Page 14 - Pharma eZine 140828

Merging to replace creaion: The great

inancial race of the pharma industry

This has cast a shadow of public controversy over
By Saniago Villa Chiappe, American-Colombian Briish AstraZeneca is being on its experimental
invesigaive journalist and documentary immune therapy cancer drugs, which, according their dealings.

ilmmaker. Saniago has published in several to its projecions, should raise its sales to USD
European, Lain American and African media 45 billion by 2023. That’s a 75 percent increase. “R&D producivity and pricing are by far the two

outlets, including the Sunday Times and Daily Overambiion? It’s debatable. What’s certain is most important issues for the industry,” says Dr.
Maverick (South Africa), FronteraD (Spain), and that good ideas have seldom been so valuable in Richard Evans, a 20-year industry veteran. He was

Revista Samuel (Brazil). He is a weekly op-ed an industry that is running low on creaivity.
senior execuive in the pharmaceuical sector and
columnist for El Espectador (Colombia).
an analyst for Stanford C. Bernstein. Bloomberg and

The largest pharmaceuicals have been struggling Insituional Investor ranked him as the number one
“I thrice presented him with a kingly crown for years to make up for a negaive feedback analyst for his coverage of the US pharmaceuical

which he did thrice refuse. Was this ambiion?”, loop in their research and development (R&D) industry. Dr. Evans currently leads the Healthcare
Shakespeare’s Antony exclaimed on the atermath departments: the more resources they receive, pracice at the consultancy irm Sector & Strategic

of Caesar’s murder. Ironically enough, Pizer thrice the less they deliver. But their troubles don’t Research (SSR).

presented AstraZeneca with a hety takeover ofer, end there. In order to balance these frustraing
which AstraZeneca did thrice refuse: some have investments they’ve secured high returns playing In May, SSR published a study itled: “Poor R&D

called this “overambiion”.
the unsustainable strategy of coninuously raising Producivity as a Self-Inlicted Injury: Who’s
the real price of their products.
Missing the Most Toes, and Why.” It revealed that

What was poised to become this year’s costliest the yield of R&D producivity for every million
merger in the pharmaceuical industry, and the Another favored, and possibly equally lawed dollars spent has been consistently falling since

move that would have made Pizer, once again, tacic, has been to iniiate a spree of mergers and about the year 2000 for companies like Johnson &
the industry’s biggest player, lopped because acquisiions (M&As). Last, and for some least, Johnson, GlaxoSmithKline, Eli Lilly, Novaris, Sanoi,

AstraZeneca’s board of directors believed the they’ve also sought to cut on tax expenses through AstraZeneca, and Bristol Myers Squibb.
USD 119 billion ofer undervalued the company.
reducion schemes or even outright evasions.

It’s no coincidence that 2014 will most likely see the

largest number of M&As for more than ive years.
There are 14 M&As announcements in the industry

for this year, compared to 10 in 2013, 6 in 2012, 9 in
2011, and 10 in 2010. Although some deals eventually

fail, such as Pizer and AstraZeneca’s, others don’t:
“Merck and Idenix have just closed a USD 41 billion

acquisiion aimed at Idenix’s hepaiis C treatments.

The most sensiive

controversies for

customers are

usually linked to

unsafe drugs or the

improper inluence

on doctors and ”

media to promote
om
certain treatments.
ss.c
pre
ox
hot
p

14 INSIGHT