There's an interesting article up over at InVivoBlog, and I wanted to see what the readership here thought of its main premise. Subtracting out the cute ecological analogies (Big Pharma as polar bears, for example), you get to this:
. . .For example, AstraZeneca, Novartis, and Bristol-Myers, all operate in the fields of neuroscience, oncology, and cardiovascular health. While some pharmas involve themselves in nutritionals, animal health, infectious disease, and other fields, all of these companies also engage with a mixing pot of therapeutic areas.
The relative strategic uniformity isn’t generally the case with the leading companies in other industries. In the high-tech industry, for example, there is a much higher level of specialization. Google is mainly in the advertising business; Microsoft, software; Research in Motion, in wireless solutions. You aren’t likely to see Facebook manufacturing semiconductors any time soon. (Yes we are aware of Microsoft’s Bing search engine and the new Google Chrome OS, but still.)
It is likely that health care businesses will evolve in a similar fashion. The leaders of the future will be those with unique and complex models which sub-speciate into differentiated forms. Companies will focus nearly all of their efforts on a single therapeutic area, becoming “immunology companies” or “cancer companies”. These companies will also become more integrated across sectors. A cardiology company will sell diagnostics, devices, and therapeutics pertaining to cardiovascular health.
I'm not so sure, myself. I can see reasons for this to happen, but I can also see forces that will pull in other directions. For one thing, I'm not sure if there are enough targets in some of these therapeutic areas to keep even a medium-sized company running. The host-of-smaller-companies model, each of them trying to hit it big, seems like a better fit, as long as they can share an ecosystem (there I go, too) with the larger deep-pocketed multi-area players.
Another problem is that I think the barriers to, say, a cardiovascular drug company becoming also a cardiovascular device company are higher than the ones to it becoming a cardiovascular-and-diabetes drug company. Moving into another drug discovery area at least lets you use some of your existing staff and resources, while heading out into diagnostics or devices will probably take you into territory that you don't know so well.
And besides, I think that the analogy with other industries doesn't hold up very well. The authors list off a few software and hardware companies, but don't Google and Microsoft have their hands in a lot of different areas? And have car makers (domestic or foreign) settled down into making only SUVs, only pickup trucks, or only sedans? Not that I've seen. Know of any movie studios making nothing but adventures or romantic comedies? Or any grocery chains that only sell vegetables, but not fruit?
In all those cases, the existing infrastructure lets such companies expand, at relatively lower cost, into related areas that will diversify their customer base. Medical devices and diagnostics may look like a similar situation, but I really don't think it is.