We have been presented this week with two visions for the future of innovation in the pharmaceuticals industry. One is encouraging, the other is not.
The first is the $20bn deal agreed by Novartis and GlaxoSmithKline, allowing them to swap assets so that each can concentrate on an area of expertise. The other is the $46bn hostile approach by Valeant, the rapidly growing, acquisitive company backed by hedge funds and run by a former McKinsey consultant, to Allergan, the maker of Botox.
In the first, pharma companies that invest heavily in research and development on cancer drugs and vaccines have discovered a way to specialise in the things they do best without resorting to large mergers. In the second, constant dealmaking, accompanied by the cutting of R&D to save cash and please Wall Street, produces new types of cream for acne and athlete’s foot.