Content area
Full text
“What is specialty pharma?” many people question me. Is it in-licensing specialists? Niche marketers? Drug delivery firms? Will generic drug manufacturers be included? How about biotech companies that move into drug development? Well, depending on whom you ask, they are all of the above [1]. Wall Street's definition is a catch-all, and includes drug delivery, biotech, and generic firms. For instance, Morgan Stanley coverage of specialty pharma includes: generic companies like Teva, Mylan, and Actavis; over the counter companies like Perrigo and Warner Chilcott; development centric companies like Allergan, Forest, and Valeant (previously Biovail); drug delivery companies like Alkermes; and animal healthcare company like Zoetis (formerly Pfizer animal healthcare division) [2]. As the popularity of the specialty pharma business model has expanded, so has its scope. Today, many use the term “specialty pharma” interchangeably with development-centric pharmaceutical or biopharmaceutical companies. Others apply it to companies developing generics, reformulating existing drugs, or targeting niche markets. Some others more often use the term to identify companies that are “not biotech not big pharma”, where big pharma is defined as large-cap pharmaceutical companies. In other words, “specialty pharma” has become such a broad term that it covers just about everything except the big pharmaceutical companies and medical device and diagnostic makers.
2 Specialty pharma business modelAfter defining specialty pharma is inclusive of all healthcare-related firms that are neither big pharma houses nor medical device and diagnostic makers, the next question is “What is specialty pharma's business model and why it gains so much popularity nowadays?” In order to answer these questions, it is necessary to compare and contrast big pharma with specialty pharma. Big pharma typically follows a vertically integrated business model. It means that big pharma carries out the work from the beginning to the end on a worldwide scale including discovery research, drug synthesis, preclinical research, clinical development, regulatory work, scale up and manufacturing, and worldwide distribution, sales, and marketing. Moreover, big pharma has more breadth by working in four to six therapeutic areas. These may include cardiovascular, antimetabolite (such as antidiabetics), central nervous system (CNS), oncology, and infectious diseases. Specialty pharma, by contrast, acquires drugs from academia, research institutions, or other companies, and seeks to commercialize them in...