Big Pharma Faces R&D, Regulatory, Political Gridlock Issues

According to Burrill & Company’s 26th Annual Report on the Life Sciences Industry—“Biotech 2012: Innovating in the New Austerity”—in 2011, “several drug companies sought to cut R&D [research and development] expenses.”

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San Francisco-based Burrill & Company (www.burrillandco.com), which released that report at the 2012 BIO International Conference in Boston, on June 18-21, believes cuts and decreased revenues are acknowledgement that R&D spending didn’t yield an adequate return on investment.

So, Burrill asks, “How will pharmaceutical companies create the new products they need to sustain themselves?” Big Pharma’s answer, Burrill notes, is what much of manufacturing has done and continues to do: essentially, try to do more with less.

An on-scene survey of biotech executives from 169 companies, at the same convention—sponsored by Washington, D.C.-based Biotechnology Industry Organization (www.bio.org)—also identified lack of available capital as a manufacturing-performance issue.  Through BIO’s backing, Alexandria, Va.-headquartered Public Opinion Strategies (www.pos.org) and D.C.-based Hart Research Associates (www.hartresearch.com) conducted the survey.

The majority of interviewed executives also said federal regulation hinders biotechnology’s performance. Making the federal regulatory approval process more efficient and transparent, without compromising consumer safety, would be helpful, 82 percent of the respondents said. And, 58 percent of the respondents said federal government regulation has had a negative impact.

But politics also presents headaches. One in four respondents identified federal, state and local taxes on the industry as a difficult challenge over the next decade. Perhaps not surprising these days, about three of four respondents cited partisan gridlock in Washington, D.C., as critical concern over the next five to 10 years.

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