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Consolidation:
Mergers and Acquisitions (M&A): Pharma Industry will have to increasingly look at merger and acquisition options. This would help the industry to offset loss of new product options, improve their R&D efforts and improve distribution to penetrate markets. Consolidation in terms of marketing tie-ups with other firms in order to increase decibel levels in a doctor's chamber will be beneficial e.g. Glaxo & Ranbaxy for cephalexin; Ranbaxy's acquisition of Crosslands to increase strength in antibacterials.
Due to the changing therapeutic profile, the disease management techniques within the therapeutic segment are also changing, pharma industry will have to divest products from their portfolios to increase focus or they will have to acquire brands from other companies to increase strengths in a therapeutic profile. For example Cardiovascular and anti-diabetics are gaining market share while older therapeutic areas like anti-infective are experiencing a negative growth. Older antibiotics like Ampicillin/Amoxycillin are losing market shares to the new cephalosporins and quinolones as more people are developing resistance to the older drugs.
Reference Standard: In order to stay competitive in the future, industry needs to raise R&D spending to at least 5 per cent of total sales. Rising R&D costs imply that only giant corporations with formidable R&D, marketing and financial capabilities will be able to afford extensive new drug developments and commercialisations. Since it is difficult for each unit to invest in R&D, to economise on scarce R&D resources and to avoid the probable duplication, mergers of firms have been identified, as possible solutions.
It is advisable to build expertise in high growth therapeutic areas like Cholesterol and triglyceride reducers, antipsychotic, oral ant diabetics, and systemic antihistamines, proton pump inhibitors, asthma and hypertension, Alzheimer's disease, and osteoporosis, HIV antiviral fusion inhibitor, Erectile dysfunction therapies Interferon's, and Platelet aggregation inhibitors and COX-2 inhibitors. Also industry can develop combinatorial chemistry, new synthetic molecules (NCEs) and plant derived candidate drugs. Our R & D should be able to carry out pre-clinical pharmacology, toxicology, limited primary screening, human pharmacokinetics and metabolic studies to identify lead molecules , process development and Clinical Trials.
Collaborations: "Observing that science innovation occurs best in small, entrepreneurial environments, a very serious and growing challenge for our industry is to see whether we can create a small company environment in a very big company organization"- Fred Hassan, CEO Schering Plough.
Similarly in pharma sector, big pharma are plagued by poor R & D productivity, despite huge R & D budgets, whereas relatively small companies are the "hubs of innovation" and are beefing up the pipelines of Big Pharma. Hence, there is a need for collaborative research.
Clinical Trials: A number of multinationals prefer to run clinical trials in India because of the cost of clinical trials is 40-60% lower than in developed markets, easy availability and the speed with which heterogeneous gene pool patients can be recruited and tested. Worldwide, this segment is likely to reach $18 billion. Pharma Industry can capture this unique opportunity to become a leading center for clinical trials. The tie-ups with MNCs can be done under licensing agreements or milestone payments. For multi-center trials & clinical evaluation, pharma industry should provide a strong base considering the real availability of clinical materials in diverse therapeutic areas.
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