Are Drug Companies Faking an Innovation Crisis? Uh, No.

By Guest Blogger | August 16, 2012 12:39 pm

drugs

Derek Lowe is a medicinal chemist who has worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer’s, diabetes, osteoporosis, and other diseases. He has been writing about drug discovery at In the Pipeline, where this post originally appeared, for more than ten years.

The British Medical Journal says that the “widely touted innovation crisis in pharmaceuticals is a myth.” The British Medical Journal is wrong.

There, that’s about as direct as I can make it. But allow me to go into more detail, because that’s not the the only thing they’re wrong about. This is a new article entitled “Pharmaceutical research and development: what do we get for all that money?”, and it’s by Joel Lexchin (York University) and Donald Light of UMDNJ. And that last name should be enough to tell you where this is all coming from, because Prof. Light is the man who’s publicly attached his name to an estimate that developing a new drug costs about $43 million dollars.

I’m generally careful, when I bring up that figure around people who actually develop drugs, not to do so when they’re in the middle of drinking coffee or working with anything fragile, because it always provokes startled expressions and sudden laughter. These posts go into some detail about how ludicrous that number is, but for now, I’ll just note that it’s hard to see how anyone who seriously advances that estimate can be taken seriously. But here we are again.

Light and Lexchin’s article makes much of Bernard Munos’ work (which we talked about here), which shows a relatively constant rate of new drug discovery. They should go back and look at his graph, because they might notice that the slope of the line in recent years has not kept up with the historical rate. And they completely leave out one of the other key points that Munos makes: that even if the rate of discovery had remained linear, the costs associated with it sure as hell haven’t.

No, it’s all a conspiracy:

“Meanwhile, telling “innovation crisis” stories to politicians and the press serves as a ploy, a strategy to attract a range of government protections from free market, generic competition.”

Ah, that must be why the industry has laid off thousands and thousands of people over the last few years: it’s all a ploy to gain sympathy. We tell everyone else how hard it is to discover drugs, but when we’re sure that there are no reporters or politicians around, we high-five each other at how successful our deception has been. Because that’s our secret, according to Light and Lexchin. It’s apparently not any harder to find something new and worthwhile, but we’d rather just sit on our rears and crank out “me-too” medications, drugs similar to those that already exist, for the big bucks:

“This is the real innovation crisis: pharmaceutical research and development turns out mostly minor variations on existing drugs, and most new drugs are not superior on clinical measures. Although a steady stream of significantly superior drugs enlarges the medicine chest from which millions benefit, medicines have also produced an epidemic of serious adverse reactions that have added to national healthcare costs.”

So let me get this straight: according to these folks, we mostly just make “minor variations,” but the few really new drugs that come out aren’t so great either, because of their “epidemic” of serious side effects. Let me advance an alternate set of explanations, one that I call, for lack of a better word, “reality.” For one thing, “me-too” drugs are not identical, and their benefits are often overlooked by people who do not understand medicine. There are overcrowded therapeutic areas, but they’re not common. The reason that some new drugs make only small advances on existing therapies is not because we like it that way, and it’s especially not because we planned it that way. This happens because we try to make big advances, and we fail. Then we take what we can get.

No therapeutic area illustrates this better than oncology. Every new target in that field has come in with high hopes that this time we’ll have something that really does the job. Angiogenesis inhibitors. Kinase inhibitors. Cell cycle disruptors. Microtubules, proteosomes, apoptosis, DNA repair, metabolic disruption of the Warburg effect. It goes on and on and on, and you know what? None of them work as well as we want them to. We take them into the clinic, give them to terrified people who have little hope left, and we watch as we provide with them, what? A few months of extra life? Was that what we were shooting for all along, do we grin and shake each others’ hands when the results come in? “Another incremental advance! Rock and roll!”

