After a 100 years or so of drug development, the pharmaceutical industry finds itself in a difficult predicament. The environment for developing new therapeutics has changed so radically during the past decade that those companies that persist in the" classic" approach to developing therapeutics---the screening of chemical compounds for potential therapeutic effects on unknown targetsare almost certainly doomed to failure. As a result, if pharmaceutical companies persist in developing drugs in this way, there can only be one result: Fewer drugs, fewer companies, and little or no growth in the quality of health care worldwide.

Pharmaceutical companies facing this dilemma have two options:" Defensive" strategies or" offensive" strategies. The defensive posture aims to increase the volume of sales by managing or collaborating in drug-distribution networks, and by marketing generic medicines." Offensive" strategies mobilize resources to build innovative new drugs quickly and efficiently to serve untapped markets in novel ways. To accomplish this, a company must focus on the quality of its new products and believe that it will be compensated for delivering better drugs. The tool that makes the" innovative" strategy possible is genomics. A careful analysis of the Human Genome Project's potential suggests that 3,000-10,000 interesting new molecular sites for intervention-" drug targets" in the pharmaceutical vernacular-may emerge from it over the course of the next six years. This is an order of magnitude greater than the number of targets for which we have drugs today. To develop this potential will require a level of collaboration unforeseen in the pharmaceutical industry to date. Biotechnology companies and academic institutions will have a major role to play in helping to develop these new drugs.