I am keeping a close eye on my seven New Year predictions – and the fact that The King’s Speech has done so well in Oscar nominations is not a good sign – but one thing which appears to be falling in line is pharmaceutical research.

I stuck my neck out in December and predicted that a large pharma company would drop early-stage research and outsource it instead. Not so far, but Pfizer’s announcement that it will cut back its research operations, including closing its UK research laboratory at Sandwich, is an interesting marker. Read more

The world’s top 10 pharmaceutical companies spend around $50bn a year on research & development…but have very little to show for it.

The cost of bringing a new drug from the laboratory to market has risen to around $1bn and, in an influential study released last year, McKinsey estimated that the industry’s return on R&D over the past decade has averaged just 7 per cent, below its cost of capital. It is startling that companies boasting operating margins of 30 per cent or more are actually destroying value in their core activity. No wonder the sector has been de-rated so substantially over the past 10 years. Read more

I was naively puzzled for a long time about how people got addicted to painkillers – what was so enjoyable about having pain numbed? – until I tried Vicodin.

It was prescribed after a minor operation last year and I suddenly discovered the alluring qualities of pills such as Vicodin and Percocet that combine opiates with paracetamol. After a day or two of pleasurable wooziness, I thought it would be wise to stop. Read more

My column in the FT this week is on drugs and the developing world: Read more

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: Read more