Big pharma must rethink its role in world of health care, or else, warns IBM

The pharmaceutical industry is in big trouble, and it needs to transform its business model. Instead of just selling pills, pharmaceutical companies need to figure out ways to be more involved with patients and caregivers, partner with health care providers, and deliver new services for better health, according to a new study by IBM Institute for Business Value (NYSE: IBM).

The result just might be a new breed of company that focuses more on the individual - not just the drug. By helping people stay well, get well and manage illnesses efficiently, these companies could earn themselves a more strategic place in the health care ecosystem - and profitability could follow, says IBM.

Between 2000 and 2010, industry spending on biopharmaceutical R&D more than doubled in North America alone. Even so, there has been no corresponding increase in the number of new therapies reaching the market, nor has there been a big surge in scientific or commercial productivity.