White Paper

New Molecular Entities (NMEs) The Path Of Resistance

Source: TransPerfect

On a global scale, the number of new molecular entities (NMEs) in development—and, more importantly, the number being approved by regulatory authorities— has dropped significantly in recent years. All but extinct are the blockbusters of the past that biopharmaceutical and medical device companies counted on to deliver double-digit profit margins that could subsequently be reinvested in new product development. Without these revenue streams to fund research and development, the potential for discovery of new NMEs has been significantly reduced.

The debate over the genesis and potential resolution of this predicament has been extensively discussed, and does not need to be further addressed here. All we need to understand for the purposes of this article is that the industry climate has indeed changed. Thus, we will focus on strategies that forward-thinking industry leaders are employing to effectively compete in the new biopharmaceutical and medical device world. These companies recognize that their products are now marketable to a fewer number of patients, and that their research and development efforts must be closely monitored in order to ensure that discovery of new NMEs continues, eventually yielding therapies that will continue to positively impact patients.

Today’s landscape has forced companies throughout the industry to re-evaluate traditional product development models. Departments and roles formerly considered imperative to maintain internally are now being selectively outsourced. Also there is an increasing focus on emphasizing and strengthening core competencies in order to bring products to market more profitably. These challenges can be difficult hurdles for management teams that may be comprised of predominantly scientific, medical, or operational professionals. Difficult business decisions, many which can have far-reaching effects on operations, must often be made out of necessity, as evidenced recently by the number of large biopharmaceutical company mergers and acquisitions — Pfizer and Wyeth, Merck and Schering–Plough, and Genentech and Roche.