And the products tend to be priced high enough that buyers shop carefully. Quite the contrary, in fact. Berkshire's annual letter to shareholders came out on Saturday. One of the reasons we have two biotech drug makers speaks to brand and tech. Company life cycles are getting shorter and shorter, according to Mauboussin, due to rapid changes in technology that displace leaders.
Investors have some help in the area of drug stocks.
The FDA approval process for drugs leads it to pick the winners and, along with patent protection, provide drug companies with sustainable advantages. But genomics has turned out to be the discontinuous innovation that turns everything upside down. Today's big pharmaceutical companies may be smaller tomorrow, while today's nimble biotech drug maker wannabees may rule the world. They are companies using biotech and genomic advances to gain sustainable advantages. Yes, I think the majority of today's Big Pharma is becoming the dinosaur, regardless of deep pockets.