R&D as a success factor: pharma thrives on innovation
CEO insights
Medicines developed in Swiss laboratories continue to revolutionise medicine. For pharmaceutical companies, these innovations are an economic necessity. After all, without patents, there would be no sales.
Text: Luise Dambly (AWP Multimedia)
The pharmaceutical industry invests more in research and development than any other industry in Switzerland. The two multinationals Roche and Novartis regularly develop drugs with novel mechanisms of action, thereby acting as significant drivers of the country's economy*.
In few other industries is economic success so closely linked to innovation as in pharmaceuticals. This is due to the special market conditions:
- Patent protection: When a patent expires – typically 20 years after its initial filing in the early development phase – sales plummet abruptly as cheaper generic drugs flood the market.
- No competition on quality: Either a drug is approved as effective or it is not.
- Brand loyalty: Customers do not usually remain loyal to a particular brand.
The most successful drugs from Roche and Novartis in recent years clearly show that new products achieve record sales after their market launch, but revenues decline rapidly when patent protection ends. This shows that innovation pays off – but only as long as it does not stand still.
Blockbusters set new standards
The research behind these blockbusters is complex. That's because they are part of a new era: personalised medicine. These drugs target specific rather than broad areas, thereby minimising side effects. They have been made possible by research that has precisely decoded the mechanisms of diseases in order to combat them with pinpoint accuracy. This has led to improvements in existing therapies and the development of treatments for previously incurable diseases.
- Cancer therapies: Herceptin, Gleevec, and Avastin mark the beginning of personalised cancer treatment. They attack specific cancer cells—unlike chemotherapy and radiation, which also damage healthy cells.
- Heart and blood pressure medications: Diovan lowers high blood pressure by blocking a hormone instead of an entire enzyme. This significantly reduces the risk of side effects. The drug Entresto combines Diovan with a second active ingredient that also promotes the excretion of water and salt, making it doubly effective in treating heart failure.
- Multiple sclerosis: Ocrevus closes a therapeutic gap: it treats a previously difficult-to-treat, slowly progressive form of multiple sclerosis.
* The chemicals and pharmaceuticals industry generates approximately 7% of Switzerland's GDP