Pharmaceutical Executive-10-01-2003

Not long ago the average pharma development organization spent $100 to $200 million a year. It consisted of about 100 people working on only a half dozen compounds. Its leaders typically knew all their employees by name. There was a good deal of visibility within the organization: Managers could see from top to bottom and could make decisions aided by nothing but their own brains.

The next five years will determine whether pharma retains its position as the most profitable major industry. It will do so only if it succeeds in justifying its profit margins and the high prices that US consumers pay for its products. That will be tough. When Adlai Stevenson was running for president, an enthusiastic supporter gushed, "Oh, Mr. Stevenson, you will win the thinking man's vote.

Thanks to growth in international trade, rapid technological innovation, and a willingness to share intellectual property (IP), the number of corporate cross border alliances has grown steadily.

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