Roche’s CEO States that ‘Me-too’ Pharmaceutical Firms will ‘Disappear’

Drug makers who do not offer any genuine value will “disappear” over the next decade, according to Roche’s chief executive, Severin Schwan.

Speaking at the Financial Times’ Pharmaceutical and Biotechnology conference in London, Schwan described a three-segment model with highly-innovative companies on one side and generics on the other.  Schwan stated that the number of players in the latter will decrease through merging and the companies in the third segment, that offer ‘me-too’ treatments with “limited differentiation” will be squeezed out of business.

Their disappearance is inevitable, Dr Schwan commented, given an environment where buyers “will only reward true innovation”.  Regarding ‘me-too’ treatments, he argued “who will pay for that? No money”.

He started by saying that “pharma is in a perfect storm”, with “the regulators’ wind blowing in our face [and] investors breathing down our neck”.  He added that buyers are under enormous funding constraints while the sector barely recoups the cost of its research and development spends.

Dr Schwan went on to comment that in terms of pricing, there needs to be additional differentiation, and it has to be linked with the actual benefit.  He also added that real-world data needs to be combined with clinical data.  However, on this topic, he asked “who is going to take the lead”.

Dr Schwan also spoke of the importance of partnerships but acknowledged that “there is still distrust and both perceived and real conflicts of interest’ that can result in partnerships among the various stakeholders in healthcare “a real minefield”.  When asked about Roche’s own merger-and-acquisition strategy, Dr Schwan said that the firm is only interested in bolt-on deals and emphasised the ever-increasing importance of their diagnostics division.


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