Leveraging China and India: two countries are the key to staying competitive in cost, talent and innovation.
Chief Executive (U.S.) › Nbr. 2009, January 2009
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Leveraging China and India: two countries are the key to staying competitive in cost, talent and innovation.
The pharmaceutical industry provides a near-perfect example of how leveraging China and India--for not just cost efficiency but also talent and innovation--is becoming central to survival and success for many Fortune 1000 companies.
According to Jean-Pierre Garnier, the recently retired CEO of Glaxo-SmithKline, in 1990, the cost of discovering and developing a new drug was less than S100 million. Today, it is more than $1 billion. In 1980, the industry spent a total of $2 billion on R&D. In 2006, it spent over $40 billion--with virtually no increase in the number of drugs approved by the FDA. The industry's response to declining R&D productivity and thus a shortened monopoly period for drugs has been to spend even larger sums on marketing and sales. In 2007, the seven largest pharma companies spent twice as much on SG&A (33 percent of revenues) as on R&...See the full content of this document
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