An important conversation between Richard, a biotech pro, and Derek a pharma veteran, highlights the pathetic state of the current drug discovery and development process. 

Both point out how Pharma's current top down development process is tedious, disconnected and in many cases just don't work.  Although Richard's prescription seems logical on paper, the reality of industrial reorganization coming from the inside is a long shot.

Industries evolve in a similar manner as ecological systems, via punctuated equilibrium. Industries progress slowly and then suddenly a new organism/organization that has been evolving along the fringe emerges to replace the parent species by taking advantage of a new adaptation/technology.

The history of economic geography is full of examples of how industries evolve between being vertically integrated structures to vertical disintegrated ecosystems, driven primarily by the disruptive effects of a new organizational species.

The current pharmaceutical industry is highly vertically integrated.  Although attempts are being made to extend their expertise through alliances and acquisition, the history of life proves time and time that most powerful driver of change is the emergence of an organization that leverages a specific adaptation to out fight, out wit and out compete the current dominant species.

With gene chips just beginning to fulfill their promise, I believe that the organizational form that will dominate the future of drug development will be the one who cracks the proteomics bottleneck and leverages this new information to dominate its ecology.  On that note, I'd give the upper hand to a biotech company that is most likely not even on today's industrial landscape.