Roche CEO Severin Schwan (photo) found himself in hot water last week after judging the business strategy of cross-town rival Novartis ($NVS). But that doesn't mean he's shying away from pronouncements about which drugmakers are most likely to succeed as markets change.
At a Boston College CEO event, Schwan told his audience that the drug companies poised to survive the difficult, patent-cliff years ahead are large generics makers, and companies that manage to make innovative new products. Note that "diversified pharma/consumer healthcare/generics/animal health/eye care players"--a la Novartis and several other Big Pharma rivals--didn't make the list.
"There will be those companies who will be very focused on generics, and within this group I expect a lot of consolidation," Schwan said, according to Reuters. "A second group, including ourselves, will go for innovative new medicines. In this field you will have a lot of companies, some big players, some smaller players."
As the Boston Globe notes, Schwan predicts that consolidation will weed out the middle ground--in other words, companies that have "neither rock-bottom cost structure or innovation in research and development." These firms will be "squeezed out" because of shrinking healthcare budgets around the world.