The Four Horsemen of the Pharmapocalypse: Manufacturers 🐎 🏭 We start our exploration of the #pharmaceutical industry with the drug manufacturers. 🌡️ These companies are responsible for the research & development of new drugs and manufacturing drugs that gain regulatory approval. My next couple of posts will dig into the earnings results of one of the largest drug companies in the world, Eli Lilly and Company, to see how these companies operate. 🔍 Eli Lilly earns tens of billions of dollars each year on the sale of its drugs for #diabetes, #cancer, #pain, and #neurodegeneration. Today, we’ll explore the company’s spending on research & development, as pharmaceutical companies live or die based on their ability to discover and gain approval for new drugs. 💊 Eli Lilly plans to spend $9 billion this year on the research and development of new drugs. That’s a lot of money!!! 💸 Eli Lilly’s shareholders would only permit this level of spending if they anticipated a strong return on that investment. 📈 The company’s recent track record of #innovation success gives #investors confidence that this level of spending is warranted. However, new drug development is a fickle business and today’s darling can easily become tomorrow’s dog. 🎢 Drug development is a very risky business and only 14% of drug research projects will ultimately gain regulatory approval. Allocating capital to projects that succeed and away from those that fail separates the successful pharmaceutical companies from those that win. ⚖️ As a #patient with a #chronicillness, I am grateful that there is a strong economic incentive for pharmaceutical companies to continue to innovate. The reality is that without these incentives, investors would demand these companies slash their research budgets and the discovery of new drugs would be negatively impacted. Who knows where my #multiplesclerosis journey would have taken me without the drugs that have enabled me to remain productive. 🙏🚶♂️💪
Valuable perspective, hopefully they adopt more accelerated compute solutions to arrive at new drugs much faster so more folks with unique diseases can benefit even faster.
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1yI saw several drug makers fighting the Medicare drug negotiation idea. Said that they wouldn't be able to create drugs for lesser known diseases if the prices are lowered. But I understand that there is considerable government funding/NGO funding for exactly this purpose. I always see drug companies as made up of two camps of people: The innovators and life-changers who bring new treatments and cures to life; and the profit-first, shareholder-loving business people who seem to sometimes forget the mission. Like you, I am grateful for the former, as they have created treatments for my son's kidney issues that kept him from dialysis and keep him healthy today. The latter - shakin' my head - seems like where capitalism goes off the rails.