Gary Pisano: Big Pharma Needs to Get Busy in the Lab – WSJ

Consultants, Wall Street analysts and pundits have long urged pharmaceutical companies to cut back on internal research and buy drugs from small biotech companies instead. Invoking various theories about economies of specialization and the efficiency of small firms, they’ve argued that it is cheaper and less risky to buy from the outside than to develop on the inside. This argument has been repeated so often and for so long—I first heard it in 1985—that it has almost become beyond dispute.

There’s just one problem: It’s wrong. In my own research, I compared the costs over a 20-year period of drug development at large pharmaceutical companies and biotech firms. I found no meaningful difference on average between what large pharmaceutical companies and biotech companies spent to successfully develop a drug. The blanket generalizations about biotech firms being more efficient are unfounded.

via Gary Pisano: Big Pharma Needs to Get Busy in the Lab – WSJ.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s