Pharmaceutical mergers: what WOULD you do?

[Eric Garland]

Last week, the impending merger of Pfizer and Wyeth sparked some very interesting dialogue, with voices for and against the fusion of a new pharmaceutical giant.

There was a quite a bit of negative opinion against further M&A activity in the sector. It seems that less time is spent on the positive side - what strategic decisions would you see as valuable? After all, if CI is looking to increase its value in the organization, we might do well to present opportunities for business development alongside any information on threats we must broadcast. A spoonful of sugar makes the medicine go down.

So here's my positive take. I'd love to see companies:

• Admitting that giant R&D is insufficiently productive, and working to leverage Open Source research business models
• Basing its future business model around the fact that the U.S. private healthcare system is going to fold in the next few years, and thinking up innovative pricing models
• Focusing on deep expertise in certain diseases, especially chronic disease
• Pioneering new ways to relate to doctors, accepting that the sales rep/advertising model is close to extinct

Maybe the broad, department store approach to pharma will work out. But I'd especially like to hear companies talk about how the future will affect their strategy.

What would you like to hear?

[Sally Church, Ph.D]

Good questions, Eric. I started out writing a short pithy answer and ended up with a blog post, which I attributed to you for stimulating my thoughts.

Essentially, I'd like to see Pharma and Biotech refocus on

- basic science and research, which produces innovation and rich pipelines
- less focus on yet more me-toos
- smaller business units with less bureaucracy weighing things down
- aggressively acquire licensing rights to innovative products or companies and fund their development
- accept that bigger isn't better or a strategy for the long run

Innovative pricing is already happening as you can see from NICE in the UK approving drugs where the company has been prepared to negotiate a more flexible costing model that is affordable and within budgets. Eventually, the US will slowly go the same way, the trends are certainly suggesting that will happen.