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    Home > Active Ingredient News > Drugs Articles > A weak economic model of gold mining in pharmaceutical industry

    A weak economic model of gold mining in pharmaceutical industry

    • Last Update: 2015-05-18
    • Source: Internet
    • Author: User
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    Source: U.S - China Pharmaceutical source may 18, 2015 [news event]: David Grainger, a famous biopharmaceutical investor, wrote an article today warning the so-called gold rush economy of the pharmaceutical industry )The model is very fragile, and the current big pharmaceutical factory is compared to the inefficient dinosaurs Once the mammals with more efficient energy use appear, the dinosaurs will be extinct due to the loss of competitiveness [drug source analysis]: we just discussed the pharmaceutical industry's lack of attention to capital efficiency and cost saving a few days ago The so-called gold mining economy refers to the pattern of finding gold at all costs Because once the gold mine is found, the return is very large, so a small number of successful enterprises will get a huge return But the problem is that most companies can't find gold, so if all companies go to the next sovaldi at all costs, a large number of companies will inevitably go bankrupt The consolidation and contraction of the pharmaceutical industry over the past 15 years seems to prove this The names of Schering Baoya and Wyeth, which used to be very popular, no longer exist GSK is not a single name but an abbreviation of three major companies Some departments of Pfizer and Sanofi, like Russian dolls, have been acquired by more and more large companies for many times The new generation of children may not know that Kodak, 3M and cleaning were once part of the pharmaceutical industry The cost of the pharmaceutical industry is huge Last year, taftz gave the latest data of $2.6 billion per new drug, while the profit margin and return on investment of the pharmaceutical industry are declining At present, the return on investment of many companies has been lower than the cost of capital, which is unsustainable Even though the whole industry is vulnerable due to huge investment and limited return, any relatively small irresistible environmental change may bring disaster to the pharmaceutical industry The most predictable change now is the inevitability of the payment sector's restrictions on drug prices If the price of all new drugs is forced to fall by 20%, will the pharmaceutical industry survive? What kind of enterprise can survive such a natural disaster? Even if the payment ability of the payment department has reached the limit and the drug price must be limited, it is unlikely that all new drugs will be reduced by 20% in one stroke, but will be priced according to the value of drugs to patients and the cost savings for the medical industry For example, sovaldi can reduce liver transplantation, so it can save a lot of operating expenses, so it can be sold at a high price It's also hard to force people to cut prices if opdivo can prolong patients' lives But products like Nexium sell at a high price even when the weather is favorable, but the era of me too medicine's drought and flood has gone forever How does the pharmaceutical industry respond? Grainger suggested that the pharmaceutical industry must improve capital efficiency One of his solutions is for pharmaceutical companies to keep their weight down by a large margin, keeping only the core institutions, while outsourcing is not the core business Grainger is also a strong supporter of the kill the losers strategy He believes that it is a waste of capital and inefficient investment to spend a lot of money to increase the so-called success rate in the new drug R & D industry, which is far beyond the current technological capabilities Instead of over optimizing a project, it's better to spend limited funds on the most projects and then go to the clinic for concept verification Of course, not everyone believes in these methods The outsourcing pioneer Lilly is returning to the old model of internal R & D, and legendary CEO Vagelos is the supporter of pick the winners strategy But no matter which idea you believe, almost everyone agrees that the pharmaceutical industry must change, the world is changing, and the existing model is not sustainable.
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