A number of people have sent along this article from The Guardian. It’s about Jamie Love, a campaigner for cheaper pharmaceuticals. It’s a long, well-written piece, and I’ll summarize it only by saying that Love is very much opposed to the patent system, is very much a fan of compulsory licensing, and is clearly very concerned about the welfare of the poorest patients. I will say nothing bad about him as a person.
But he (and many of the other people in the article) have, I think, some mistaken ideas about where drugs come from. In fact, you can read most of the article and not have much of an idea. It seems, apparently, that drugs are picked off some sort of tree, or perhaps mined from the earth in a few locations that the big multinational companies have staked out. Once they appear above ground, through whatever process that is – it’s not really important – they should be free, or as close to free as possible. It’s just common sense.
Only well on in the article does the topic of drug discovery actually come up, and it does so in terms that get used again and again:
Big Pharma has a simple justification for charging high prices for drugs: it costs a lot of money to invent a medicine and bring it to the market, so the prices have to be high or the companies will be unable to afford to continue their important research and development (R&D). The figures drug companies usually cite are from the Tufts Center for the Study of Drug Development in Boston, Massachusetts, which describes itself as an independent academic institution, despite the fact that it receives 40% of its funding from industry. In 2000, it put the cost of bringing a drug to market at $1bn. By 2014, that had risen to $2.6bn.
But those figures have been contested by Love and other campaigners. Many drugs begin as a gleam in the eye of a university researcher: somebody in academia has a bright idea and pursues it in the lab. Much medical research is funded by grants from public bodies, such as the US National Institutes of Health, or, in the UK, the Medical Research Council. When the basic research looks promising, the compound is sold, often to a small biotech firm.
No. No. This is not how it works. With rare exceptions, which can be easily counted on the fingers, the “compound” is not invented in academia. Update: I’m exaggerating, but for some real figures, see here. I’ve discussed here, many times, the relationship between academic research and drug discovery, but if you’re looking for the most unusual form of it, that would be where the actual drug gets found at the university.
The article mentions that Love’s wife, Manon Ress, unfortunately has breast cancer. She’s taking Kadcyla, and both she and Love have been campaigning for the UK government to break Roche’s patent and license it – the UK could even sell it to others, Love says, and make some money back that way. Where exactly did Kadcyla come from, anyway? It’s a conjugate of the antibody Herceptin with a cytotoxic agent, DM-1, which is a linked form (mertansine) of maytansine. Both of these go back a ways.
Here’s a Herceptin timeline, which has a lot to do with the founding of Genentech back in the 1980s. Genentech was clearly a major driver in the Her2/EGFR field, although there was also a large amount of academic research in the area as well. But the first people to sequence Her2 and clone it were from Genentech, and the first people to develop a monoclonal antibody to it (first in mice, then humanized) were as well. Now, the idea that there were genes such as Her2 that were associated with increased risk of cancer came from academic research, as did the first techniques for making monoclonal antibodies. But that illustrates the way these two research types work with each other. More often than not, academic research discovers general principles and concepts, while industrial research reduces them to practice as medicines. If you believe that this reduction to practice is basically trivial, once the first discovery has been made, you are wildly incorrect, and I only wish that you could try it sometime to experience it firsthand.
Maytansine, the other part of Kadcyla, is even older. It goes back to the late 1960s/early 1970s, when it was discovered in an Ethiopian plant by Morris Kupchan and co-workers (he was a very active natural products chemist at Wisconsin and Virginia). There, indeed, is an academic discovery, funded by public money, but it did not lead to a drug. Maytansine had a lot of excitement around it later on in the 1970s as a potential anticancer agent, but it failed in the clinic, largely because it was unacceptably toxic. (The first summer undergraduate research I ever did, back in 1981, was towards a total synthesis of maytansine). A great number of modifications have been made to the structure over the years, both in academia and in industry, without producing a successful drug.
But the idea of coupling a maytansinoid to a selective antibody promised to get around this problem, and this has been pursued by a company called Immunogen, who licensed Kadcyla to Roche (they have deals with several other companies as well). We no longer have to strip Ethiopia of the source plant to make such therapies (a real concern during the 1970s work), because another drug company, Takeda, figured out that maytansine and several analogs are, in fact, produced by microorganisms, not by the plant itself, which led to fermentation techniques that produce the compound in the lab. Kadcyla, then, is not one of those compounds that people at the Guardian (and many others) imagine are produced by professors and then snatched up by industry. A great deal of industrial time, effort, and money has gone into every part of it, and – how do I put this? – the people developing it, at every stage, did so in the expectation that they could make money by doing it.
