Innovate or Perish: Managing the Enduring Technology Company in the Global Market

Current Woes of the Pharmaceutical Industry

Just as the star of the biotechnology industry has ascended in the last decade, the classical pharmaceutical industry has come under attack from many quarters, not least from investors who seen poor or no returns. These same investors used to view the industry as a safe haven, especially in a bear market. By the simplest measure of success, annual new drug approvals, there is no doubt that the industry has had a decade of really poor and worsening performance. This begs the fundamental question: Is lack of innovation driving the industry to a crisis point, or is the industry passing a crossroads from which it will emerge stronger and more capable of delivering new medicines to meet great unmet needs and growing global demand?

The Broken Pipeline

Innovation Gap

The pharmaceutical industry is emerging from two tumultuous decades that have rocked the once proud and successful industry to its core. Just as the costs of adapting to new technologies and new regulations have spiraled, the industry has struggled to maintain the high profitability, research and development (R&D) momentum and balanced pipeline growth that it enjoyed in the mid-to-late twentieth century. Although still highly profitable, thanks to the unparalleled success of a score or more blockbuster drugs, the productivity of the industry as measured by new drug approvals has halved in less than ten years. This productivity gap has been widely dubbed The Broken Pipeline (see ...