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Drugmaker's massive loss is symptom of larger problem
GlaxoSmithKline sign
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TEXT OF STORY
STEVE CHIOTAKIS: In just a few minutes, British drug company GlaxoSmithKline is expected to report a sharp drop in earnings. That, as other big corporations are enjoying some very good results.
Marketplace's Stephen Beard is with us from London this morning with the latest. Hi Stephen.
STEPHEN BEARD: Hello Steve.
CHIOTAKIS: So has Glaxo just caught a cold or is this something a little more serious?
BEARD: It's more than a cold, and in fact it's symptomatic of what's happening across the pharmaceutical industry. Glaxo has got problems on a number of fronts. It's best selling anti-herpes drug is facing a lot of competition from generic drug companies. And it's anti-diabetes blockbuster Avandia, you may recall, ran into huge problems last year when severe side effects were identified. The drugs been withdrawn and Glaxo faces potentially huge compensation claims.
CHIOTAKIS: What about looking forward Stephen? What are the future hopes for Glaxo and really for the pharmaceutical industry?
BEARD: The problem is research and development is costing more and more. But after the really big discoveries, the great products of recent decades, it's becoming a lot harder to make a break through. Here's Andrew Packman, pharmaceutical expert with the PWC Consulting Firm.
ANDREW PACKMAN: Developing those new products is simply very difficult. So we have seen late stage failures, and we've seen companies putting large amounts into R&D, and simply not managing to bring in those new products.
And a further symptom of that difficulty -- Pfizer has just announced the closure of a major search center here in the U.K. -- the center that developed Viagra.
CHIOTAKIS: All right, Marketplace's Stephen Beard in London. Stephen thank you.
BEARD: OK Steve.
From what I hear, little of the R&D funding that resulted in the breakthrough drugs from which big pharma made those millions (er, I mean billions, of course) was from their own coffers in the first place.
Seems taxpayers, as usual, were the ones who ponied-up to fund that research, while mostly foreign-owned corporations made out like bandits (literally?) at our expense -- on both ends.
Frankly, I'm glad to see a little comeuppance working its way back to where it belongs.
Meanwhile, of course, we're still subsidizing these clowns through the medicare prescription-drug benefit, where taxpayers fund the full retail price of drugs that were overpriced to begin with.
God, I love kharma.
I have been fighting these people since Jan 06 after my vision loss & at the time of my first Heart Stint
It is All About the Money!!! I took Avandia from 6-03 to 1-06- While taking Avandia I lost my vision from 20/20 to 20/400. I had a Stint put in my Heart 3-06. I had Open Heart bypass surgery 8-07 & Balloone surgery on my heart 7-09.The F D A has been a Joke. G S K, the maker of avandia, is ONLY concern about Profit, This drug MUST be taken off the market
