The Economist shows why the pharmaceutical industry is gradually overthrowing its blockbuster model in "Beyond the Blockbuster".

As many of Big Pharma's drugs go off patent, it is becoming increasingly difficult for drug firms to replace their lost revenues and earnings, let alone to meet the market's growth expectations. In 2006 $18 billion in revenues from these drugs disappeared.

That's why they are turning toward targeted therapies that are an important part of personalized medicine. Sales from specialty drugs have doubled since 2000, and were two-thirds of new revenue growth in 2006. Meanwhile only 25 per cent of new drugs treat chronic diseases, which seems to indicate that they are producing more specialty drugs.

A group of institutional investors produced a report questioning the viability of the blockbuster model, and expressing doubt that Big Pharma's business model can produce targeted drugs. Change is in the air.

Morning William -

You allude to an investor report in the last paragraph of your blog entry. Would love to get a copy of this report, any thoughts on where it can be found?

Thanks

Mollie,

I tried to find it without success. I may call The Economist today and inquire. If I find out where to obtain it, I'll post a comment.

The report "Pharma Futures: Prescription for Long-Term Value" is available as a pdf document at the resources link of Pharma Futures. E-mail me at wstepp@nyc.rr.com if you can't access it and I'll send an e-copy or hard copy.

Here's a link directly to the report:

link here