The push of pharmaceutical research and development

Matt Buttell

With patent expiries due on some of the industry's biggest-selling drugs, pharmaceutical research and development has never been so important to the industry. What's more, in just the last two weeks, a plethora of Big Pharma companies have executed dramatic R&D strategies, highlighting just how critical the process has become.

At the start of the month, Swiss-based drug-maker Novartis announced it would be investing US$1 billion in building the largest pharmaceutical research and development research plant in China.

The move is being touted as a significant step for Novartis, who are looking to bolster their presence in China's developing market.

What's more, Novartis aren't alone. Other pharmaceutical companies are also expressing a keenness to move into markets like China, largely because these markets - dubbed "pharmerging markets" - potentially hold the key to future growth.

Novartis, for instance, is currently facing a lag in growth opportunities, sunk by the loss of exclusivity on key products, including the firm's top-selling blood pressure medicine Diovan.

As such, for both the Swiss group and Big Pharma as a whole, pharmaceutical research and development is taking a new precedence, with Novartis also revealing that it would be investing US$250 million in a second manufacturing facility in Changshu as well.

Innovation

Meanwhile, two days ago, French drug-maker Sanofi-Aventis's director general Christopher Vienbacher reached-out to Boston-based researchers and biotechnology start-ups in the US, offering "partnerships for innovation" that, he suggested, could range from investing in drugs to outright acquisitions.
                                                                                    
Vienbacher's offer came as he spoke to 200 guest at a Sanof-Aventis research site in Cambridge, Boston, where he outlined a strategy that is fast-becoming commonplace for industry giants who are seeing their own pharmaceutical research and development efforts slow down: team up with smaller and nimbler biotechs.

M&A

Elsewhere, following the completion of Pfizer's acquisition of Wyeth, the world' biggest drug-maker has announced this week that it will close six pharmaceutical research and development sites in both Britain and the US, thereby cutting a number of jobs.

While on the surface the move seems to be bucking the trend, with the company saying it will reduce its global pharmaceutical research and development square footage by 35 percent, the streamlining of R&D sites will result a series of specialised units around the world - as compared to the current 20 sites that now exist as a result of the Wyeth acquisition.

It is hoped the changes will bolster productivity and reduce costs, though, according to a Pfizer statement released on Monday, "will result in staff reduction." For the time being, however, the company has failed to elaborate on the number of jobs that will be cut.

Innovation in key, and pharmaceutical research and development needs to remain at the forefront of Big Pharma's mind. In short, the pharmaceutical industry is at a crossroads, and only by facing up to the challenges that lie ahead can truly secure a healthy development.

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