The stories surrounding CEO changes at AstraZeneca and Johnson & Johnson reflect a world that is becoming more skeptical of drugs, and a global prescription drug industry in turmoil, not knowing which way to turn.
It is only fair that executives and investors are confused. Before the last decade, prescription drugs was an industry that seemed unstoppable, with the largest companies promising double-digit annual growth. Only a wave of consolidation hinted at an industry that might have passed its peak. But revenues have been shaky for years now, and pharmaceutical executives, far from promising growth, are more likely to be talking about how to slow down the decline.
It is no longer just the health advocates warning about the dangers of pharmaceuticals. The Food and Drug Administration has taken one pharmaceutical manufacturer after another to court for trying to sell drugs for purposes where they are not medically useful. The Centers for Disease Control has warned about the overuse of specific prescription drugs. A series of scandals about manufacturing quality and side effects has seen a dozen household-name drugs recalled or withdrawn. And epidemiologists have recorded a decline in the death rate simultaneous with consumers’ decreasing drug use, reinforcing the perception that at least sometimes, drugs are more dangerous than helpful.
The new pharma executives will have to find a way to offer products good enough to win over the skeptics. It’s an uncomfortable and unfamiliar position for the pharmaceutical industry.
