The Outer Limits of In-Licensing

There’s an idea that’s been floating around the drug industry for some years now. It goes in and out of focus, but it refuses to completely die: Why not ditch the research labs and just in-license all your compounds? It’s been at least 10 or 12 years since I first heard of this plan (although I’m sure it’s an older idea than that), and it still keeps popping up as a new thought experiment.

“Wait,” you might be saying, “don’t we already have a company whose sales pretty much all come from outside compounds? Big outfit, name of Pfizer?” Point taken, but remember, Pfizer has lots of research labs as well, whose contents they rearrange every couple of years when some sort of gong goes off in Groton, CT. (That’s my theory anyway; it fits the facts about as well as any other.) They do indeed bring in most of their revenues from outside compounds, but they haven’t given up on trying to discover their own. Yet.

Will they? Will anyone? This brings up my first objection to the whole idea. You’d have to figure that these numbers have been run before, and found wanting. I find it hard to believe that no one’s seriously taken a look. The idea of cutting the discovery organization loose is very appealing — well, not to me, naturally, but to the accountants. The research labs are a whirlpool of red ink, with no guarantee of anything ever coming back out, and I’m sure that the master spreadsheet perks up considerably when that section is deleted. Since no one’s quite had the nerve to do that yet, there must be some other concerns, and they must be pretty substantial ones.