The Effect of Mergers on Big Pharma
Friday, September 2, 2011
To cope with projected revenue loss due to increased FDA regulation and blockbuster drugs going off-patent, pharmaceutical companies have consolidated significantly over the past five years. Organizations like Pfizer/Wyeth, Merck/Schering Plough, and Schering Plough/Organon BioSciences have merged forces to improve efficiencies and increase the number of drugs brought to market.
Thani Jambulingam, Ph.D., associate professor of pharmaceutical and healthcare marketing at Saint Joseph’s University in Philadelphia, says these changes will ultimately benefit consumers, but major changes are expected in the landscape of Big Pharma.
“The pharmaceutical industry is at a crossroads,” says Jambulingam. “The ability to bring new drugs to market is the lifeline for this industry.” In the past, he says drug manufacturers were able to tweak already-patented drugs or develop fixed-dose combinations to increase revenue. Now, the focus is on discovery. “Companies are striving hard to bring new drugs to market; medicines that will have a profound affect on a large number of disease states, including rare diseases and cancer,” he says.
Jambulingam believes these organizational mergers — with a strong strategic and organizational fit — will improve drug discovery and ultimately benefit consumers. “Such mergers, whether small or large, will lead to a superior pipeline,” he says.
Within the next five years, Jambuligam expects the FDA will adapt some of its guidelines to meet the increasing consumer demand for more personalized healthcare. “The one size fits all clinical design is archaic and unsustainable in the future,” he says. “Change is necessary.”