July 23rd, 2009
05:28 AM GMT
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If you want to make money in the pharmaceutical industry, you must be looking for the next Viagra. Or the next Prozac. Or the next Botox.

In short, if you want to extend the financial life of your pharmaceutical company, you focus on extending the quality of life for potential consumers – not necessarily the duration. Chronic ailments are rainmakers – acute illnesses such as Swine Flu, or H1N1, typically are flashes in the pan and not worth the R&D expense, researchers say.

“There haven’t been that many new drugs out there for acute diseases,” Dr. Robert C. Liddington, director of the infectious disease department at the Burnham Institute for Medical Research in California, told me shortly after H1N1 broke out.

“One reason for that is the poor business model – it’s hard to make money curing people,” he said. “But influenza is big enough and there is big enough market use.”

A big reason companies like GlaxoSmithKline and Roche can sell H1N1-related treatments is that governments are stepping in to create a market, said Joseph Giambrone, a professor at Auburn University in Auburn, Alabama.

“They don’t make a lot of money on vaccines … if they come out with an influenza vaccine and it mutates (into a resistant strain) that’s $100 million down the tube,” Giambrone said. “It’s not a cheap process.”

The way vaccines are made hasn’t changed dramatically in 40 years, and production time literally comes down to a chicken-and-egg question: Live cultures have to be harvested in eggs, which requires a whole lot of microbe-free chickens.

More promising – and faster – vaccine production methods and treatments are being researched. But until then, expect to hear more breakthroughs on depression or dermatology. Acute diseases? Sorry, no shareholder value there.

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Filed under: BusinessH1N1


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