Pharma like the Auto Industry?

An interesting Op-Ed piece on Pharmalot at the end of last week compares the current woes of the pharmaceutical industry with the US auto industry. Some of the comparisons are quite striking.

It comes down to the default operation of the industry being deferred to the finance people rather than the scientists. That production of new drugs is just production of any new product and it can be quantified and put into a spreadsheet. It didn’t really work for the US automakers – the hard-earned wisdom of car designers was discarded for vehicles that minimized costs and maximized profits, with the consumer demand assumed. But it turned out that the demand was not there, that the cars Americans wanted – especially as gas prices started to rise even here – were not what GM and Chrysler were producing. So a long decline then a request for a bailout, with now some signs that the industry is at least surviving. The decline has been halted.

Certainly there have been hard times in the pharma industry too, a subject that has been written about a lot here and in other places. But the sense that finances have become more important than the mission to discover new medicines to help human health is familiar. Streamlining processes of discovery is a worthy goal, but (for example) adopting Six Sigma practices does not work because the drug discovery is partly a creative process that requires imagination and experiment – playing around in the lab. And these are exactly the sort of things that people who don’t understand the process want to cut out because they are “wasting time and money”.

The analogy does break down, partly due to the fundamental differences in the industries. Buying a new car is something that happens because cars age and become less reliable. The nearest analogy to that is drug resistance, but the aspirin you bought in 1980 is the same as the stuff you buy today (a fresher batch I would hope). While GM was losing money, the pharmaceutical companies are just not making as much money as they used to. So a bailout request is quite unlikely. Though, as a colleague pointed out, given how much has been outsourced from the U.S. I’m not sure the US government would be the place to come cap in hand. Where’s the gain to our economy? Perhaps the Chinese would be willing?

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