Of course not. We’re disappointed, and we’re pissed off. But we don’t know enough about cancer (yet) to do better, and cancer turns out to be a very hard condition to treat. It should also be noted that the financial incentives are there to discover something that really does pull people back from the edge of the grave, so you’d think that we money-grubbing, public-deceiving, expense-padding mercenaries might be attracted by that prospect. Apparently not.

drugs

The same goes for Alzheimer’s disease. Just how much money has the industry spent over the last quarter of a century on Alzheimer’s? I worked on it twenty years ago, and God knows that never came to anything. Look at the steady march, march, march of failure in the clinic—and keep in mind that these failures tend to come late in the game, during Phase III, and if you suggest to anyone in the business that you can run an Alzheimer’s Phase III program and bring the whole thing in for $43 million dollars, you’ll be invited to stop wasting everyone’s time. Bapineuzumab’s trials have surely cost several times that, and Pfizer/Johnson & Johnson are still pressing on with it. And before that you had Elan working on active immunization for Alzheimer’s, which is still going on, and you have Eli Lilly and Co’s antibody trials, which are still going on, and Genentech’s (which are still going on). No one has high hopes for any of these, but we’re still burning piles of money to try to find something. And what about the secretase inhibitors? How much time and effort has gone into beta- and gamma-secretase? What did the folks at Lilly think when they took their inhibitor way into Phase III only to find out that it made Alzheimer’s slightly worse instead of helping anyone? Didn’t they realize that professors Light and Lexchin were on to them? That they’d seen through the veil and figured out the real strategy of making tiny improvements on the existing drugs that attack the causes of Alzheimer’s? What existing drugs to target the causes of Alzheimer’s are they talking about?

Honestly, I have trouble writing about this sort of thing, because I get too furious to be coherent. I’ve been doing this sort of work since 1989, and I have spent the great majority of my time working on diseases for which no good therapies existed. The rest of the time has been spent on new mechanisms, new classes of drugs that should (or should have) worked differently than the existing therapies. I cannot recall a time when I have worked on a real “me-too” drug of the sort of that Light and Lexchin seem to think the industry spends all its time on.

That’s because of yet another factor they have not considered: simultaneous development. Take a look at that paragraph above, where I mentioned all those Alzheimer’s therapies. Let’s be wildly, crazily optimistic and pretend that bapineuzumab manages to eke out some sort of efficacy against Alzheimer’s (which, by the way, would put it right into that “no real medical advance” category that Light and Lexchin make so much of). And let’s throw caution out the third-floor window and pretend that Lilly’s solanezumab actually does something, too. Not much—there’s a limit to how optimistic a person can be without pharmacological assistance—but something, some actual efficacy. Now here’s what you have to remember: according to people like the authors of this article, whichever of these antibodies that makes it though second is a “me-too” drug that offers only an incremental advance, if anything. Even though all this Alzheimer’s work was started on a risk basis, in several different companies, with different antibodies developed in different ways, with no clue as to who (if anyone) might come out on top.

All right, now we get to another topic that articles like this latest one are simply not complete without. That’s right, say it together: “Drug companies spend a lot more on marketing than they do on research!” Let’s ignore, for the sake of argument, the large number of smaller companies that spend all of their money on R&D and none on marketing, because they have nothing to market yet. Let’s even ignore the fact that over the years, the percentage of money being spent on drug R&D has actually been going up. No, let’s instead go over this in a way that even professors at UMDNJ and York can understand it:

Company X spends, let’s say, $10 a year on research. (We’re lopping off a lot of zeros to make this easier). It has no revenues from selling drugs yet, and is burning through its cash while it tries to get its first on onto the market. It succeeds, and the new drug will bring in $100 dollars a year for the first two or three years, before the competition catches up with some of the incremental me-toos that everyone will switch to for mysterious reasons that apparently have nothing to do with anything working better. But I digress; let’s get back to the key point. That $100 a year figure assumes that the company spends $30 a year on marketing (advertising, promotion, patient awareness, brand-building, all that stuff). If the company does not spend all that time and effort, the new drug will only bring in $60 a year, but that’s pure profit. (We’re going to ignore all the other costs, assuming that they’re the same between the two cases).

