In the pharmaceutical and biotech industry most future innovation is most likely to come from the biotech sector. Biotech companies tend to be smaller, scientific based companies with one main main entrepreneur.They tend to produce extremely specific, powerful drugs that can only be dispensed at a doctor's office. This profile of biotech companies means that there is more chance for innovation because these small companies tend to focus on smaller parts of research at a time whereas large pharmaceutical companies tend to do mass screenings of chemical compounds all at once and hope to find something progressive. A company to look at is Eli Lilly. This pharma company has been investing in more then 200 small biotech companies working on innovative new treatments. There is no guarantee however that this investment in new fields is going to pay off however, this risk is necessary in order for the pharmaceutical industry to grow in the future. Innovation is going to be a major factor in the success of big pharmaceutical companies in the future. With major patents about to expire, competition from generic drugs, faltering trust in some big pharma companies and the threat of the government controlling more drug purchasing and pricing the only way for major companies to be profitable is to come up with new, groundbreaking ideas.
Brian Strom, a senior member of the Leonard Davis Institute also notes that Pharmaceutical companies need to stop focusing so much on competitive marketing and start focusing more on providing and advertising drugs that have more benefits than their competitors. This focus is called comparative effectiveness. The problem with comparative effectiveness is that it requires costly clinical trial data that in the end might not turn out in the companies favor. If the data shows that this new drug is just as effective as what is in the market now or maybe even worse then the company is back to square one.
No matter what the drug companies do now they will have to change their model in the near future in order to say competitive and profitable in the changing domestic and world market. Companies should look to biotech companies for the most innovative new products and invest in different drugs that can top the ones already out there instead of making an almost identical drug and then making the most profit through their marketing techniques. The next few years will be critical for the bug pharma companies and it will be interesting to see how they adapt to the changing drug climate.
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