The Future of Research-Based Pharma

John Lechleiter has been Lilly's CEO for nearly three years -- and a scientist for significantly longer. So, it's not surprising he's become prone to evangelize about the importance of medical innovation. He'll talk about it with anyone who will listen.

Today, that group was in London at a summit (hosted by The Economist) called "Reinventing Pharma for a New Generation." During his keynote address, John told the audience that research-based biopharmaceutical companies have an important future in the development of new medical solutions -- that is, if the right path is chosen, allowing the industry to overcome substantial obstacles.

He didn't mince words: the biopharmaceutical industry is at a crossroads.

"The challenges facing the research-based pharmaceutical industry are universal," he said during his remarks. "Countries around the world face inexorable demands on health care systems from aging populations ... and budget pressures made even worse by the economic slowdown of the past two years. As a result, payers around the world -- both public and private -- are relentlessly pursuing ways to hold down spending on health care, including medicines, and demanding greater proof of the value of the medicines that are prescribed or reimbursed."

Just as he's told audiences in the U.S., John underscored two imperatives that will make the innovation model work: changing the way research is conducted (or, as he calls it, "reinventing invention") and public policies that create an environment allowing medical innovation to flourish. And he presented a compelling case for these pathways:

First, innovative medicines have proven themselves time and again to be the most effective way to reduce costs and improve quality. Second, treatments for diseases that remain unconquered, like cancer and Alzheimer’s, most likely will come from laboratories of biopharmaceutical companies. And finally, even diseases that are being treated today -- such as diabetes -- require better solutions.

And here's a practical data point: from 1901 to 1999, the average life expectacy for people in the U.K. increased by 30 years. That's medical innovation at work, and we can build on that achievement only with the right public policies and innovative approaches to research. With debt crises popping up around the world, and devastating diseases like Alzheimer's eating away at health care budgets, a perfect storm is approaching. And Lilly firmly believes innovation is part of the solution.

"Innovation is not a panacea for the challenges facing our health care systems," John said, "but it is hard to see any way out of the current crisis without innovation."