Pharma Reform

The answer to sustainable growth in the pharmaceutical industry is a continuous flow of innovative new products the market is willing to buy at the prices that make it worth doing.  Back in the 1990’s and early 2000’s, when industry R & D seemed to be able to produce whatever products were needed, it was nearly impossible for struggling small biotech companies to even get an audience with Big Pharma R & D to discuss their innovative new technologies.  The “not invented here” mentality that kept potential new treatments from Pharma R & D I believe has now come back to haunt the industry. Given the 10-15 year development time for new products, the math would suggest the 1990’s would have been a good time for risk taking exploration of innovative new technologies and aggressive licensing.  While some might suggest biotechs wanted to much for their technologies, I would argue, most never got to that stage of discussion.

Unfortunately, we will never know how many truly innovative products met their premature death at biotech companies that could not find sufficient funding to continue development or who were unwilling to give away their companies to Venture Capitalists.  Yes, the industry figured this out to some extent recently, but too late. And even now the rigors of a Big Pharma due diligence reviews are painful and beyond the resource capabilities of most small companies.  How many technologies get written off because the company doesn’t know how to present the technology to Big Pharma or because they didn’t do the studies a Big Pharma would have?

Pharma business development and R & D need to look at technologies not with a “quick to market” mentality but how they might be able to exploit technologies, perhaps even beyond where the biotech has taken the research.  Biotechs need to also be realistic about financial expectations and the value added by Pharma R & D and commercialization capabilities.   Unfortunately, the 1990’s may have been a missed opportunity but I also fear a lot of valuable technologies and innovative product opportunities may have died during the financial crisis of 2008-2009, due to Big Pharma evaluation criteria and expectations.

mike@pharmareform.com