The pharmaceutical industry is facing enormous challenges, including reduced efficiency, declining innovation, key patent expirations, fierce price competition from generics, high regulatory hurdles, and a tarnished image. There is a clear need for change in the paradigms designed to address these challenges. Pharma has responded by embarking on a range of initiatives. However, along the way the industry has accrued critics whose accusations have tainted its reputation. The first part of this two-part series will discuss the criticisms that have been leveled at the pharmaceutical industry and summarize the supporting data for and against these criticisms. The second installment will focus on the current challenges facing the pharmaceutical industry and Pharma's responses to address these challenges. It will describe the industry's changing perspective and new business models for coping with the recent loss of talent and declining clinical pipelines as well as present some examples of recent drug discovery successes.