Pharmaceutical Industry Is Unappreciated By Society

Bayer’s chief executive, Marijn Dekkers really underscores a major problem that the Pharmaceutical industry faces - they are unappreciated by society.
The article in Clinical Professionals goes on to say (quoting Dekkers):

"...one of the fundamental problems is society’s 'general lack of appreciation for innovations.' If a patient has a serious illness and is doing better following treatment with a drug, 'he will obviously thank his doctor and maybe praise the hospital too.' However, 'it rarely occurs to anyone to thank the inventor and manufacturer of the medicine'."

The lack of appreciation for the effort of the Pharma industry is a major issue.
And this is a problem that the Pharma industry needs to seriously address.

More on the FDA's problem with Innovation

I posted earlier this evening about the problems many industry experts - and even people within the FDA - feel the Agency will continue to have with regards to dealing with the ongoing innovation within the Drug and Medical Device industries.
After posting to my blog - I came across this quote which I think sums up what ultimately may be the biggest problem the agency faces.

“I always remind people, the easiest way to lose a civil service job at the FDA is to push the approval of something that is later found out to have a problem.”
- Carl Weissman, CEO of Accelerator

To a certain extent - that sort of "risk-averse" attitude is probably the biggest stumbling block the FDA faces.

FDA and Medical Innovation

Andrew Von Eschenbach wrote an interesting article in the Wall Street Journal last Tuesday.
You can view the article here. (Subscription required)
The article addresses the issue that the FDA is, unfortunately, woefully unprepared for the new world of Drug Development.
As Mr. Von Eschenbach writes, even FDA Commissioner Margaret Hamburg:

conceded to Congress in 2010 that 'the FDA is relying on 20th century regulatory science to evaluate 21st century medical products.'

And one of the major problems is that the FDA's inefficiency in evaluating new drugs, devices etc. ultimately leads to significantly higher costs for new drug and device development.

Von Eschenbach goes on to say:

The Tufts Center for the Study of Drug Development has reported that clinical trials from 2003-2006 were nearly 70% longer than those from 1999-2002. Longer (and more complicated) trials have led to skyrocketing drug-development costs. High costs discourage investment in much-needed new therapies for conditions like obesity, diabetes and heart disease.

This is not a critique of the FDA itself.
They are doing what they can with the tools they have.
But the bottom line is that Congress and the Obama Administration need to make modernization of the Agency a priority because not only the health of our economy - but our very own health - is at stake.

Roche warns of counterfeit vials of best-selling cancer drug Avastin

Roche has issued warnings about counterfeit vials of Avastin. You can read the article here.
A major concern of a number of people I speak with in Pharma is that this sort of issue with counterfeit drugs will only get worse.
According to the article:
"Recent legislation introduced in the House would give the FDA greater resources and authority to inspect foreign drug imports. Separate legislation would create a mandatory barcode system to monitor the authenticity of all prescription drugs moving through the U.S. supply chain."
But the question is - Are these measures going to be enough?

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' ".

Reasons for Optimism

Great article in the Wall Street Journal entitled "The Coming Tech-led Boom".
You can read it here.
The article highlights some coming Technological Transformations that bode well for the U.S.
While I don't necessarily agree with every point in the article - it is nice to read something positive about the United States' long term prospects for a change.

Big Pharma's new business model

The Wall Street Journal had an excellent article on 12/27 about Big Pharma's new business model.

In the article Scott Gottleib discusses an event last November that marked the end of an era for Big Pharma - Lipitor went off patent. Lipitor was the last of the big blockbusters for the industry.

While the industry has hit a bit of a rough patch - Gottleib says things are improving for the industry overall.

In his article, Gottleib details how Big Pharma is changing the way it discovers and develops new drugs. No longer are companies simply "screening millions of random compounds against a molecular target".

Instead Companies are embracing a model where, "Drugs are designed around the individual biological receptor they're targeting rather than being screened out of a library of random compounds"

Gottleib highlights other changes in the industry. He writes:

"...pharmaceutical companies started to carve up their sprawling research enterprises into smaller, more focused teams. The right size of a research team is now said to be 20-40 people. To get at new science early, drug makers rely on collaborations with academic research teams and licensing deals with smaller biotech outfits."

Again - while the industry still has challenges to face - it nevertheless appears better days lie ahead.

Nothing Wrong With Being a Workaholic

I've been busy so I haven't had time to catch up on my reading. But I did come across an interesting tidbit.

