Pharma's Fear of Innovation

Bill Drummy wrote an interesting article in this month's Pharmaceutical Executive magazine entitled: "Innovation: Why is Pharma Scared to Death?"
Drummy discusses the irony of how an industry that is supposed to by nature be innovative, instead appears to be afraid of the risk inherent in innovation.
Drummy believes that this lack of innovation is hurting the health of the industry.
He writes that:

"According to a new report published by Deloitte, the 12 largest pharma companies saw their ROI drop by 29 percent in the last year. The average internal rate of return for R&D dropped to 8.4 percent from 11.8 percent a year ago."

Drummy opines that the reason for Big Pharma's lack of innovation is that Executive Management at these companies are fostering a risk-averse culture. And he believes that unless there are changes in attitude at the top, Big Pharma companies will continue to eschew risk, and with that, continue to stifle innovation.

I think Drummy has a point. I was speaking a couple of years ago with a mid-level executive at one of the major Pharma companies. I asked him why his company's pipeline was so barren.
He laughed and replied that, "People here are less interested in making drugs, and more interested in 'covering their asses' ".