As generics manufacturers grow more aggressive, will branded companies follow suit by deploying thorough patent strategies—and
crack legal teams? Will government efforts in Japan finally bring cancer out of the shadows and spur oncology sales? Will
the adoption of intellectual property rights drive pharma growth in India and help push the country to the top tier of global
economic powers? These questions point to developments—some of them flying beneath the radar—that we expect to have major
implications for pharmaceutical companies down the road. Each year, IMS identifies the key events that it believes will have
a significant impact on the global pharmaceutical market. Here, we reveal those events—the harbingers of change—that will
define and reshape the market through 2007 and for years to come.
1. Through the Golden Gates
Philanthropists Rush in Where Industry Fears To Tread
Popular wisdom holds that to commit a crime, one needs the means, the motive, and the opportunity. The same three elements
may also be prerequisites for philanthropy. In 2006, Bill Gates (the world's wealthiest person) and Warren Buffet (the world's
second-wealthiest person) found their opportunity in addressing the diseases plaguing developing nations. They also created
their own means.
The Harbinger In 2006, Warren Buffet pledged most of his fortune to charity, with the bulk of it—a record-breaking $30.7 billion—going
to the Bill and Melinda Gates Foundation, more than doubling its endowment. Shortly thereafter, the Gates Foundation announced
$287 million in grants to create 11 highly collaborative international discovery consortia that will create and evaluate novel
HIV vaccine candidates. As a condition of funding, they will be required to share information and compare results using standardized
The Change With Buffet's generosity and the Gateses' own donations and direction, more private money than ever before is going toward
world healthcare. At the same time, public–private partnerships (PPPs) have ratcheted up.
Under the Gateses' leadership, the consortia will operate without prejudice from the profit motive. They will have the benefit
of clear-eyed business acumen in setting priorities, tracking progress, and delivering results. This combination gives the
consortia an advantage over academia, international organizations, and the emerging countries themselves, which are too often
hamstrung by bureaucracy, corruption, or both. The Collaboration for AIDS Vaccine Discovery is groundbreaking—the ultimate
business model shaped by societal concerns.
The Implications The Collaboration's R&D model competes with both government institutions and the drug industry. Pharma companies can decide
that this development allows them to focus less on the diseases of developing nations. Or they can see it as having the potential
to push them out of the picture for entire classes of drugs. In still another view, they can be reenergized by the benefits
There are compelling reasons for pharma companies to watch the effort closely:
- $287 million is not a lot of money when applied to R&D. Should the Gates Foundation fail, pharma needs to be ready to pick
up the pieces and further the cause.
- Discovering a drug from scratch is a 10-year undertaking: To get quick results, the Collaboration may need to build on intellectual
property surrounding the 202 HIV medicines and vaccines in development at pharma and biotech companies. Will these companies
participate in a global mobilization against a modern plague—at the risk of losing investor confidence and impacting the bottom
- Beyond vaccines, should the Foundation succeed in developing a "me-too" drug that is less costly than current options, there
is no reason to think its impact will be limited to developing nations.
- While the Gates Foundation currently focuses on unmet needs of developing nations, its R&D could produce discoveries in other
areas altogether. If pharma does not aggressively address the problems of developing nations, it risks shutting itself out
of these broader therapeutic horizons.
Pharma can only benefit from "staying in the game" by working with the Gates Foundation and other PPPs. The alternative is
to invite the perception that the industry is indifferent to global health concerns—and to be unseated in the pursuit of lifesaving