If it is believed that a specific receptor or enzyme should be stimulated or inhibited to develop a useful drug, many companies will develop biological tests using the specific receptor or enzyme as the target. Each company will then search its catalogue/library of previously prepared compounds, as well as synthesize new chemicals to accomplish their goal. If a company is lucky, it will be the only one looking for active compounds against a specific target or receptor. But, the chances of this happening are not great. Scientists and information professionals at all major pharmaceutical companies continually scour the scientific literature seeking to identify relevant biological receptors, enzymes, or other markers to use as targets for testing compounds. Of course, there will be companies who are alone in looking at certain targets, but these targets will often be ones that are purposely bypassed by other companies.

A company that develops and validates a new animal model and shows it to be more specific and sensitive to test biological activity of compounds has a potentially important competitive edge. The value of this edge depends on both the validity of the test and the quality of compounds evaluated in it.

If a pharmaceutical company wanted to weaken deliberately a competitor, one of the most effective ways is to offer the competitor’s most creative scientists better positions at the other company. There are usually a small number of highly creative scientists in any company who supply most of the important conceptual breakthroughs. These people may generally be easily identified and can be wooed by traditional benefits to join another company. High among those benefits is showing respect and admiration for their accomplishments and convincing them that they will have research opportunities that were not previously available to them.

It has become apparent in recent decades that there is a great difference among companies with respect to the efficiency in how well they develop drugs. Having large sums of money to spend on drug development is no guarantee of having and utilizing efficient methods. In fact, many people claim that the largest companies require an additional year or more to develop a drug compared with the time required by smaller, more efficient companies. The large size of an organization often restricts its ability to mobilize people efficiently. The degree to which this belief is true is unknown and certainly would be difficult to test in a quantitative manner.

Current clinical and nonclinical drug development standards and state-of-the-art methods are described throughout this book (e.g., Chapter 50) and in Guide to Clinical Trials (Spilker 1991), but are not yet adhered to by many companies, particularly in Europe, where regulatory standards in most countries are not as rigorous as those used by the Food and Drug Administration. An efficient company will develop a specific drug more rapidly than a less efficient one if the former has an excellent staff and follows good scientific principles.

Marketing is the first area that most people think of when competition is discussed. It is the aspect of competition that is most exposed to the public and to all pharmaceutical companies. The first drug of a new class to reach the market usually retains the largest market share after competitors with an equivalent drug reach the market. This emphasizes the importance of efficient drug development and reaching the market as rapidly as possible. If only a year or so elapses after the market launch of a new drug before the second drug of the same type is marketed, however, it may be possible for the second company to overcome the market lead of the first drug. The second company often accomplishes this by looking for a positive attribute or message that differentiates their drug from the first one on the market. This attribute should be one that is important to physicians and/or patients. Marketing groups are hoping to be winners in terms of gaining the largest market share and do not want to be close. It is generally claimed that being close is only desirable in dancing and pitching horseshoes.

There is a great instability in market share for many therapeutic areas. The therapeutic markets that are most stable have the potential to be disrupted when better drugs are introduced. There are extremely few areas where the “perfect” drug has been discovered. Of 20 major industries, the pharmaceutical industry was found to have the second highest index of market share instability (Schnee and Caglarcan 1978) (the petroleum industry was ranked first).