1990 Annual Report

CHAIRMANX 'S IESSA GE

As I look ahead to the challenges of the 1990s, I am bullish about the prospects for the research-based pharmaceutical industry.
That confidence is based on the fact that this industry has prospered
and strengthened its research capability. As we embark on this new decade,
we are in a strong position to provide unique and vital benefits to society. Who
else will enable the medical profession to unravel the mysteries of AIDS, cancer
and Alzheimer's disease?
The demographics of an aging American population require special
RICHARD J. KOGAN research on an urgent basis to tackle the degenerative and chronic diseases
President and associated with old age. The pharmaceutical industry is reacting to this urgent
Ci,,f ()J,,,,, o//, need. During 1990, the industry will spend approximately one-half of its planned
Schering-Plough Corp.
annual 58.2 billion R&D investment on diseases of the aging.
As life expectancy moves out toward 80 years and beyond, the new pharmaceuticals now in
development will not only help avoid premature deaths, but will also improve the quality of our lives.
They will also hold down overall health-care costs by enabling elderly people to avoid expensive surgeries
and hospitalization. In all, more than 400 new pharmaceuticals are under development and there are
more to come.
The life-saving benefits and the cost savings that pharmaceutical products provide to society
can only be achieved, however, if the industry has the freedom of action and financial strength to continue to expand its research efforts and capabilities. Taxing and restraining innovation is not acceptable.
Today, many countries in the world are busily discovering what we have known all along in
the United States. The free-market, profit-driven, private-enterprise system works. Centralized government planning doesn't work. It is a resounding failure as a social, political and economic system. Ask
Mikhail Gorbachev, ask the people in the Eastern Bloc. They know from bitter experience that centralized
planning and bloated bureaucracies are not the answer. The answer is a free-market system-a system
in which our industry is free to innovate.
The pharmaceutical industry has proven that its products save lives, avoid premature deaths,
and save billions of dollars in costs resulting from disease. The industry is not part of the health-care
cost problem in America-it is a vital part of the solution for the 1990s and beyond.