The fight between Abbott Laboratories and Cambridge Antibody Technology over two partly overlapping royalty-giveback clauses in their contract on Humira has implications far beyond the money--which itself is not inconsiderable. Abbott could theoretically save itself some $60 million in royalty fees, but it could also win itself a name for playing hardball with its partners, even in the event of a major drug development success.

Europe presents a big opportunity--but also significant challenges--to niche players seeking to expand. Some firms--such as US group Cephalon--have bought big in Europe, others like Shire and Celltech have made do with smaller acquisitions onto which they hope to build their own tailored infrastructure. No single approach is the same, and none has yet proven a clear winner. But all depend on finding the right products.

We're still in the iron lung age of Alzheimer's treatment. When the new Jonas Salk comes along, ideas will change dramatically.

Merck's goal is to build a leading position in specialty OTCs as well as a worldwide generics business, both goals designed to offset the risks of its R&D program. Its new business allows it to use its size as an advantage against smaller, specialized players while avoiding direct competition with the larger multinationals.