For those of us who like to put in a long day - here is some good news:

The Wall Street Journal reported in an article in November that according to a study from the Rouen Business School in France there is nothing wrong with being a Workaholic.

The author states that:

"...workaholism – defined by work involvement, feelings of being compelled to work and work enjoyment – can actually be constructive.

As long as the compulsion to work is self-driven, it can lead to personal feelings of accomplishment (I finished that project! I solved that accounting problem!) and benefit the organization (That project is finished ahead of schedule! Our clients think we’re great!) according to Yehuda Baruch, the management professor behind the study."

So if you enjoy what you do - and you want to boost your career prospects - ignore the nay-sayers and put in the hours.

And remember - as Samuel Goldwyn once said:

"The harder I work, the luckier I get."

Biotech's Biggest Spenders for 2011

Interesting article over at Fierce Biotech on list Biotech's Biggest Spenders in 2011.
You can view the article here.

And the article makes an interesting observation comparing the size of R&D budgets for Biotech compared to Big Pharma:

"If you add up the R&D budgets for the top 15 public biotechs in the world, you'll find a tab that runs right about $10 billion. That's not small change, by any means, but to put it in some perspective, it is interesting to note that Roche, which has the largest research budget for any biopharma on the planet, spent a bit more than that last year advancing new drugs and technology."

The Holiday Season is a great time to look for a job

I was speaking with a candidate on this past Wednesday before Thanksgiving. Even though he had just recently been laid off, he told me that he figured that with the holidays coming up, that he was just going to lay low and then start aggressively start looking for a position on Jan. 2.

I told him he was making a mistake.

While there is a myth that all hiring screeches to a halt during the Holiday Season, the holidays are in fact a great time to look for a job.
In fact, in my 20 years as a Recruiter, I have consistently had my strongest billing months in Nov. and Dec.

There are a couple of reasons for this.
1- Most people stop looking for a job during the Holiday Season. They have bought into the myth that nothing will happen so they stop looking. That lowers the number of people actively looking and therefore lessens the competition.
2- There are situations, especially at companies that operate on a calendar-year basis, where a Hiring Manager is told that if he/she does not fill his/her position by the end of the year, they may lose the position.

Don't misunderstand - there are companies that essentially 'shut-down' around the Holidays.
But there are companies that are still hiring. And there still exist enough opportunities out there that anybody who stops their job search during the Holiday Season is making a big mistake.

Pharma Firms Increase Outsourcing Spending

Interesting article over at World Trade 100...The article discusses the growing outsourcing trend in Pharmaceuticals.
The article states that:
"Outsourcing deal signings in the pharmaceutical vertical grew at a faster pace than in other verticals in 2010, surging to a ten-year high that represented 81 percent growth over 2009 as compared to the overall industry average of 13 percent..."

It goes on to mention that:
"The pharma industry is a nascent adopter of outsourcing as compared to some other industries, but multiple factors have emerged that are driving adoption, and we saw strong evidence of these dynamics coming into play last year when the market peaked," says Amneet Singh, VP, global sourcing. "The spike we saw in 2010 was largely the result of pent-up demand from the recessionary economy; however, the business drivers for outsourcing adoption remain and continue to evolve. Cost pressures, a changing pharma ecosystem, emerging markets and other market forces are continuing to drive the market. Moving forward, we expect to see an increase in sourcing of drug development and research, supply chain, data management, and analytics functions."

The amount of outsourcing that we are seeing is large...and it looks like the trend will only continue.

Rallying Pharma's Rebels - article in Forbes

Very interesting article over at the Forbes Magazine Website. You can read it here.

The article discusses the ideas of Bernard Munos who had worked in sales for 30 years at Eli Lilly.
According to the article, Bernard, "has spent the past decade studying pharmaceutical innovation. He thinks he has an answer to what ails Big Pharma: Cut research and development.

That's just part of his prescription for changing how medicines are invented. Munos says the drug industry needs to spend research money in an entirely new way. Instead of chasing improvements to blockbuster drugs that help lots of people a little bit, it should focus on true breakthroughs that help patients a lot. And rather than do the research in-house, companies should close their labs and outsource the work to tiny, nimble startups that can explore bigger, crazier ideas."