Kadcyla, Manon Ress reports, has been much easier to deal with than the chemotherapy drugs she was receiving before. That is no doubt true, and in fact, I also have no doubt that Roche was planning on that being the case. In fact, they probably counted on people (and their insurance companies) being willing to pay for that benefit. Here is a dirty little secret that’s not actually a secret, and (truth be told) not all that dirty, either: drug companies try to make money. (And off people being sick!) But it’s true. Even inside the large companies, there are all these slogans about how we do it all for the patients, etc. But we do it to make money, too, because without the money it’s very hard to do much for any patients, anywhere.
And as fate would have it, often (although not always) some of the biggest and most important medical needs turn out also to be the places where one could make the most money. It’s as if some sort of “invisible hand” is bringing these things together. That way, we don’t have to depend on everyone running a drug company to have the highest ideals in their heart – if they’re good at their jobs, they’ll end up doing the world good even if they’re not very nice people themselves. It’s not just drug companies that work this way, either. We can harness the behavior of people as they are, rather than the way they should behave if they were as good as they could possibly be. To quote the fellow who came up with that line about the invisible hand, “It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest“.
Every time the topic of drug pricing comes up, I’m going to refer people to Jack Scannell’s article on it. Are drugs priced based on their ingredients? Hardly, although the Guardian article acts as if this were some damning revelation. Anyone who finds it so should compare the cost of the next salad they have in a restaurant with the cost of lettuce and tomatoes down at the store. It’s like buying a piece of software by downloading it from the manufacturer’s site: let’s say that you pay $39.95 for it – but look at the cost of the electricity over those few minutes it took to arrive on your computer! That was nowhere near $39.95! Another factor Scannell brings up is that drugs may well be priced based on what they can do for you, what value you place on their effects. Like that salad – did you enjoy it? Or like that software – was it useful? Did taking that medicine improve your life? Is Kadcyla keeping you alive?
It may be, actually, but it may not be doing so for as long as we would wish. One reason the UK health authorities refused, at first, to play for the drug was that they felt that its cost/benefit ratio was not justified. And that’s fine – Roche and the government did, in the end, come to terms on a discount, although the government will not pay for Kadcyla in all cases. I have no problem with this sort of pushback – in fact, I think that’s exactly what should happen. The problem with value-based pricing, Scannell argues, is that it’s often not clear (especially at first) what value to place on a new drug. How long will Kadcyla keep you alive, anyway? There’s no way to say when you start taking it. Different people will react differently – all anyone can give you are averages, and even those take a while to come in under real-world conditions. (And, as he notes, the health services of different European countries can end up assigning different values to the same drug).
Now, it’s true that I’m quoting Adam Smith and so on, when the drug business is far from an ideal free market. For one thing, drug patents are government-granted monopolies – competition on a new drug is deferred until that patent expires, as a reward for the difficulty of invention. (The Guardian article makes sure to mention that this can be “up to twenty years” without mentioned that a good part of that time is eaten up before the compound ever makes it to market). And pricing is hardly transparent, which is a big problem, because that information is crucial to making decisions in any kind of marketplace. There are also, most certainly, market failures, where the societal value of a new drug is not well-coupled to its potential for profit.
But overall, the system does some good things. Drugs do go generic, and if we take care to make sure that people don’t turn generic drugs into monopolies as well, we end up with a large collection of effective therapies that are quite cheap, while preserving the prizes that keep companies chasing after newer ones (which go generic in turn). The great majority of prescriptions, remember, are for generic drugs.
The problem I have with the worldview of Jamie Love et al. is not their compassion for their fellow man. It’s that I still fear that they have an inaccurate view of where all these drugs come from, which leads them to imagine that prices can be slashed across the board without really affecting that process much. Drugs, they seem to believe, are really a lot easier and cheaper to find and develop than anyone is willing to say, so all we need to do is dig into the bulging, obscene profits of the drug companies, and everything will work out fine. But if those profits are so hefty, how come drug company stocks don’t perform better? Whey don’t they come up with more drugs? Why, when you divide out their revenues by the number of drugs discovered over the years, do the figures come out so annoyingly high? How come people aren’t lining up to discover more drugs, if it’s that inexpensive to do? Where are the not-that-hard Alzheimer’s drugs, the easy cancer cures? A lot of what goes on out here in the real world would seem to argue against Jamie Love’s idea of how things work.