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but re-engineering in other areas is also taking place. For example, automated techniques for data processing and compiling computer assisted New Drug Applications (CANDAs) promise to take years off the development time and review process [30]. Similarly, improved systems for reporting adverse events not only will speed up reporting, but also will provide more complete information to the drug company and regulatory agencies. Successful companies of the future will be those that make quality a priority in all of their R & D operations, not just in the characteristics of their products. |
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Innovativeness is one of the most important determinants of profitable pharmaceutical products. Breakthrough products provide a novel approach to treating disease, treat diseases that were previously untreatable, or better yet, expand the size of the market by providing treatment to patients who previously could not be treated or did not seek treatment; these products are almost always profitable. |
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Given the new climate for health care reform, successful pharmaceutical companies of the future will be more focused on innovation [8]. There are several reasons for this. First, the pay-off for successful novel drugs is bigger than for me-too drugs. Whereas me-too drugs will be faced with price constraints that match the price of other marketed drugs in the same class, novel drugs will probably be given more latitude for premium pricing because there are no alternative therapeutic agents [9]. Second, consumers are increasingly unwilling to pay a premium price for a product that provides a small incremental benefit [8]. The emergence of generic equivalents and the increasing freedom of consumers to receive generic equivalents, will severely limit the attractiveness of new drugs unless they can claim some advantage for the patient. Novel agents that offer a clear advantage in efficacy, adverse event profile, or drug delivery will enjoy more flexibility in pricing. Third, it is likely that in the future at least some regulatory agencies will permit only two or three drugs in a given class [29]. Companies that are fifth or sixth to the market may have a difficult time obtaining product approval. Finally, breakthrough drugs open up new markets by providing treatment options that previously did not exist. The early success of Tagamet came from large, unexpected sales to patients who were previously untreated because they were refractory to conventional medications and those who were previously undiagnosed and/or did not seek treatment [31]. Both consumers and the pharmaceutical company benefit from breakthrough products because the market is expanded to meet an unsatisfied medical need. For these reasons, pharmaceutical companies that are first to launch an innovative drug with clinical superiority are more likely to be successful [8]. |
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