The article concludes with a list of Munos' Laws:

1. Regain the trust of physicians, regulators and payers.
2. Stop chasing blockbusters, which help lots of people a little bit,
and start chasing breakthroughs, which help patients a lot.
3. Do what works. Stop trying to manage drug discovery with Six Sigma processes.
4. Lower costs with collaborative research.
5. Mitigate risk by developing lots of potential breakthroughs, not by
trying to develop projects that seem low-risk. History says the risk
is never low.
6. Don't move anything into human trials unless it is a potential breakthrough.
7. Cut research and development.

While I don't agree with everything Mr. Munos proposes, I do think he raises some very valid points.

Drug Makers Expect Tough 2011

According to an article in the Wall Street Journal, the Pharmaceutical industry is anticipating a tough year in 2011.
But our experience suggests otherwise.
Beginning in the middle of last year and continuing so far through the very early part of this year, we have seen not only a strong uptick in hiring, but attitudes overall seem to be improving in the industry.
Bottom line: The news coming out of the industry is starting to be more positive.
Hopefully the worst is behind us...........

Recruiters Rethink Online Playbook - Article in WSJ

An article in yesterday's Wall Street Journal details the decision by a number of companies to rethink how they recruit new talent.

The article opens by stating that:
"Rather than sift through mounds of online applications, they are going out to hunt for candidates themselves."

The article continues by citing the experience of SAIC:
"Inundated by online applicants, McLean, Va.-based government contractor Science Applications International Corp. plans to cut the number of job boards it uses in the coming fiscal year to six from 15 or so, says company vice president Kara Yarnot.

SAIC has asked its 125 U.S. recruiters to find candidates for analyst, engineering, and other jobs on professional social networks instead.

'It's almost a throwback to the old, dial-for-dollars method of recruiting,' says Ms. Yarnot. 'We need to reach candidates earlier, before they're being pursued by competitors.' "

It's not a surprising development. A lot of my clients have complained of being flooded with scores of resumes from unqualified candidates when they post jobs online. They feel that that job boards are generally not a good source of talent. And what is a job board but essentially an electronic version of a newspaper want ad. The simple reality is that you don't consistently find your best candidates from an ad...whether it is a newspaper or on-line advertisement. The best people are usually not actively looking.

That is not to say you can't fill a position with a great candidate whose resume you snatched off a job board. But as one of my favorite clients...a VP of R&D with a major Pharma company....used to say..."You may get lucky and fill a single position with a great candidate by simply running an ad or scouring an online job board....but you can never build a successful organization that way."

Finding good talent is a labor intensive process. It requires talking to a lot of people. It requires a lot more effort than simply following the old "Post and Pray" approach.

Pfizer continues its buying spree

This just in:
Pfizer Inc. (NYSE:PFE) and King Pharmaceuticals, Inc. (ETR:KIG) recently issued a joint statement confirming that a merger agreement had been approved by the boards of both companies, and that through this agreement, Pfizer Inc. would acquire King Pharmaceuticals, Inc. for a sum of $3.6 billion. You can read the full article here.
Apparently Pfizer is very excited about not only King's pain drug portfolio, but its pipeline as well.

Pharma layoffs near 35K in first half of 2010

Fierce Biotech has just posted an article here that contains some fairly scary statistics.
According to the article:

"The pharmaceutical industry has eliminated 34,987 positions so far this year, second only to the goverment in total number of layoffs in 2010."

As I have said before...The Pharma Industry is still a great place to work...but the industry is changing...and the environment is much more competitive.

One long time Pharma Executive said to me recently, "This industry has changed dramatically. It is very different then when I started. But I still love working in Pharma because there are not too many other places I can work where I can make something that actually can save someone's life. That feeling is what got me into the industry. And that feeling is what keeps me here."

I could not agree more....

Find Your Perfect Pharma Partner Online

Interesting article on Pharmaceutical Executive's website.

According to the article:

"At a weighted cost approaching $1.8 billion to bring a new molecular entity to market, few pharmaceutical companies have the pipelines required to replace revenues threatened by loss of patent protection. As a consequence, there are many within the industry that believe something has to significantly change about the way pharma companies innovate and develop drugs."

Increasingly Companies are expanding beyond the traditional means of finding Partners.
More and more, deals are being initiated using online relationships and networks. The article goes on:

"How do people in these organizations find each other in the new vast virtual pharma world? The old wisdom dictated that business development people worth their salt know who to call, they don't need a database. But this is no longer the case; nowadays, they can take advantage of the growing proliferation of partnering conferences, databases and consultants playing matchmaker.

