mass, some mid-sized pharmaceutical firms had entered into the cross-
company joint marketing agreements; others had gone for all-out mergers.
Kerridge was notoriously reluctant to follow either of these routes, believ-
ing that Fisons’ steady earnings growth and a string of successful acquisi-
tions could achieve the same ends.
By the late 1980s the R&D costs of the average new drug were estimated
to be in excess of $125 million^10 from test tube to market; gaining access to
the US market could double that figure. The costs incurred in securing US
approval for new drugs had been rising steadily since the mid-1980s, as the
mighty FDA progressively tightened its already stringent standards,
demanding ever more documentation to accompany every application. A
scandal in which four of its employees were convicted of receiving ‘illegal
gratuities’^12 had only served to heighten the regulators’ demands for
probity. Changes to the rules relating to alterations in the design of medical
devices – such as drugs dispensers – meant that they too would require
FDA approval. The escalating cost of applications, often exacerbated by
inefficiencies within the FDA itself, was disproportionately damaging to
smaller pharmaceutical firms. However, a poll of companies in an
American magazine had indicated that few were prepared to risk the
wrath of the regulators by complaining.
Fisons had frequently demonstrated its adeptness at repackaging elderly
drugs, but some commentators feared that its dependence on an ageing
drugs portfolio remained an Achilles’ heel. The progress of Tilade, a long-
awaited successor to Intal and Fisons’ first major new drug for many years,
was therefore watched with interest by competitors and commentators
alike. Tilade was a non-steroid preventative; as such it was seen to have
several advantages over its main rival, Glaxo’s Becotide, a post-attack
steroid. Steroids were disliked – especially in the US – because of their
associated side effects. There was also a growing body of medical opinion
that questioned the safety of the traditional post-attack asthma treatments.
These concerns had created a window of opportunity for Tilade. First
launched in the UK in 1986, the drug had since been approved in several
other European countries where it had become a steady, though not spec-
tacular earner. In 1990 Fisons was awaiting the outcome of applications to
market Tilade in Japan and in the US. Securing approval in the US was
crucial if the company was to hold its share of the North American asthma
market, once Intal emerged from patent protection. For some reason
though, the FDA seemed to be dragging its feet over Tilade. Fisons had
hoped to have the drug on sale in the US by late 1988, but had had to wait
until June 1990 before the FDA voted 5–1 in favour of its initial approval.
The split decision had made some City analysts slightly wary about the
company’s prospects. But when the decision prompted analysts from
stockbrokers BZW to raise doubts about the quality of growth at Fisons,
Kerridge was incensed. Feeling that their comments misrepresented the
The referral and influence market domains 273