Is it Time for a New(Old) Pharma Business Model?

By Guy Mastrion

If you need us here at P&P to tell you that the times they are a-changin… you need more than a blog to help you out.

How many big-pharma mergers and takeovers have we seen this year? Genentech and Roche. Merck and Schering. Pfizer and Wyeth. Pipelines are dry and they need new ideas and greater efficiencies.

But then why do we keep seeing startups? Small, hungry smart entrepreneurs are focusing on one product, building them up in an all-or-nothing gamble, betting 5-10 years and millions of dollars.

Who’s going to have the better business model? The little ones or the large research organizations?

Is this something where the pharma industry will parallel the software industry, where huge successes come from relatively small organizations?

Is it possible that there’s a Google for pharma?

If Pfizer is Microsoft, who is Google?

Is this comparison even possible? It could be. But it would only work if a pharma company were to look at things in a completely different way. See, Google doesn’t sell consumers anything in a box. Firefox is an accidental success story. The tech industry works because “little” people take ideas, throw them out there, and run with them.

Could a bunch of patients get together and say, “Big pharma isn’t cutting it. Let’s form an organization that does its own research!”

Could they collect donations and actually do it? Could you have a nonprofit pharmaceutical company?

I can feel you rolling your eyes, you know.

But it’s actually not completely far-fetched. At least one large pharmaceutical organization, LEO Pharma, is run by a foundation. They’re not a nonprofit, no. But they’re not beholden to investors. Their job is to perpetuate the company and its research.

Could we try that model out again? Or figure out a way to make it even better?

LEO’s profits were up 7% last year, they market in 90 countries, and they’ve been around for over a hundred years. It seems like something’s working.

Why cant there be a Mozilla Foundation for Pharma?