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Articles » Divergence of Parallel Lines
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Consider two industries: pharmaceuticals and horticultural.

Each one starts with a key mission, to find and develop new products which help the public. Pharmaceutical companies supply those products to pharmacies, wholesale and retail. Horticultural businesses, or foundation nurseries as I call them, supply their products to plant wholesalers who in turn supply retailers.

Research bulks very large in both cases and there have to be many expensive laboratories. The raw materials come from chemical experiments supplemented by natural sources in the case of pharmaceuticals, and natural sources of one sort or another in the horticultural world. Research is both academic and applied, using a broad range of techniques. Chemists ransack the world of molecules and ions, botanists ransack the world of jungles and savannahs.

As promising leads are discovered, the effort turns toward finding out whether the promising chemical works against the target disease in vitro (ie a test tube), and then in vivo, ie (in the living animal). At the very least, it should not kill laboratory animals. Plant scientists vary all the possible conditions under which their new discovery will live, trying to find that special combination of drought tolerance, wider temperature range, reduced light tolerance, pest resistance and yet exciting character which makes all their effort worthwhile in the first place.

Pharmaceutical companies then enter the trial phase, ending with Phase IV, testing small human populations with the new drug to see if the results are useful. Horticultural companies also have their trial phase. The new plant is again studied in various conditions to see if it holds up as predicted. Their Phase IV is growing the specimen in the same way as a large wholesale nursery might do after buying the youngsters, ie without any special coddling.

At this point one could imagine that both industries spend equivalent amounts of resources to develop the new product and then introduce it to the market. Research laboratories in either case with their chemists, physiologists, biochemists, pathologists, geneticists and so forth are very costly. Field trials requiring vast acreage are expensive. It takes years before the new item can finally be sold.

So far both lines have been parallel, but at this point they inexplicably diverge. The foundation nurseries must compete in the market place. They can only charge as much as the market will bear and yet they still make a profit. Pharmaceutical industry pricing is quite different. The foundation nurseries absorb the cost of the years of research and still remain profitable. The pharmaceutical industry tells us it cannot manage its resources in the same way. Should someone help them with elementary business practice?