Time Magazine Cover 1952. Pharmaceutical industry veteran George Merck famously quoted as saying”Medicine is for people, not for the profits”

Luke Timmerman recently posted a nice blog at Xconomy talking about the poor public perception of the pharmaceutical industry and what the industry can do to fix this negative image [1]. At Assay Depot we have our own thoughts about what can be done to remedy the problem, it’s a simple solution. More drugs.

There was a time not so long ago when the pharmaceutical industry was held in high esteem by the general public. When to work in the industry was prestigious, a time when the they were perceived to be selflessly pushing back the boundaries of human knowledge to bring the world in general more and better medicines. At the very height of the industry’s prowess in August of 1952 George Merck II declared on the cover of Time “Medicine is for people, not for the profits” and he meant it. It is worthy of note that he went on to preside over a 50 times increase in the company’s valuation.

Today the glory is a dim and distant memory. The public perception of the pharmaceutical industry today is one of decline, in 2010 Forbes described it as “an industry that is imploding in slow motion”, it’s a pretty good analogy when you look at the facts: over 200,000 jobs lost over the last 5 years alone, declining profits, and empty pipelines. The public perception today is of an industry that gouges old people for their prescriptions, cares little about the quality of human life, and has abandoned its duty to better the human condition in favor of profit. The truth however is far more complex.

In truth pharmaceutical industry would love nothing more than to return to its glory days of bulging pipelines and well deserved profits, the days when it added new jobs and commissioned new research centers rather than laying off and closing down. The truth is that the root of the problem lies not within the pharmaceutical industry, but in the world outside. Pharma’s problem is that the world has changed, while they stayed the same, and the model that worked to well from the 1950’s through into the 1970’s is no longer tenable in 2014.

It has been said that the sum total of human knowledge doubles every ten years (some sources put it at every 4 or 5 years) and over the last several decades biology has been at the forefront of that explosion, with tools like whole genome sequencing becoming routine tasks for an average lab rather than an efforts that require international cooperation to perform. The toolset available to a researcher today is not just greater but exponentially greater than it was 15 or 20 years ago when the pharma model was still working for us.

As we have previously discussed (to paraphrase Stephen Friend of Sage BioNetworks) “The problem is that biology today is too big for any one company” [2]. What once made the pharmaceutical industry strong – their ability to do it all in-house – is now the very thing that makes them weak. Many industry commentators including luminaries such as Bernard Munos agree that the remedy “is for the pharma industry to outsource more of its work to small nimble external organizations, to replace the high fixed cost of maintaining huge internal R&D capabilities with the lower variable cost of bringing on outside help only when it’s needed on a project”


Pharmaceutical industry is imploding in slow motion

So how does the pharmaceutical industry restore its jaded public image? The answer is by changing itself from within, by paying more than just lip service to innovation and reinventing itself on a networked innovation model more suited to the reality of todays complex and ever evolving biology. In so doing it can drive the innovation it so desperately desires, can reinvigorate it’s pipeline, and become the powerhouse it once was.

There are signs that the industry is starting to move in this direction with many pharma giants starting to engage to a greater extent with external suppliers to access the expertise they need, and critically to engage not just with the behemoth contract research organizations (CRO’s) that they have long depended on for their clinical trials, but to engage with the smaller, highly innovative, research vendors in the pre-clinical space, the space were it really matters and were the biggest impact can be made.


[1]  Timmerman, L. Things the Pharma Industry Can Do to Rebuild Real Public Trust, Xconomy Dec 2013

[2] Lustig K., Thompson, ML. Strategic outsourcing of pharmaceutical R&D – Bringing pharma and drug discovery into the information age,Chemistry Today  CROsCMOs Vol. 31(4) July/August 2013 , 14-17