Today, I’d like to talk about some of the bigger trends affecting the pharmaceutical sector. Without a doubt, there has been a huge amount of change that affects every part of the sector, from the main players in it to the smallest – change which we all need to start working out how to cope with, I think you will agree.
Take downsizing. I don’t need to remind you of the way some of the biggest corporations in this sector have pulled a lot of resources out of Europe, moving and re-aligning, opening new facilities in Asia. We’ve seen this happen across the globe, actually, so not just in Europe.
What’s driving this? The reason is because drug development – and clinical trials in particular – is cheaper to run in those countries. But when it happens, it’s unquestionably a huge shock to the present host country and the whole supply chain around that old business.
But there is a positive here, which is that pharma companies are now opening up their doors and looking for partnerships, and with a wide range of collaborators – biotechs and academia, primarily. They are getting such partners in very early in drug development, putting in the resources and helping them to develop the drugs in order to be able to get them to market, looking to buy the licensing off of them at the right stage, (e.g. maybe phase two), so that they can acquire the longevity of the patent.
That’s a model that can work very well … unless your downsizing/globalising move comes back on you. After all, there have been quite a number of drugs that have gone to market out of China, performed the clinical trials over there, and then the regulatory bodies have asked for all the clinical trials data. And then said, ‘Unfortunately, you’ve only got clinical trial data for South Africa or China or those regions, so you can sell your drug in that country fine – but you can’t sell it in Europe.’
This has delayed the opportunity for companies to bring their drug to market. More trials have had to be repeated, which affects the bottom line costs. I think boards have started to notice this trend – and it’s not one that they like. So over the next two or three years, I am convinced that we will start to see pharma giants moving back – as the research and development costs of doing it abroad starts to become less unequal with ours.
So that’s one trend – we might call it ‘reverse globalisation’. Another huge driver for change is finally getting to personalised targeting medicine. Why? Because the days of the blockbuster drug is gone! What we are searching for are drugs that will be able to deal with things like diabetes, but at the same time aid weight loss (as it has been scientifically proven that diabetes is a result of people being obese). If you could target the two together, it will be a longer life, patented drug going further forward – and this is where the really big payouts of the next few years will be for our sector, I believe.
What’s the message out of all this for you, as a professional in this market? I think companies in the marketplace need to be transparent, whoever they may be or whatever size of operation you currently are. And just as important is a most over-used, but still critical term: partnership.
To thrive in the next few years, all components of the global pharma community need to get as great at partnership as they possibly can. Look for effective strategic alliances, look to harness and exploit the fantastic IP wherever you can find it in order to harness the knowledge out there.
What do you think? Do you agree with my analysis? Share in the debate here – I’d love to hear your views.