What WOUld Yf)(j Do?c 1 mitvle. studio. I he vim I 1 Hen represents the dIfferene,e between a profitable and unprofitable year for a ..h,ms, the more money a makes I.ike Hollywood studios, pharmaceutical companies have to keep i..orning up with 4 ockbusters" in order to sustain profitability*. and market share. Patents last 20 . a industr rhe more "blockbuster" drugs a pharmaceutical older niay years during which time OW th ' Pharniclectit tcal contpanies cotild lose sell a patented drug during,t), tiliti,$)ta,tiriePatents espiring on many "old" bloekbtister drugs are ex ' Y Patent auressisely sell low-cost versions of those same 1 11 idin sales over the next 5 years to generic drug manufactuPrterTts"ks'iaund threat? Merck estimates that its sales reNen'Ir:igs as soon as theY're no 1°"ger patent protected How bad is the of its patent So, unless they come up v. illi um hi ., car. a cholesterol reducing drug,, dropped g2 percent the first year off have to shrink dramatically Or go out 441 business. Hie pro_ bleu) hoever. Is that drug companies are struggling to develop new drugs I I i lally's fitrmer (11) S - ' oekbuster drugs to replace lost ,ales, pharmaceutical companies will of course, is how'? Riney I aurel said, "I think the Industry is doomed f d ' I - i we on lc tange The question, 441 the need for bloekbuster drugs with blockbuster revenues, most pharmaceP'-utical fi ( nit, area that !iced,' to change is how pharmaceutical companies de‘ elo their dmrtitg,shaan,detrheitr:strdug pipeline, Because Iiiatinents ibr large-market diseases like cancer. heart disease, or depression. under this approach. o, :ono., finding drtz , 4 )(lid identity iic, man:, di ilerent chemical (ee., moleeular) treatment and treatment combinations as pospsaibn>le' re:Larder:n*1.s i ara4lk icst ,e, many as possible hoping, often through sheer numbers. to discover treatments with potential. followed by ,ich 1 i ii,sia I ti as, and then annual and potentially human trials Swinging for the fences, however, has led to many more strikeout', ikeoins f or example. Richard Pasternak, Merck's vice president of Cardiovascular Clinical Research, says. -there haven't been any new therapies that arc pi-inert to reduce death and disability, for atherosclerosis since the introduction of I eliolesterol-lowering) slat ins in the 1980s. Indeed, over the last 5 years, pharmaceutical companies spent $65 2 billion on research and development. but brought 57 percent fewer new drugs to market compared to the prekious 5-year period, Novart is i , not immune to the threats to the pharmaceutical industry like its competitors, it is struggling to bring new drugs 1() mai f.i._ I , 1 in example, (ralvus, its promising diabetes drug, which the company hoped would pros ide blockbuster sales. failed iii lat (-stage testing Profits Were down 45 percent, by nearly a billion dollars in the last quarter As a result, Ow , ,impany is, tilting 2,500 Jobs, closing research centers in Vienna and Japan, cutting management layers, and I rest! ill I tit !lig iill, ) i ollr divisions those are only short-term moves, however If Novartis is to be succe,ssffullim tItu,i‘ieong run, it must find a way to fundamentally change the way it researches new drug treatments fitit.ait Novartis doesn't blockbuster model, what should it ,I4 iihtead? Innovation Next, from great td ) a better ob of managing wmi)thrt)1\ikecre'search'tleadership 1¦ ilihin the ,, irn pa i i v , ipl:::Ist:.1:17,cuel¦ if 'tilillek'veaytilambsv‘nlielanrh)hitlehactd:qiratnwriPieatrnh:ini:1013r 'ag.set),11b) You :situt okuntisikovearp;lAiannr ynLecries tno. thestinr7ditc:;hheurtre)w7ler:dneort its i1 y i ,li `,111.11id pri)ilit,le 3 hilented perm from skills? binally, for to decades, pharmaceutical companies have Nhi411(1 il"c st" "1St° l' ' at' h kill 'Iudinigr searchers, doctors, market analysts, and managers, to assess drug potential tati'll:Ivt()riiiijgt miletivli.t'illititi‘gisitt):1;:iiikit4"I''‘Lkt:ttiliti:t1tuan'ge)arntedNionnovation desperately needed. should sou continue to use these ',nihilism:Initial teams '11 r, rr,R' oi , 'large at yarns AG, what would you do'?
t I Nsin art is d, t, Ili, blockbuster model, what should it do instead') Innovation comes from great ideas. so Questions II( -‘s iii Nov-anis do a bCtta job or managing the sources of innovation within the company? ¦,ou promote a talented person from within or go for an outsider') Should the new leader have stronger /1 skills or stronger business skills? oil tiange and innovation desperately needed, should you continue to use the multifunctional team, that have been i1R-lilarul 'rgarit!*1101 structure throughout the industry? it, iNoirartis. Radically Remaking is Drug Business. 8usirte3iii e,k- 22 June 2009, 30-15 A Grell & I 55 hafen, `1-apnnw.,, Viola Nirvana?* tier Drops 45...It s by titriefiC," 18 himutry 240),14. 9 1Am-tine/ oulastne,o, *131g PharmA Faccstinm I ,,int 11,110. u, Replace Wonders Lirutor the if all Si.reel / l S Do.nrrtiNr 2007. A1,1 whaire Novreivi 1 tan, , 1 it, er," tne Wok Sore ,/,,,,irnat. 11 Occcrnbcr 2001 A21, 1 Whaky,