So the company can bring in $60 dollars a year by doing no promotion, or it can bring in $70 a year after accounting for the expenses of marketing. The company will, of course, choose the latter. “But,” you’re saying, “what if all that marketing expense doesn’t raise sales from $60 up to $100 a year?” Ah, then you are doing it wrong. The whole point, the raison d’etre of the marketing department is to bring in more money than they are spending. Marketing deals with the profitable side of the business; their job is to maximize those profits. If they spend more than those extra profits, well, it’s time to fire them, isn’t it?

R&D, on the other hand, is not the profitable side of the business. Far from it. We are black holes of finance: huge sums of money spiral in beyond our event horizons, emitting piteous cries and futile streams of braking radiation, and are never seen again. The point is, these are totally different parts of the company, doing totally different things. Complaining that the marketing budget is bigger than the R&D budget is like complaining that a car’s passenger compartment is bigger than its gas tank, or that a ship’s sail is bigger than its rudder.

OK, I’ve spend about enough time on this for one morning; I feel like I need a shower. Let’s get on to the part where Light and Lexchin recommend what we should all be doing instead:

What can be done to change the business model of the pharmaceutical industry to focus on more cost effective, safer medicines? The first step should be to stop approving so many new drugs of little therapeutic value. . .We should also fully fund the EMA and other regulatory agencies with public funds, rather than relying on industry generated user fees, to end industry’s capture of its regulator. Finally, we should consider new ways of rewarding innovation directly, such as through the large cash prizes envisioned in US Senate Bill 1137, rather than through the high prices generated by patent protection. The bill proposes the collection of several billion dollars a year from all federal and non-federal health reimbursement and insurance programmes, and a committee would award prizes in proportion to how well new drugs fulfilled unmet clinical needs and constituted real therapeutic gains. Without patents new drugs are immediately open to generic competition, lowering prices, while at the same time innovators are rewarded quickly to innovate again. This approach would save countries billions in healthcare costs and produce real gains in people’s health.

One problem I have with this is that the health insurance industry would probably object to having “several billion dollars a year” collected from it. And that “several” would not mean “two or three”, for sure. But even if we extract that cash somehow—an extraction that would surely raise health insurance costs as it got passed along—we now find ourselves depending on a committee that will determine the worth of each new drug. Will these people determine that when the drug is approved, or will they need to wait a few years to see how it does in the real world? If the drug under- or overperforms, does the reward get adjusted accordingly? How, exactly, do we decide how much a diabetes drug is worth compared to one for multiple sclerosis, or TB? What about a drug that doesn’t help many people, but helps them tremendously, versus a drug that’s taken by a lot of people, but has only milder improvements for them? What if a drug is worth a lot more to people in one demographic versus another? And what happens as various advocacy groups lobby to get their diseases moved further up the list of important ones that deserve higher prizes and more incentives?

These will have to be some very, very wise and prudent people on this committee. You certainly wouldn’t want anyone who’s ever been involved with the drug industry on there, no indeed. And you wouldn’t want any politicians—why, they might use that influential position to do who knows what. No, you’d want honest, intelligent, reliable people, who know a tremendous amount about medical care and pharmaceuticals, but have no financial or personal interests involved. I’m sure there are plenty of them out there, somewhere. And when we find them, why stop with drugs? Why not set up committees to determine the true worth of the other vital things that people in this country need each day—food, transportation, consumer goods? Surely this model can be extended; it all sounds so rational. I doubt if anything like it has ever been tried before, and it’s certainly a lot better than the grubby business of deciding prices and values based on what people will pay for things (what do they know, anyway, compared to a panel of dispassionate experts?)

Enough. What we have here is someone’s fantasy about how drug discovery works, not the reality. Profs. Light and Lexchin don’t seem to have noticed that the pharma industry has been laying off thousands of people in recent years, or that the stocks of most of the publicly traded companies haven’t been very strong investments. If it’s as easy (and as cheap) to discover new drugs as they claim, we should be fighting off the investors, but where are they? Drug companies are certainly not consistent angels, but neither are they devils—and the last thing they are is lazy and complacent devils, at that.

Pill images via Shutterstock

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