What Patients Need to Know about Pharmaceutical Supply Chains—Chapter 10

Everything a critcal thinker needs to know about the supply chains for SARS-CoV-2 injections—packed with facts and evidence that can't be refuted.

10. HOW DID IT GET TO THIS?

The battle between two stomach ulcer drugs

In 1976, the pharmaceutical company Smith, Kline & French (SK&F) launched Tagamet (cimetidine), an anti-ulcer treatment. The head of the program, Sir James Black, was the first to employ rational drug design in practice, bringing Tagamet to market over twelve years of intense research and development activity.

Five years after the launch of Tagamet, Glaxo launched a competitive product, Zantac (ranitidine), based on a similar compound but produced by a cleaner manufacturing process. Within five years, Zantac was outselling Tagamet 3:1.

This was the first example of clever targeting of physicians to capture competitor markets. It stimulated phenomenal growth in the therapeutic area. Both products became blockbusters on sales of tens of billions of dollars. The beginning of a lucrative strategy for the industry was cast.

Glaxo’s formula gets the thumbs up.

Other pharmaceutical companies and their investors were impressed by what Glaxo had achieved. Even the CEO of SK&F congratulated them on their win.

Armed with this apparently powerful strategic model, pharmaceutical companies resolved to beef up sales & marketing, awaiting compounds coming down the pipe. Discovery research grew like topsy, as great libraries of patented molecules were required to feed the hungry marketing machine. Expert statisticians and medics were hired to help the marketers frame the messages to doctors. Regulatory affairs departments were expanded to be sure of keeping on the right side of the regulators.

So, the scene was set. Sales & marketing, with their supporting cast, were poised ready for the next blockbuster compound to come down the pipe. Discovery research was out there, plotting theories on why a molecule would work, modelling and patenting them in great quantities and stuffing prime suspects into the upstream end of the pipe.

In the investor community, however, there was emerging realization that not much was actually making its way out of the pipe. The prospect of being lumbered with huge fixed costs if a drug failed was a serious concern.

Coincidentally, during the ‘80s, other sectors were outsourcing ‘non-core activities’, claiming significant benefits in risk reduction, plus lower costs, to boot. That seemed like the perfect solution. Discovery research and marketing were considered core activities. The bits in the middle—running clinical trials, producing, testing, moving, and storing products and materials, dealing with customers using the products and collecting their money—were all classed as non-core…

…and so the cull began.

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The exact sequence of events isn’t easy to pin down, but the results were unmistakable—masses of workers were shown the door and non-core facilities went up for sale.