In his first year of med school, Tim Anderson, MD, VP, global pharmaceuticals analyst at Sanford C. Bernstein & Co., realized that medicine wasn’t as exciting as he had hoped. However, he really enjoyed the business side of healthcare, and so he earned MD and MBA degrees (near simultaneously) from The University of Chicago in the mid-1990s.
“I had no master plan at the outset,” says Anderson. “I wanted to figure out how to use my medical knowledge differently. I didn’t know exactly what I was going to do with an MD and MBA.”
During an ER shift at a Harvard hospital in the late 1990s, a physician friend suggested that Anderson consider an analyst job. Anderson went to work for Prudential Equity Group, where he stayed until joining Sanford C. Bernstein in 2007. He still keeps his medical license active and reads medical literature, which helps him do his job. Anderson likes the challenge of identifying relevant questions about what factors drive a pharma company and then digging for correct answers, which he says aren’t always readily apparent. “You must do your own due diligence and tire kicking to come up with the truth behind any situation,” he says. “It’s about pulling on all resources to try and get the hard answers companies aren’t always willing to give.”  
Unlike most of his peers, Anderson covers both the US and Europe. This broad perspective helps him better cover US companies and see synergies between companies that his colleagues might miss by only focusing on the US. 
“One of the biggest challenges is the patent cliff that climaxes in 2011 and 2012,” he says. “It will be transformative for many companies. A lot have three or four big drugs that will go off patent. It will really rock their businesses and force them to change how they view the world. Investors are very focused on this now.”
On the bright side, Anderson notes many companies have refocused efforts on R&D, and he sees slowly improving pipelines. 
“At some point…[the patent cliff] will move into the past,” Anderson says. “Pipelines will get better. It’s all going to click, and prices will go up again.”
Anderson cites Schering-Plough and Wyeth as particularly sustainable through the cliff. He notes that Schering-Plough’s first patent doesn’t expire until 2017, and he thinks it has “one of the most commercially meaningful pipelines,” citing a potential launch this year of an arthritis drug and a 2011 launch of a blood clot prevention drug currently called TRA. 
“When you…layer [those pipeline products] on a base that doesn’t have a lot of patent expirees, you have a company that has the best earning growth profile from 2009 -2015—despite all the mess that happened with their cholesterol product in 2008,” Anderson says. 
While some Wyeth products will expire soon, Anderson thinks the company has a “favorable generic profile” from 2011 on. He also sees Wyeth as a likely acquisition target. “The more I talk to drug company CEOs, everyone seems to think there’ll be some consolidation,” Anderson says. “It’s not something a lot of CEOs stand in front of podium and talk about, but when you get them aside they seem to be thinking there’ll be some consolidation. That’s a change in sentiment from one or two years ago.”  
As far as government challenges go, Anderson doesn’t think the Obama administration will have any real impact on FDA approvals, but he thinks it will impact pricing reform in Medicare. He adds that the FTC wants to block deals to delay generic competition, which Congress could allow, and that Congress and insurance companies will push to find a way for FDA approval of generic biologics. He also notes that some in Congress—notably Rep. Henry Waxman (D-CA)—are bent on limiting DTC advertising. 
“There’s never a day that I’m not interested in what’s going on in pharma,” Anderson says. “It’s such a dynamic field across multiple fronts. There’s always stuff to dig into.” 

HEADLINER STATS
Tim Anderson, MD
VP, global pharmaceuticals analyst, 
Sanford C. Bernstein
1998-2007
SVP, global pharma analyst, 
Prudential Equity Group
1996-98
Resident physician, department of emergency medicine, 
Harvard Medical School