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The End of Drug Company's Dynasty Is Now In Sight

As we all know with the Vioxx debacle Merck is stumbling badly.
The even better news is that yesterday Pfizer, AstraZeneca and Eli Lilly - each disclosed serious problems with important new medicines yesterday they were developing. This follows on the heals of the world's largest drug company, Pfizer, announcing yesterday that their blockbuster drug Celebrex also has cardiovascular side effects. No surprise here as I have said this many years ago.

No major drug company is exempt from the problem. The number of new drugs approved by the Food and Drug Administration has declined sharply since the mid-1990's, falling from 53 in 1996 to 21 in 2003, even as the industry has nearly doubled its annual spending on drug development, to about $33 billion. Apparently the decline in drug research and development has been an open secret among analysts and scientists for years. They are offseting their weakness in creating profitable new drugs by:

  • pursuing aggressive campaigns to market existing drugs to doctors and patients,
  • imposing big price increases and
  • making efforts to extend patents on existing medicines

The industry as a whole earns half a TRILLION dollars a year, so they have a LONG way they can fall before they really start to "hurt". Heck, Merck will lose $50 billion dollars with Vioxx and they are still kicking strong. Fortuantely, as a result of this news Pfizer lost nearly $25 billion dollars

Pfizer is spending 7 billion dollars EVERY year on new drug development along. Collectively, all drug companies spend $16 BILLION dollars in EVERY years to market their drugs to physicians every year and another $3 billion for direct to consumer advertising. That gives you some idea of how much money is involved here.

However, there is a strong indication that the fuel feeding this fire, new drugs for chronic diseases, is slowly starting to dwindle. With providing a broader and deeper appreciation of the central issues involved to more of your friends and relatives, by passing my newsletter to them, we can accelerate the process. Folks, we are indeed making a difference, and just like the writing on the Berlin wall, the drug company's wall is clearly starting to crumble. And it won't be a moment to soon.

New York Times December 18, 2004

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