End Of The Pipeline

My wife had some of her long-time friends over for dinner (a dinner I cooked) and one of them works in upper-management for a major pharmaceutical.

We got to talking about the anti-business atmosphere these days (and don't tell me we're not. I see it with my own eyes everyday) and its impact on big pharma specifically. She told me something very interesting...and disturbing. According to her, because regulation on pharma has become so stacked against them major companies have ceased (or are in the process of no longer) developing new products.

They're reached the point where they feel it's no longer worth it. They're getting hit with too many lawsuits despite following the law and the FDA is making it harder for them to bring their products to market:

"We recommend avoiding names that offer little growth or opportunity for a take-out. These include companies which are developing drugs that are likely to face regulatory hurdles. The US Food and Drug Administration (FDA) has been exercising more caution before granting approval to new products and several candidates have been facing delays in receiving final approval."

They will continue to maintain existing medicines but as far as the pipelines go (the lifeline to not only their business but our lives), nothing. 

No wonder pharma stocks have plummeted (they were around 35$ per share during my time in investments) and mergers are now common.

If accurate, how can they ensure the long-term growth of their companies if they have nothing in the pipelines?

Surely the ramifications can be massive.

For example, she said they - her company - were very close to finding a drug for Alzeimers. They stopped development. There will be no cure for Alzeimers in our lifetime she said.

Ouch.

She also mentioned how it's been forecasted that new diseases will come up with no cures likely to fend them off. Keep in mind, it takes anywhere between 10-15 years for a drug to pass through its clinical trials. That's after they've done years of research.

We should always keep in mind the unseen consequences of our position.