Big Pharma and Lessons From Detroit’s Big Three: Focus on API Manufacturing, Or Lose Your Edge to Offshore Generics

Is Big Pharma heading down the road travelled by Detroit's Big Three automakers? API manufacturing expert Girish Malhotra asks that question as he examines the future of big pharma in an op ed that we'll publish next month.  The parallels might seem striking:  for years, U.S. automakers focused on design and other features and turning out "me too" models. They only addressed fuel efficiency when the government forced them to, and by then, Japan was miles ahead. We all know the competitive pressures facing pharma today: Patent expirations and pressure from generics will create a $100 billion loss in revenues, at a time when the cost of R&D and commercialization have increased exponentially. But some lessons could, and should be learned from an unexpected source: generics companies in India and China which are developing simpler, less expensive and greener manufacturing processes.  Improving API manufacturing innovation, Malhotra believes, will go a long way to strengthening Big Pharma's ability to continue to compete in the future. "FDA clearly spelled out the situation that exists within the industry in its September 2004 report, "Innovation and Continuous Improvement in Pharmaceutical Manufacturing," he writes. "Developed countries have the highest medicine consumption requirements today. However, the needs for the developing countries are high. We are at the start on an exponential growth curve. Since the prices are controlled, generic companies from developing countries have the highest incentive to innovate, especially in the API manufacturing area and that could further alter the global pharma business." What do you think? Please write in and let us know.