There’s no doubt about it, 2008 was a terrible year for the pharmaceutical and life science industries. Terrible just about doesn’t do it justice. It was a miserable year for everyone except for trial lawyers and their allies.
In 2008, the FDA completely threw out the user fee agreements and companies were not getting timely review of products. The FDA’s shifting standards in trial designs became the apex of frustration for biotech and pharmaceutical companies.
Curiously, despite all of the drama playing itself out, manufacturers were quiet. Very quiet. But more on that in a minute.
Unfortunately, 2009 doesn’t look much better for the industry. The trial lawyers and their allies are investing hundreds of millions of dollars in the pre-emption issue (the notion that we should allow states and communities to pass laws that supersede federal standards…a can of worms designed to make billions for trial lawyers in frivolous lawsuits).
Yet the industry has been quiet. Over the last 18 months, many of the companies have been looking at their business model and setting themselves up for future success. The sales rep arms race is over and thousands of reps have lost their jobs. Companies like AstraZeneca are looking at outsourcing their manufacturing. And at least one major pharmaceutical company is looking at a business model based on the holding company concept where it would become a holding company of biotech companies and products. Expectations for the industry have never been lower on Wall Street, which buys the industry some time to make changes and set itself up for future success.
2009 will definitely be a challenging year, but it isn’t looking quite as bad as 2008.