Matchmaker databases include PharmaLicensing, which recruits innovators to list their assets for partnering and recruits buyers of innovation to find these assets. Thomson Reuters has recently taken this concept a step further in its Outpartnering Registry, which lets innovators list for free their drug partnering interest directly in its pipeline database, which many top pharma business development groups use to find drug licensing opportunities.

Big Pharma companies have traditionally relied on such databases to summarize and index the current state of the drug development pipeline, but, increasingly, smaller companies, venture capitalists and CROs are using such databases to find partnering opportunities."

While no deal, especially deals as complex as those in Pharma, will be done totally online, it appears that the concept of 'online networking' is continuing to extend beyond sites like Facebook and into Pharma. It truly is becoming a virtual world.

Judge's recent ruling and its impact on the Generics Industry

Interesting post by Ed Silverman on Pharmalot on the decision by US District Judge Berle Schiller to refuse to dismiss a lawsuit by consumers who allege two generic drugmakers failed to warn about side effects caused by differences in their versions of the Wellbutrin XL antidepressant.

Ed writes:
The lawsuit alleges that Teva Pharmaceuticals and Impax Laboratories became aware of the side effect issue, but failed to warn the public about differences that affected the release rate of the active ingredient. “A generic drug manufacturer is not absolved of liability because the FDA has approved its generic product,” Schiller wrote (read the ruling).

Some background: In 2003, GlaxoSmithKline released Wellbutrin XL, an extended-release form of the pill that could be taken just once daily and used a membrane-release technology, which meant the drug would seep at a controlled rate through a membrane that passed through the entire body intact, The Legal Intelligencer writes.

Since the membrane technology was patented, generic manufacturers who wanted to release a version of Wellbutrin XL were forced to devise their own methods of delayed release. Impax and Teva used a different matrix technology and their drugs achieved peak concentrations in two hours. Wellbutrin XL and generic versions made by other companies achieved this in five hours.

For patients who switched, the faster release made the drug less effective in combating depression, according to the lawsuit, which alleges neither Impax nor Teva took steps to warn doctors or patients that their versions worked differently or disclosed side effect complaints.

Bottom line - This decision obviously will have some impact on the Generic Industry. It has somewhat changed the landscape.

But the good companies in the industry will do what they have always done. They will see that the legal landscape has changed...they will adapt and make the necessary changes to deal with the changes...and they will continue to move forward.

More good news for Biotech in the Health Care Reform Legislation

Most people have been focusing on the 12 year Data Exclusivity afforded by the Health Care Reform Bill. But Forbes magazine has a great article regarding a part of the Health Care Reform bill that is not getting a lot of discussion.
In the article, the authors state:

Buried in the recently passed health reform package is a provision that provides an unusual and tremendous benefit to small and mid-sized (under 250 employees) biotech firms and their investors. This extraordinary gift from Congress (courtesy of a push by Sens. Robert Menendez, D-N.J.; Maria Cantwell, D-Wash.; and John Kerry, D-Mass.) provides a 50% tax credit for qualified biotech investments for tax years 2009 and 2010, or a grant for the same amount tax-free.
Thus a biotech company that has a tax liability can see its tax bill slashed and a business that has no tax liability can receive a nontaxable grant for the same amount. Bottom line: With this new provision a biotech business can look to put big money in its pocket immediately. Your business makes a qualified investment of $1 million and it gets a $500,000 tax credit or a $500,000 check from Uncle Sam. Wow.

This could prove to be a phenomenal boon to the industry.....

More Good News - R&D Investment by U.S. Biopharmaceutical companies is up

Fierce Biotech reports here that:

Despite a fragile economy, America's pharmaceutical research and biotechnology companies invested a record $65.3 billion last year in the research and development of new life-changing medicines and vaccines - an increase of more than $1.5 billion from 2008, according to analyses by the Pharmaceutical Research and Manufacturers of America (PhRMA) and Burrill & Company.

The article goes on to say:

While companies have been forced to make difficult business decisions, research spending as a percentage of sales remained high in 2009. Over the past nine years, America's pharmaceutical research companies have consistently invested around 18 percent of domestic sales on R&D activities.

Again, while the industry is still experiencing dynamic change, at least there are still some positive trends that we anticipate will help to set the stage for future growth within the Pharma industry.