Year 2007 might be remembered as an eventful year for the Pharmaceutical industry. I have not kept a tally but the number of layoffs and plant closures are significant. I do not believe anyone would have thought about this five years ago.
Pharma industry has had a myopic vision. They have believed in that the pipeline will always be full and the “generics” will live on crumbs. It never invested in upgrading manufacturing technologies. Simpler technologies could have prevented generics from taking over the crumbs. Crumbs are now becoming stronger, boulder and they will haunt the majors.
Unfortunately, the pipeline is sputtering and has leaks. Now the majors do not know what to do. The world needs cheaper medicines to live and generics can fill the need.
Jacob Schumpeter of Harvard said that industries go through “creative destruction” and it is a necessary part of the progress. Is the Pharma heading that way?