There is a fascinating interview in the FT today with Sir James Black, the scientist who helped to discover beta blockers and cimetidine, a stomach ulcer treatment. The thing I took from it was his extreme scepticism about drug company mergers, which seem to be revving up again.
Sir James view of mergers such as last week’s $68bn takeover by Pfizer of Wyeth is:
“Will they never learn? They will completely exhaust each others’ energies for two years.”
Pfizer-Wyeth is, of course, not an isolated incident. Roche has launched a hostile bid for the remainder of Genentech that it does not already own, and there is another FT story today about Sanofi-Aventis holding talks with bankers about possible mergers and acquisitions.
So Big Pharma is clearly determined to address the growth in generic competition and cost pressures from governments by getting even bigger. The fact that, as far as drug discovery goes, consolidation has been a mixed blessing at best does not appear to be deterring the drugs companies.
Sir James makes a number of interesting points about the blockbuster drug discover model, and the rush by companies to merge in order to acquire larger portfolios of drugs. One is that it is pointless to try to produce blockbusters:
“It’s a kind of obscenity. Very few of the drugs classified as blockbusters retrospectively were designed in that way. The people who know about markets can’t even predict what next year will do.”
A second point is that the push towards using genomics to create targeted drugs, which was the great hope of the industry a few years ago, has brought complexity rather than improved productivity:
“The techniques have galloped ahead of the concepts. We have moved away from studying the complexity of the organism; from processes and organisation to composition.”
