How gloomy is the outlook among pharma execs? A new survey finds 82 percent predict big drugmakers won't be able to innovate sufficiently internally to replenish their dwindling pipelines. And this desperation will lead to still more acquisitions - 68 percent believe substantial acquisition activity will occur within the next two years and 19 percent anticipating "major activity" within the next year.
Those who believe the glass is half full think the improved economic situation means pharma should have confidence to proceed with mergers - 63 per cent think the climate for doing business and access to funding have improved in the past year. The survey of 381 pharma execs was just released by Marks & Clerk, a large patent law firm in the UK, so it's hard to know the extent to which the burgeoning European debt crisis might alter their responses.
Of course, more acquisitions will likely threaten credit ratings, as a recent report from Moody's Investor Service made clear. But even Moody's acknowleged "the trend of rising exposures to patent expirations and declining pipeline quality indicates that M&A is more likely to increase than to abate." In any event, 97 percent of those canvassed by Marks & Clerk say reliance on patent-term extensions will continue or intensify as blockbusters near the end of their patent life, and 87 percent blamed this reliance on thinning pipelines.
As to US healthcare reform, 65 percent believe margin reductions will be offset by increased sales or that innovation will benefit in the long run, and 89 percent see lasting capital will be attracted back into the US market for the long term as a result of the reforms, the law firm writes.
As for the view of Europe, 64 percent view European policymakers as “essentially hostile” towards secondary patents for follow-on drugs, and 78 percent suggest critics of secondary, follow-on drug development do not give sufficient recognition to the role incremental innovation plays in advancing medicine, the law firm writes.
Not surprisingly, 76 percent believe the European Commission’s continuing probe (see this) into patent settlements to be “concerning,” and 89 percent argue that taking full advantage of legal rights should not be classed as anti-competitive and is legitimate commercial practice. Just the same, 59 percent expect "serious fines" to be levied in the coming months by the EC, although 51 percent complain market entry has been improperly delayed and 72 percent believe the EC’s intervention would allow generics to arrive on the market earlier.