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Pharma companies: not seen as the most innovative (but don’t compare apples to medicines!!)

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A fair analysis by PhRMA of this recurrent report on Innovation by Booz & Company…

Booz surveyed trends in R&D spending and innovation strategies, looking at whether a company’s fluctuating investments had any long term effects on their brand’s innovation standards.

From the report:

“There is no long-term correlation between the amount of money a company spends on its innovation efforts and its overall financial performance. Instead, what matters is how companies use that money and other resources, as well as the quality of their talent, processes, and decision making.”

In Booz’s report, the list the top 20 spenders on innovation; eight of them are biopharmaceutical companies:

  • N°2,  Novartis, $9,6 billions
  • N°3, Roche
  • N°4, Pfizer
  • N°7, Merck
  • N°12, J&J
  • N°13, Sanofi
  • N°16, GSK
  • N°20: AstraZeneca

That pharmaceutical companies’ investments represent some of the highest R&D spending but still aren’t viewed as highly innovative by other industries…

Part of the discrepancy lies in a public perception problem. Industries that generate a constant stream of new products are hard to compare to pharmaceutical companies who make incremental progress researching a new medicine over the course of several years. A billion dollars invested into gadget technology can create multiple new products; the same amount spent on molecular biology means you might hopefully understand Alzheimer’s disease only slightly better than you did before.

Look through Booz’s report – it’s a worthwhile read – but remember that it’s tough to compare Apples to medicines.

And someone to comment:

what constitutes innovation? incremental change larger screen on iphone or innovative healthcare?

Hollon, Kaelan. New Report Ranks World’s Most Innovative Companies. PhRMA, 13/11/12, Available from:



Written by hbasset

November 14, 2012 at 9:27 pm

Posted in Pharmaceutical Industry

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