The pharmaceutical industry has entered a critical period of transition. Business models that have proven remarkably successful over the past 20 years are now encountering major challenges. As companies grapple with the leading symptoms of these challenges — pricing pressures, pipeline productivity concerns, a growing public distrust, and greater political scrutiny — it is becoming increasingly clear that a profound shift is underway in what it takes to be successful in this environment.

One predominant concern is the looming revenue gap as key blockbuster products stand to lose patent protection over the next few years. Despite unprecedented advances in the science and massive investments in R&D, many companies have not generated sufficiently robust late-stage pipelines to replace products facing generic competition. The evidence suggests that the development engine as we have known it is broken.

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