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Can the inevitable rise of Generics deliver the healthcare needed?

19 Nov 13 - 12:00AM Skills Alliance  | Malcolm Silander blog

Patent cliff highlights the conflict between R&D and Generics 


A lot has been written in industry about the patent cliff, that coincidental expiry of multiple patents across big pharma. With the large R&D companies losing big chunks of their revenue streams Generics stand ready to gain. This major clash is being publicly played out in Canada with vocal denouncement of Generics from Rx&D being met with equally critical articles published in retaliation by the Canadian Generic Pharmaceutical Association (CGPA). In the end, both sides default back to the argument on ‘cost to the public’ and who offers better value to the healthcare industry and society now and in the future.


An interesting twist in this tale occurred recently when it was revealed that Canada has agreed, in principle, to a new trade agreement with Europe which grants two more years of patent protection to brand-name pharmaceuticals. In the short-term this is good news for RX&D and all of big pharma. The CGPA have retaliated that this trade agreement will be to the detriment of consumers who will have to continue paying ‘higher’ healthcare costs. However, if this really is a stop-gap, the same problem and debate still raise its head again when the new extended patents expire.


Who wins?


The big pharmaceutical companies are pouring money, clout and time into renewing their patents (and lobbying) but are also hedging their bets by acquiring Generic companies. So no matter the outcome these companies will continue to operate with huge profits. Is this David v Goliath with the huge, all-powerful big pharma trying to limit the Generics who are merely following the rules, while covering their backs by expanding into the field themselves?


What is the knock on effect of R&D pharma losing confidence in their future profit levels? It is a certainty that fewer new drugs are coming through the development pipeline. According to Ben Goldacre the heyday of continual drug discovery has reached a natural end point for current common conditions. The future seems to offer 2 clear paths: Biotech or Generic. Further reason for big pharma to defend their product range? Bring this back to the patient, we foresee a polarizing industry with common generic versions of existing products dominating the existing market but a niche, higher cost biotech industry (which is already well under way). Cost for many common illness as we know them will decline but the niche illnesses will have high cost treatment, personalised medicine. Healthcare will have to choose what it can afford to cover, don’t be surprised if this leads to a purely ‘Generic’ healthcare system with individuals bearing the cost for future advancements in Biotech treatment.


A polarised industry will have a polarising effect on jobs


Continuing acquisitions of smaller biotech companies, as well as Generics, demonstrates big pharma recognises this trend. The bets are truly hedged for the biggest companies. From a candidate’s perspective, it’s creating an unusual polarizing situation. Recruitment by Generic companies has increased steadily over the last decade, this will continue as more patents expire and Generics pick up the slack but may result in driving down salaries and skill sets – to replicate an existing process is by its nature less technically challenging than R&D. Biologics already pays a higher average salary than pharma and this trend will continue as demand for more sought after skills overtakes supply. Being at the forefront of this field is already as technically challenging as any field in Life Sciences.


Malcolm in the Middle?


This leaves a gap in the middle, a gap that has historically been the area that by far most people employed with industry have worked in. What will the result be in the long term? How will industry react to this changing need in skill sets? How will this affect your career plans?