[Ip-health] Drugs industry economics 'not sustainable' - report

[Judit Rius Sanjuan]

Thank you Tahir.

The mailing IP-health does not accept attachments but you can download
the report here:
http://www.pwc.com/extweb/pwcpublications.nsf/docid/91BF330647FFA402852572F=
2005ECC22


Tahir Amin wrote:
>  -- -- [ Picked text/plain from multipart/alternative ] A copy of the
>  report is attached. The suggestion of reducing patent life for
>  me-too's/new formulations (pg 8) is noteworthy. However, that is
>  clouded by the idea of increasing patent terms to 25 years (or even
>  50 years for groundbreaking vaccines provided they are sold at
>  universally affordable prices) to incentivise more innovation for
>  creating novel (which is not defined) products to serve unmet medical
>  needs.
>
>  Tahir
>
>  Initiative for Medicines, Access & Knowledge (I-MAK)
>
>
>  Drugs industry economics 'not sustainable' - report
>
>  *Marianne Barriaux Wednesday June 13, 2007 The Guardian
>  <http://www.guardian.co.uk/>*
>
>  The pharmaceutical industry business model is "economically
>  unsustainable", according to a report by accountants
>  PricewaterhouseCoopers. The study suggested drug companies' reliance
>  on heavy marketing of a few drugs in the hope of huge sales meant
>  they were "operationally incapable" of acting quickly enough to
>  produce innovative treatments demanded by global markets.
>
>  According to Steve Arlington, the main author, drug companies spend
>  twice as much on research and development than 10 years ago, yet
>  produce half as many drugs: 40 to 45% of medicines in phase 3
>  clinical trials, the last stage, now failed.
>
>  Shares in pharmaceutical companies have not performed well, sales and
>  marketing costs have increased, as have legal and regulatory
>  constraints and the reputation of the industry has been tarnished by
>  high-profile cases such as Vioxx, Merck's painkiller that has
>  provoked thousands of lawsuits.
>
>  Healthcare providers and payers are keen to reduce the amount they
>  pay for treatment. People are living longer but not necessarily
>  healthier lives, leading to predictions of a global pharmaceuticals
>  market that will more than double in value to =A3660bn by 2020.
>
>  Dr Arlington said the pharmaceutical industry would have to change to
>  capitalise on these opportunities, partly by shifting its investment
>  focus towards research and less on sales and marketing. "It must
>  focus mainly on the development of medicines that prevent or cure.
>  But in all cases, the drugs will have to demonstrate tangible
>  benefits and tackle unmet medical needs."
>
>  The pharmaceutical industry needed to come together with other
>  relevant players - governments, patients and investors - to discuss
>  the best way forward.
>
>  One of his suggestions was that patent protection for drugs, set at
>  about 20 years, could be extended to a much longer period to
>  incentivise the companies to produce more innovative drugs and sell
>  them at a lower cost.
>
>  The report suggested expanding the pool in which companies fish for
>  basic research - to Asia, for example, where research is less
>  expensive - or increasing cooperation with academia. It also
>  mentioned the need to transform the way companies performed R&D, by
>  focusing on building a much better understanding of the disease
>  itself to accelerate research.
>
>  There is some evidence that pharmaceutical companies are starting to
>  change their research models. GlaxoSmithKline, for example, today
>  opens a =A350m clinical imaging centre at Hammersmith Hospital in
>  conjunction with Imperial College and the Medical Research Council.
>  GSK said the facility would allow it to partner academia to use the
>  latest advancements in imaging to better understand diseases and how
>  to treat them, speeding up the development of new drugs.
>
>  The report concluded the industry would have to move fast to make
>  these changes, or face another round of mergers and acquisitions with
>  leading companies falling into private equity hands.
>
>  *Patent medicines*
>
>  The top pharmaceutical companies are expected to lose 14%-41% of
>  their existing revenues by 2012 as *patents* expire. *Pfizer* will
>  suffer the expiry of patents for *Viagra *and *Lipitor*, the world's
>  best-selling medicine, leading to the loss of about 41% of its
>  revenues. *AstraZeneca* is expected to shed about 38% of its sales
>  and *GSK* sees the patents of its two best-selling drugs - *Advair
>  *and *Avandia *- expire by 2012, with a predicted loss of 23% of
>  revenues. -- X-Attachment-Id: f_f2vo0ja1
>
>  [ PWC Pharma Vision 2020 Which path will you take.pdf of type
>  application/pdf deleted ]
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>


--
Judit Rius Sanjuan
Attorney
judit.rius@keionline.org

Knowledge Ecology International (KEI)
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