At last, a bit of perspective on tax avoidance.
Andrew Witty, chief executive of GlaxoSmithKline, says something is lost when companies switch tax domicile on a whim. The pharma boss tells The Observer:
One of the reasons why we’ve seen an erosion of trust broadly in big companies is they’ve allowed themselves to be seen as being detached from society and they will float in and out of societies according to what the tax regime is.
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 pharmaceutical industry’s effort to find new ways of discovering and developing drugs has been underway for most of this decade, but it remains a struggle.
The latest sign is the replacement of Marc Cluzel as Sanofi-Aventis’s head of research by Eliaz Zerhouni, an adviser to the company’s chief executive, Chris Viehbacher. Read more
Avandia, the GlaxoSmithKline anti-diabetes drug that could be taken off the market by the US Food and Drug Administration, is yet another illustration of the difficulties facing pharmaceutical companies in refilling their pipelines with blockbuster drugs.
Avandia’s fate seems already to have been sealed, since sales have been dropping since a 2007 study found an associated risk of heart attacks. If it was removed from the market, it would be the highest profile such event since Merck withdrew its painkiller Vioxx in 2004 on similar concerns. 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