Comments on: Big Pharma and Buyer’s Remorse http://blog.pharmtech.com/2011/04/18/big-pharma-and-buyer%e2%80%99s-remorse/ The blog of Pharmaceutical Technology magazine Thu, 09 May 2013 23:30:55 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Charles Mackay http://blog.pharmtech.com/2011/04/18/big-pharma-and-buyer%e2%80%99s-remorse/comment-page-1/#comment-36938 Charles Mackay Mon, 02 May 2011 22:06:11 +0000 http://blog.pharmtech.com/?p=4075#comment-36938 The problem with M&A is that effective communication is inversely proportional to size and that it only offers temporary relief, from the key activity which is research productivity, and the ability to pick the winners which will succeed at Phase III and make it to the market. Being too big can impede effective and timely decision making. Automation of aspects of drug discovery in the last decade has been of limited benefit, despite heavy investment by big players in the industry, since they are simply means of exploiting, not making, exciting new findings. You cannot automate innovate imagination or innovative thinking. The biggest challenge to senior executives in the industry is to create the right climate for imagination, innovation and collaboration to flourish. Costs/efficiency focus is fine but there is a difficult trade-off between this and strangling discovery pipelines, which must balance the short and long term business needs. The problem with M&A is that effective communication is inversely proportional to size and that it only offers temporary relief, from the key activity which is research productivity, and the ability to pick the winners which will succeed at Phase III and make it to the market. Being too big can impede effective and timely decision making.

Automation of aspects of drug discovery in the last decade has been of limited benefit, despite heavy investment by big players in the industry, since they are simply means of exploiting, not making, exciting new findings. You cannot automate innovate imagination or innovative thinking.

The biggest challenge to senior executives in the industry is to create the right climate for imagination, innovation and collaboration to flourish. Costs/efficiency focus is fine but there is a difficult trade-off between this and strangling discovery pipelines, which must balance the short and long term business needs.

]]> By: Tom Chapman FRPharmS http://blog.pharmtech.com/2011/04/18/big-pharma-and-buyer%e2%80%99s-remorse/comment-page-1/#comment-36786 Tom Chapman FRPharmS Thu, 28 Apr 2011 10:17:39 +0000 http://blog.pharmtech.com/?p=4075#comment-36786 Merging only saves costs , R and D makes money , big pharma always cuts R and D defensively but also the regulatory climate is more to blame for poor pipelines than mergers as it starves the individual inventor of a route to bigger companies where it sells its research, Nothing has been more destructive for clinical trials and hence new products than the EU clinical trials directive as it has both reduced the number of clinical trials by 80% and increased the cost of clinical trials by a massive amount and also delayed them by about 2 years . A doctor or pharmacist thinking of a new product would spend more time and effort overcoming the beaurocracy than trying the product even if he could afford it as the the path to registration is littered with pitfalls The moral of this is it does not matter how big you are legislation makes it almost impossible to bring to the market a NCE hence single digit figures for new products each year Merging only saves costs , R and D makes money , big pharma always cuts R and D defensively but also the regulatory climate is more to blame for poor pipelines than mergers as it starves the individual inventor of a route to bigger companies where it sells its research,
Nothing has been more destructive for clinical trials and hence new products than the EU clinical trials directive as it has both reduced the number of clinical trials by 80% and increased the cost of clinical trials by a massive amount and also delayed them by about 2 years .
A doctor or pharmacist thinking of a new product would spend more time and effort overcoming the beaurocracy than trying the product even if he could afford it as the the path to registration is littered with pitfalls
The moral of this is it does not matter how big you are legislation makes it almost impossible to bring to the market a NCE hence single digit figures for new products each year

]]> By: Ellen Hochman http://blog.pharmtech.com/2011/04/18/big-pharma-and-buyer%e2%80%99s-remorse/comment-page-1/#comment-36748 Ellen Hochman Wed, 27 Apr 2011 13:12:21 +0000 http://blog.pharmtech.com/?p=4075#comment-36748 Pharmaceutical companies may have been hoping that mergers and/or acquisitions would lead to more products and revenue, but most companies enter into mergers and acquisitions as a cost-saving strategy. Savings are found in reducing corporate jobs and possibly rationalizing manufacturing. Trimming sales forces is another source, which is very productive for pharamacuetical companies. All these have the goal of increasing profitabilty growth via cost cutting, even if top line growth is not achieved. Pharmaceutical companies may have been hoping that mergers and/or acquisitions would lead to more products and revenue, but most companies enter into mergers and acquisitions as a cost-saving strategy. Savings are found in reducing corporate jobs and possibly rationalizing manufacturing. Trimming sales forces is another source, which is very productive for pharamacuetical companies. All these have the goal of increasing profitabilty growth via cost cutting, even if top line growth is not achieved.

]]> By: Mark Boyer http://blog.pharmtech.com/2011/04/18/big-pharma-and-buyer%e2%80%99s-remorse/comment-page-1/#comment-36747 Mark Boyer Wed, 27 Apr 2011 12:05:41 +0000 http://blog.pharmtech.com/?p=4075#comment-36747 And yet no response from the boards of these companies and their shareholders in terms of demands for change and real changes in the leadership of these same companies. Clearly, a different set of skills is necessary for senior executives in the world of pharma moving forward versus the prior world. You can see why Ichan cleaned house of the top lays of management at Biogen and put multiple bankers on the board. These companies need leaders who understand how to create value. And yet no response from the boards of these companies and their shareholders in terms of demands for change and real changes in the leadership of these same companies. Clearly, a different set of skills is necessary for senior executives in the world of pharma moving forward versus the prior world. You can see why Ichan cleaned house of the top lays of management at Biogen and put multiple bankers on the board. These companies need leaders who understand how to create value.

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