in the world. I was an integral part of their team when they reached the heights of their prosperity. Each of those laboratories eventually failed because of their inability to adjust to changing conditions. They all knew what their vulnerabilities were. In two cases, the problems could have been solved, if dealt with in time.
I am convinced that a laboratory that can package exceptional technology with drug discovery and development solutions can prosper if they are agile enough to decisively compete in the current fast paced market place. It is my goal to help create (if necessary) and align myself with such a laboratory.