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Consolidation & managed care

Consolidation & managed care

Watching companies form alliances can be a little like watching couples pair off at teen dances. In the genomics dance, Human Genome gets SmithKline, Millennium gets Roche, Sequana gets Glaxo and Genentech.

In blood substitutes, Somatogen gets Lilly, Alliance gets Johnson & Johnson, Upjohn gets Biopure. One can mentally see companies lined up against the gymnasium wall waiting for a partner to ask them to dance.

But while the pairing off process can tell you a lot about each company individually, it's only by stepping back from that micro vision that one can see patterns begin to emerge.

After spending the better part of last week trolling the halls of the BioPartnering Europe meeting in London, we came away with the conclusion that the pattern includes four pieces of the drug sector that frequently are considered separately.

First, the marketing departments of big-cap pharmaceutical and top-tier biotechnology companies, which are going to have to figure out the most appropriate products to deliver in a managed care environment.

Second, biotech companies with a diverse - and more importantly, dispersed - array of technologies, intellectual property and knowhow.

Third, the R&D budget process at the buyside companies, which in an era of constraints will increasingly have to manage trade-offs

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