article: The most profitable, in fact, looking at figures for last year. But for how much longer is the question occupying the minds not just of big pharma executives, but of health professionals and governments the world over. There are already signs of trouble ahead - thousands of job losses and widespread consolidation are hardly characteristics of an industry in rude health. But this is just the beginning of a process that could fundamentally change the pharmaceutical sector forever. For a start, big pharmaceutical companies are no longer providing the service they once did. "The system has served us well in terms of developing good new medicines, but in the past 10-20 years there has been very little breakthrough in innovation," says Dr Kees de Joncheere at the World Health Organisation. Of the 20 or 30 new drugs brought to the market each year, "many scientists say typically three are genuinely new, with the rest offering only marginal benefits," he says. This dearth of genuinely new potential blockbuster drugs is a grave problem for big pharmas, and of course society at large, particularly given the industry is falling off a patent cliff the like of which it has never seen. "Over the past three or four years, we have seen the biggest collection of patent expiries in history," says Stephen Whitehead, chief executive of the Association of the British Pharmaceuticals Industry (ABPI). "This has cost the industry some £150bn ($240bn)." Also weighing heavily on pharma companies is the process known as stratification. Scientific advances have led to a far better understanding of both genetics and disease, which means individual drugs can now be targeted far more directly at a much smaller number of patients. Whereas previously one drug would be used to treat different types of cancer, for example, now different strains can be treated with a specific medicine. The cost of developing these drugs remains high, typically $1.5bn-$2.5bn (£900m-£1.5bn), but the market for them is tiny - in some cases only 100-150 patients. This all means drugs are becoming increasingly expensive, and prohibitively so in some cases. Gilead's new hepatitis C drug Sovaldi - costing upwards of $100,000 for a full course - has caused quite a stir. "Increasingly questions are being asked," says Dr de Joncheere. "Are we getting a fair price? Are we getting enough transparency in research and development? "If France were to treat all its hepatitis C patients with Sovaldi, it would add €1.5bn ($1.9bn; £1.2bn) to the country's drugs bill. "[These kinds of drugs] are just not affordable any more." And particularly so when fragile economic growth and high debt levels are squeezing government budgets across the world. Even in the US, where free market pricing rules absolutely, Congress is becoming increasingly concerned about the price of some drugs. And it's not just the cost of the drugs that are being developed that is a big problem, but those that aren't. Big pharma companies are in the business to make money, so will generally develop those drugs that offer the greatest potential for profit. This means a
summary: Pharmaceuticals is an extraordinarily profitable business.