Desperately seeking innovation
An Economist article this week ("From bench to bedside,' 11/2/2006) confirms what we've seen saying on this site.
Innovation is an issue that goes to the "the heart of what ails drug companies. Large pharmaceutical firms used to be engines of innovation, but a big fall in share prices, the onslaught of generic drugs and bureaucracy from recent mega-mergers has tripped them up. Research productivity and approval rates for mass-market drugs aimed at rich consumers are falling....Big firms have grown risk averse, developing lots of imitations of blockbuster drugs and fewer novel ones."
I would put more emphasis on the bureaucracy and risk aversion, the plagues of the large oligopoly. With bigger labs and bigger R&D budgets, they get smaller returns.
On the other hand, the article argues, innovative biotech companies have been abandoned by investors as just too risky and for showing relatively few breakthroughs.
The story reports on a new investment group forming named Care Capital, which will try to put venture capital back in the biotech market. A nice thought, but there's no guarantee they won't face the same fate as earlier investors.
After a remarkable course of innovation up through the 1990s, the ever bigger drug companies have lost the magic and are emptying their pipelines with few comparable drugs to replace them.
6:37:38 PM 
|
|
