No dilemma for Big Pharma.

I've seen a fresh analysis regarding R&D spending 2012vs2011 in Big Pharma. After the presentation of cold numbers there is a conclusion:

Some of the big pharma companies face a dilemma requiring tough decisions. They can cut R&D spending to keep the bottom line looking good in the wake of declining revenue. However, cutting R&D too much could jeopardize prospects for launching new moneymaking products.

Another alternative is to continue funding R&D even as revenue drops off. This approach, though, can lead to unhappy investors if earnings suffer too much before the investments pay off.

Pfizer appears to have taken the former approach. Astrazeneca could be a poster child for the latter road, going full steam ahead with R&D spending despite decreasing revenue.

Which is the right path? That remains to be seen.

However, how a company spends its money on R&D is more important than how much it spends. Investors should research the fundamentals and product pipelines of each company before buying the stock. That's the kind of R&D that pays off over the long run.

Well, I would disagree with the author – it doesn't matter HOW or HOW MUCH Big Pharma spends the money for R&D – the hidden task is not to develop anything promising but the opposite – protect market from evolving of novel medicine products. Everything else is plain simply PR activity. Therefore Big Pharma has just to spend – in whatever products whatever amount of capital. The outcome is predestined and predictable.