It is not a surprise to anyone of us that pharma industry is going through a very tough time. I am optimistic that we will go through this challenging time. However, I do think we can learn from other industries that have gone through similar hard times and have had to change, like the steel industry in the 1970s, the automotive industry in the 1980s, computers in the 1990s and last but not least the airlines post 9/11.
In many ways, the challenges faced by the pharmaceuticals industry are similar in scope to those faced by other industry sectors. Compliance is a major watchword. There are struggles with the rising costs of bringing a new product to market. And those that don’t innovate don’t survive for long. So as the drug industry faces up to a tough operating climate, what can we learn from peers in other sectors?
For a moment let us turn the clock back a couple of decades when Big Pharma was seemingly untouchable. Companies were riding high on the success of their blockbuster drugs, raking in annual sales of at least US$1 billion while spending out a relative pittance (around US$200-300 million) to bring them to market.
It was in 2004, when the global pharma market failed to reach double-digit growth for the first time in almost a decade – and predictions for future growth did nothing to quell the air of uncertainty in the Big Pharma boardrooms. To add to that ongoing agony, the industry was wrestling with a whole host of different issues including pipeline issue, pricing, quality and the regulatory challenges as well as the impact of generics. At that point the industry was at the dividing line between the heady days of 20-30 % returns to where we are now, and it was a watershed period in terms of how the industry would react.
One of the main arguments among industry professionals is that R&D operations in big pharma have been inefficient in the past decade because companies are often just too big to be controlled.
With all this turmoil, the healthcare market has been radically altered. Now our customers are becoming more aware and demanding. So we have to do whatever it takes to provide value addition for our customers and that is only “key” to survive in this tough and competitive environment.
Recent health scares have been another roadblock. In the last decade, over 15 drugs have been permanently withdrawn from the market due to safety concerns, triggering tougher regulatory scrutiny. This is making all of the regulatory agencies worldwide concerned for patient’s safety and recovery from dreadful diseases. Later, the entire pharma industry realized that the way forward was reinvention by streamlining operations and looking at new ways to carry out the most purse-draining activities – without compromising standards. Unfortunately, R&D became an obvious first target without forgetting operational cost and marketing budget.
With all the above, our mission has never been more important: to put our knowledge of health and wellness to work so that people can lead longer, healthier lives. Keeping an eye on what is happening in the market, in this issue, we have covered 2 broad topics, first of all is “Quality” which is an area of concern to both customer and manufacturer without forgetting the regulators such as US FDA and other worldwide regulatory agencies and the second hot topic covers biosimilars. As we all know small molecules are getting tougher and harder to survive in marketplace due to fierce competition. In this competitive world, the cost saving attribute is another that is driving each and every professional frantic. There is an end as to how much you can drive down the cost without compromising the Quality and value addition that the end customer is looking for.
Another area that is catching a lot attention especially in Asia is compulsory licensing. Compulsory licensing is the philosophy wherein, government compulsion authorizes generic drug makers to be able to sell lower-cost versions of branded drugs, so that more patients can get access to treatment especially in a public health crisis situation. Compulsory licensing is basically a contentious affair; globally, it’s uncommonly used. On the other hand, some multinational companies have granted their own licenses to low-cost drug makers for public health (and public relations) reasons, particularly on AIDS drugs for sale in Africa. The point here is that branded drug makers view that approach as an assault on their intellectual property rights but the government considers that as a moral responsibility towards their country fellows and citizens. Hopefully, we will be able to cover this and some other similar hot topics of interest in pharma industry sometime later.
Dr. Jack Aurora
Chief Scientific Officer, Generic Drugs for Hisun Pharma Co., Ltd., China
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