Glaxo Chief: Industry's Changing Role

The pharmaceutical industry is in the middle of a period of instability and turbulence. To survive, it must understand how the nature of its competitive advantage is changing and reevaluate its role in the health care system, Sir Richard Sykes, deputy chairman and chief executive of Glaxo Holdings, has said.

Speaking at a conference in London last week organized by The Economist, Sir Richard described what Glaxo sees as the three fundamentals for change. First, new systems such as disease management capabilities will be necessary to meet the demands of leading markets. Next, customers in the major markets will demand from suppliers a wide portfolio of products and services. Third, he said, the biosciences are the emerging foundation of innovation in medical research. Companies must emerge with the dynamism to drive the industry through the barriers to progress which these changes will create, and this will be achieved through the construction of effective networks of alliances and partnerships which will involve sustained investment, demanding scale of a different order from the past, he said.

Industry Innovation Warning US health care reform has been achieved through the dynamic operation of the marketplace, said Sir Richard, and he urged Europe to look at the benefits which can flow from a competitive market. He noted that health service payers' ambivalence towards pharmaceutical industry innovation has reached its current level at a time of unparalleled scientific opportunity, and warned that claiming to want the best drugs of tomorrow but at the same price as today, or even yesterday, is not a sustainable position for government or a viable basis for research investment.