Executive Briefings

What Does the Pharmaceutical Industry Have to Teach Tech Companies and Others?

Big Pharma has faced challenges that the Web industry is only starting to comprehend. Drugs can take years to design, test and manufacture. Accordingly, spending to search and develop pharmaceuticals is very high overall: According to the European Union, five of the world's top 10 companies in R&D spending are in drugs or biotechnology. (Among traditional technology companies, only Microsoft, Nokia and Samsung feature in the list.) The expenditure amounts to a far greater proportion of total turnover-Pfizer spends around one seventh of revenues on research, while Apple spends about a dollar on R&D for every 13 it brings in.

And where the planet's electronics giants spend billions to fight piracy and patent infringement, pharmaceutical companies are rapidly adjusting to the fact that they receive only 12 years before patent protection ends and other companies can introduce generic drugs. Imagine a situation in which Windows 98 were already old enough to be forcibly open-sourced today for an idea of how disruptive that might be.

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Big Pharma has faced challenges that the Web industry is only starting to comprehend. Drugs can take years to design, test and manufacture. Accordingly, spending to search and develop pharmaceuticals is very high overall: According to the European Union, five of the world's top 10 companies in R&D spending are in drugs or biotechnology. (Among traditional technology companies, only Microsoft, Nokia and Samsung feature in the list.) The expenditure amounts to a far greater proportion of total turnover-Pfizer spends around one seventh of revenues on research, while Apple spends about a dollar on R&D for every 13 it brings in.

And where the planet's electronics giants spend billions to fight piracy and patent infringement, pharmaceutical companies are rapidly adjusting to the fact that they receive only 12 years before patent protection ends and other companies can introduce generic drugs. Imagine a situation in which Windows 98 were already old enough to be forcibly open-sourced today for an idea of how disruptive that might be.

Read Full Article