Drugmakers whose offerings do not offer any genuine value are going to “literally disappear” over the next decade, according to Schwan Roche’s chief executive.

He was speaking at the FT Pharmaceutical and Biotechnology conference inLondon. Severin Schwan (pictured) described a three-segment model with highly-innovative companies on one side and generics firm on the other. The number of players in the latter will be reduced through consolidation but the companies in the (middle) third segment, those that offer me-too treatments of “limited differentiation” will be squeezed out of business.

Their disappearance is inevitable, Dr Schwan said, given an environment where payers will only reward true innovation. In terms of me-too, as he argued, no one will pay for that. There is no money in such kind of innovation.

According to him, pharma is in a perfect storm with “the regulators’ wind blowing in our face [and] investors breathing down our neck”. He noted that payers are under enormous funding constraints while the sector is barely recouping the cost of its R&D spend.

Dr Schwan went on to say that in terms of pricing, there needs to be more differentiation and it has to be linked with actual benefit and real-world data needs to be combined with clinical data.

He also spoke of the importance of collaboration but acknowledged that “there is still distrust and both perceived and real conflicts of interest’ that can make partnerships among the various stakeholders in healthcare “a real minefield”.