Pharma Swallows A Bitter Pill 💊
Pharma's 12 largest companies have released data showing their lowest returns on R&D in over 9 years, falling to a lowly 1.9% from 3.7% in 2017. Yikes, that is a bitter pill to swallow!
Drug development has almost doubled in price since 2010 and looks set to continue at its current pace unless big pharma can come up with a solution. Peak sales of new medicines have also halved since then, giving a grim picture of higher costs and lower consumption...The feared double-whammy!
The focus seems to have shifted away from broad production to niche, specialist treatments and medications for small targeted groups of patients. By comparison, the next generation of more agile specialised biotech firms fared much better, only declining from 12.5% returns on R&D to 9.3%. It seems bigger is not always better.
The big names, such as Pfizer, Novartis & GlaxoSmithKline had better get innovating before their returns sink into the negatives. It's about time the top dogs got a shake-up!