Specialists turn to R&D in tough economic times

By Gareth Macdonald

- Last updated on GMT

Related tags: Biogen idec, Economics, Marketing, Gilead

As more and more delivery firms set their sights on the specialty pharma sector, existing specialty players are increasingly abandoning established licensing strategies in favour of developing drugs in-house to compete.

The traditional approach of specialty pharma companies like market leaders Servier, Gilead and Biogen Idec has been to buy underpromoted big pharma brands and roll out targeted marketing campaigns in order to derive revenues.

However, in recent years the cost of licensing approved products has increased markedly which, coupled with the difficult economic climate, is forcing specialty companies to rely on internal R&D to bolster pipelines and compete in the market, which grew nearly 16 per cent in 2007 to $61.6bn (€48.7bn).

Evidence for this shift is seen, according to a new report by Business Insights​, in efforts by Gilead to maintain its seven per cent share of the global market by “accelerating the discovery, development and marketing of antiretroviral drugs and by establishing a foothold in the economies of emerging markets​.”

The report also suggests that further pressure is being placed on specialty pharma by delivery specialists like Cephalon and Alza, which are using their existing technologies to develop improved formulations of existing drug products that have lost patent protection.

It seems clear that the top ten specialty pharmas like Servier, Gilead, Forest, Shire, Biogen, Cephalon, Sepracor, Lundbeck, Endo Pharma and CSL, which last year held 37 per cent of the total market, will maintain their dominant position because they have the resources to adapt to changing conditions.

How smaller specialists set on maintaining the traditional licensing approach will fare in the transforming market remains unclear.

Related topics: Markets & Regulations

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