Entrepreneurship and
R & D
The pharmaceutical industry is definitely not a friendly place for entrepreneurs. This occurs because the top players basically run the whole industry and leave little or no room at all for young, bright, new players to participate in the big game. So, how has this affected the industry? Is it having a positive or negative effect on the industry?
According to David Shaywitz from Forbes, this decline in entrepreneurship has had a negative effect. more specifically on Research and Development. It is important to remember that R&D is one of they drivers that can lead to huge potential growth. The patent cliff is forcing companies to find new medicines ir order to produce new patents, but the FDA and other regulatory organizations are definitely making it more difficult for companies to come up with new solutions. In other words, companies need the drive and the investment in research and development in order to not be affected by the current market. And, as Shaywitz tells us in his article, the fact that pharma companies are run by executives, not Doctors, Scientists, or entrepreneurs is preventing this from happening.
Executives do not share the same drive and excitement that smaller companies have towards new discoveries. This is why many, many experts agree that the pharmaceutical industry will need to leave room for smaller players to come into play; they need their ideas, their discoveries in order to come back to life after such a dramatic drop in sales after many patents expired. But, how will this happen if smaller players hold absolutely no chance in surviving surrounded by giants? David explains that the future of the industry will become one of major mergers and acquisitions. This means that Big players will need to step aside to give room to the younger, brighter, more innovative minds, in order to then buy them out. This will allow bigger companies to pursue their goal of benefitting from R&D while smaller companies will have room to grow.
All in all, the road entrepreneurship is definitely not clearly paved yet in the pharmaceutical industry. But, bigger companies will eventually have to surrender and give them space to grow; that is if they want to come back after the patent cliff.
Sources: http://www.forbes.com/sites/davidshaywitz/2011/10/23/does-big-pharma-need-entrepreneurial-leadership/
Sources: http://www.forbes.com/sites/davidshaywitz/2011/10/23/does-big-pharma-need-entrepreneurial-leadership/
Jimena, this was a very good and interesting blog post. I was surprised by the fact that the entrepreneurship has declined. and the fact that it is run by executives. Furthermore, I definitely agree with you that eventually entrepreneurship will have to grow in the pharmaceutical industry.
ReplyDeleteJimena- I truly enjoyed reading this blog post! I was also surprised that entrepreneurship has not remained steady in the pharmaceutical industry. It is a scary thought to think that because of the other "major players" younger business men are being scared off from innovation and even possible future cures! I too agree that expansion in creativity and entrepreneurs is crucial to development.
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