Big pharma business model needs to change

By Kirsty Barnes

- Last updated on GMT

Related tags Big pharma Big pharma firms Pharmacology

The current big pharma business model is not sustainable for the
future and will need to change, delegates heard at the recent
Financial Times (FT) global Pharmaceuticals and Biotechnology

"An effective R&D machine is the most difficult thing to create in a big pharmaceutical firm,"​ said Andrew Witty, president of Pharmaceuticals Europe for GlaxoSmithKline.

"A mixed business model is the key to giving companies the maximum chance of success."

According to Witty, big pharma firms need a broader and deeper R&D program that achieves reproducible results of a higher quality than presently.

Jean-Jacques Garaud, global head of Exploratory Development at Novartis agreed, stating: "There has been a significant shift in our understanding of drug development."

"A host of new technologies such as biomarkers that allow us to pinpoint the activity of a new target or pathway are now available to us and the use of these new technologies should be integrated into pharmaceutical company business models."

According to Garaud, the use of such technologies will help to increase drug attrition rates, in particular by improving the safety profile of early stage compounds.

Looking to the future, Witty also believes that pharma giants need to apply a greater proportionality in their selling and promotional model, with less focus on marketing and selling and more energy channelled towards R&D.

"All big pharma sales force models are the same and have not changed since 1935 - it's time they did,"​ he said.

Witty also believes that big pharma firms should "turn their hearts and minds towards a firmer commitment to ethics."

"Returns on a medicine are in relation to the quality of a medication - a great medication will offer a great return."

Dr Melanie Lee, executive vice president of R&D at UCB also highlighted the important role that outsourcing has to play in big pharma business models of the future.

"No safe havens that are resistant to change should exist within companies,"​ she said."No big company should conduct all of their own R&D and some of this should be outsourced to smaller specialist firms, along with various other function that are seen as non-core to the business."

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