#pharma future

[healthmarketingcare]

Innovative Approaches for Pharma Amid Medicare Changes

Expanding Medicare’s drug price negotiation powers sends ripples across the pharmaceutical industry. With more medications set to undergo price negotiation, pharma companies are facing the reality of lower sales dollars, particularly in the Medicare market. The challenge for an industry accustomed to high-profit margins is twofold: maintaining financial health while continuing to innovate and…

Innovative Approaches for Pharma Amid Medicare Changes

[pharmtastic]

The future of Pharma?

This month's Nature Reviews: Drug Discovery has this interesting article discussing the prospects of the next five years of drug innovation (by analysts from McKinsey & Company). Oncology drugs has been the winner these past years with respect to both growth in drug sales and the number of drugs released. According to their projections, this trend is expected to continue, and will only to be followed by a mile by CNS drugs.

Also, as expected, biologics will beat small molecules in terms of growth and will be the focus of the pharmaceutical industry. An increase in new drugs approvals is also expected and could raise to about 30 drugs in 5 years. But all is not fun and sunshine, the gloomy fact remains that the current drug POS (Probabilities of success) of 8.3% will stay put (or worse, could drop to as low as 4.7%) in the next five years. Further, since these new drugs, most of which are acting on the same old targets, will have a tough task to compete with existing alternatives their annual net sales will drop dramatically from (currently) 900m to 600m by 2016.

Essentially, all Big Pharma will have managed to do is cut R&D, increase layoffs, protect their asses by increasing partnerships with other Big Pharma companies and finally somehow manage to release the same number of drugs for existing targets over the next few years.

EvaluatePharma Ltd has released another projection study of drug sales up until 2018 and believe it or not Pfizer is expected to lose its No. 1 spot to Novartis by as early as 2014 and then drop further down to third below Sanofi. This was long coming since their business strategy was essentially to remove any kind of R&D spending and that overreaching Wyeth merger did not help things either.

The star of the biotech industry, Gilead is expected to have the highest growth rate (9%) with their robust retro-viral pipeline and new combinations of existing anti-viral drugs. AstraZeneca is expected to have the worst growth rate at -5%! This could be partly attributed to their new plan of lets-layoff-our-employees-and-do-R&D-elsewhere and their now dried out pipeline. I might be a bit biased here, but it is a great idea to fund drug discovery research in an academic setting and I hope it is a great success and they prove everyone wrong.