Capitalism is about survival of the fittest. If a product, firm, or industry cannot compete, well, then it goes the way of the dinosaur and dodo bird.
For years now, newspapers have been caught in a ferocious downward spiral, making many folks wonder about their long-term ability to survive. Will newspapers be able to adapt to low-cost (or free) competition? Can they compete with new technologies?
Interestingly, the parallels to the days of horse and buggies or the downfall of Polaroid are not just limited to the newspaper business. Christoph Westphal in a recent article in The Boston Global draws an analogy between newspapers and research-based pharmaceutical companies.
He points out that, just like newspapers, the "content" of pharmaceutical companies has also lost pricing power as the industry has witnessed a shift from branded, patent-protected drugs to generic (and much cheaper) drugs.
The challenges faced by pharmaceutical companies are many but one highlighted in the article is the fact that
...many pharmaceutical and biotech companies are finding it difficult to support a large workforce of highly-skilled scientists and doctors in developed countries. Increasingly, the earlier stages of drug discovery are being outsourced to developing countries, in an effort to rein in the unsustainable cost of drug development. Many major pharmaceutical companies are building and growing large global research centers in countries such as China.Everywhere you look, the words "pharma" and "China" are uttered in the same sentence. (Hey, we did it ourselves two days ago.)
So, does China represent the automobile to the doomed buggy-whip or the opportunity for pharmaceutical companies to find a new lease on live?
[Thanks, Mary, for the tip!]
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