Are we feeling sorry for the struggling pharmaceutical industry yet?

Generic drugs continue to replace many of the multibillion-dollar blockbuster products of the past. Biosimilars threaten extraordinary revenues and profits of the once-seemingly-irreplaceable specialty biologics. Research pipelines are depleted, and the cost of discovering and developing new products is reported to be more than a billion dollars.

At the same time, the cost of acquiring technologies from universities and small biotech companies has skyrocketed. Manufacturing glitches and mishaps have haunted even the largest, most experienced drug companies with costly product recalls, shutdowns and multimillion-dollar fines for safety and quality issues.

The constraints and restrictions on sales and marketing activities have made efforts to promote their products near impossible. The call for transparency has now made all compensation and perks provided to physicians a matter of public record. An increasingly managed market now expects drug companies to actually prove their products are worth the prices they are charging. And U.S.-based companies can no longer seek tax relief by doing a paper move of their headquarters to a more tax-favorable country.

Despite these challenging business issues, here's why I don't feel sorry for Big Pharma. First, and most importantly, all of these issues were predictable and could have been either avoided or managed to a more positive outcome.

This isn't just hindsight. These issues have been brewing and evolving for more than two decades. For whatever reason, executives have been in a state of denial, arrogantly ignoring the potential consequences, or dismissing detrimental trends as not important. Unfortunately, the rank and file of Big Pharma organizations have been expected to find ways to deal with the challenges created by executives unwilling to accept and address the inevitable.

So are Big Pharma companies hurting financially? Not really. Many have billions in cash if not tens of billions of cash. They spend billions on research with little to show for it. Despite the fact that most physicians won't see them, Big Pharma still spends billions on sales and sales support. And I can't imagine what Big Pharma spends on television and Internet marketing.

Medicare provides them an unencumbered government-funded market, and they still have virtually no barriers to pricing, even for generic drugs. They can spend billions on acquisitions that don't create any new products. They can buy their way out of legal and regulatory challenges by paying millions and billions in fines and settlements.

And even if they can't complete an M&A deal, they can just write off millions and billions in breakup fees that generate no value but leave the tax payers with the bill. And, of course, they can continue to pay their executives tens of millions of dollars a year in compensation despite questionable organizational performance.

So. Feel sorry for Big Pharma? No. Wish they would do better? Yes. Think they will?