Posted on 06/23/2014 10:09:00 AM PDT by Oldpuppymax
Given the huge costs of bringing a drug to market, and the ticking clock of a drug’s patent protection, it is easy to understand Big Pharma’s current fascination with mergers. A case in point is the recently abandoned deal between Pfizer and UK-based AstraZeneca. Among other things, Pfizer was interested in the considerable tax savings of reincorporating in Britain; gaining access to cash “parked” overseas; and the many drugs in AstraZeneca’s developmental pipeline.
However, it was no secret that Pfizer would have cut R&D budgets, as well as employment. Indeed, on May 13, Ian Read, Pfizer’s chairman and CEO told members of Parliament that “We’ll be efficient by some reduction in jobs. What I cannot tell you is how much or how many or where. I do not expect the combined [R&D] budget will stay the same. I expect it to be lower. How much I cannot say.”
And this is not a new phenomenon. In a Bloomberg Business Week article from July, 2009, entitled “Mega Mergers Can’t Cure the Pharmaceutical Industry,” the authors note that “[M]ergers have typically contributed to declines in R&D productivity.” A report issued this month by Mizuho Bank goes further, and presents data supporting its finding that several Big Pharma firms have significantly cut R&D expenses following mergers.
Former FDA deputy commissioner, physician, and consultant Scott Gottlieb laid it out a few weeks ago in a Wall Street Journal piece...
(Excerpt) Read more at coachisright.com ...
Purdue Pharma (makers of Oxycontin) just laid off one third of their workforce and are severely curtailing their R&D. They figure it’s cheaper to buy drugs from other firms than to develop the drugs themselves.
Anti-Trust Laws....What are those?
Please. The current state of our healthcare system is *due* to the federal government “righting wrongs” in the marketplace. This includes most of the costs of developing new drugs.
More government intervention into preventing companies from surviving the caustic environment the government made isn’t the answer.
Want more R&D? Government interference via anti-trust laws aren’t the answer, deregulation is.
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