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A Call For Academic Drug Companies

An editorial in Cell asks “How Much Longer Will We Put Up With $100,000 Cancer Drugs?” I’m of two minds on questions like that. OK, three minds. The immediate impulse, not an honorable one, is to respond with pure snark, which is always tempting, in the vein of “If you can keep your company going while pricing these things so much lower, come on down and do it”. But that’s not doing anyone any good, and besides, the second impulse is to agree with them. Some of these drugs are almost certainly priced off what they should or could be, given their widely varying clinical impact. The market for pharmaceuticals is not exactly an open, transparent, price-discovering one. Just to pick out one complication, complaints about drug pricing often are based on list price, even when hardly anyone or anything actually pays it. But figuring out what price is actually being paid is difficult to impossible. And the third response is a more pragmatic one – the worry that whether these prices are appropriate or not, they end up looking like a tempting political target, especially in the current environment (more on that in a later post today).

This new article is more focused on trying to lower the cost of drug development, which I think is a worthy goal, of course. Here’s one factor:

One element that contributes significantly to the high cost of cancer drugs is the inefficiency of the overall commercial enterprise. As one recent example, there are currently 803 clinical trials testing checkpoint immune-therapeutics (at least 12 antibodies from a dozen different pharma companies), which together plan to enroll over 166,000 patients (Brawley, 2016). There is enormous redundancy in these studies, as many pharmaceutical companies perform similar trials with comparable drugs, but fail to share the data generated. This herd mentality is caused in part by the notion that immune checkpoint therapies can indeed lead to long-lasting remissions (potentially even to cures) and that significant numbers of patients in each clinical indication benefit from these treatments. While it is in the short-term good that so many patients get access to potentially lifesaving drugs, in the longer term, patients will have to pay the price for this inefficiency and duplication.

This is a mixed bag of statements, since later on in the article there’s a mention of inefficiencies from not trying out combination therapies. But many of those clinical trials listed *are* combination therapy trials. One problem is that we don’t even know if (as said above) that the various drugs are comparable or not. Where I think some of the biggest market-driven inefficiencies lie is in not having, say, some big head-to-head trials of Opdivo and Keytruda. Merck and BMS use different antibody assays in their clinical work, and it’s hard to make direct comparisons. I would also note that the point above about inefficiency will be magnified, severely, under a “right to try” regulatory regime, or many of the other proposals that have been floated to loosen the FDA’s efficacy requirement. As Biocentury notes, the former is getting a big push now, since Vice President Pence signed such legislation while governor of Indiana. We could simultaneously end up with a lot more people taking investigational drugs while getting a lot less useful data out of it, which seems like a worst-of-both-worlds situation when you’re talking about the efficiency and cost of the whole process.

The Cell article goes on to cite the “frequent absence of a rigorous biomarker program” as another factor hurting efficiency in clinical trials. That seems quite odd, given that the industry has poured vast amounts of money and effort into identifying biomarkers for just that reason. Neither has academia covered itself in glory during this quest. And that brings up something else that applies to the whole article – nowhere in it (at least to my eyes) do you get a sense that drug companies themselves are interested in making drug development more efficient, when just the opposite is the case. The current system is in danger of killing us; we need all the help we can get to raise our success rates.

After concluding that large drug companies are inefficient because they’re large, and small drug companies are inefficient because they’re small (no, really, that’s pretty much how the article goes), the authors then propose to do drug discovery and development without drug companies at all. No, really, that’s, uh, pretty much how the article goes. “Many of the fundamental discoveries that formed the basis for new categories of cancer drugs were made by academia”, it says, which is certainly true, but leaves out that basically all of the work that transformed these discoveries into human therapies was done by industry. When people say that a drug was “developed” by an academic team, what’s often meant is that, at best, the molecule itself was found in academia, and most of the time it’s not even that. Toxicology, pharmacokinetics, formulation, the design and running of the clinical trials themselves – these things are not trivial, to say the least of it, and they are rarely done in an academic setting. The authors are aware of this, though:

There are three main reasons why academic drug development typically stalls at the stage of clinical testing. First, the stringent quality control over the large-scale manufacturing of clinical grade drugs and their formulation is not a routine skill of academic groups. Second, the funds to support the high cost of performing non-clinical regulatory toxicology studies and clinical trials are hard to raise by non-profit organizations. Third, even when these first two steps could be executed, academic drug discovery and development units are not equipped to handle marketing and sales of approved drugs. Yet, it is at the level of commercialization that the interests of large pharma to maximize return on investment are diagonally disparate from the typically idealistic motivation that drives most academics to spend countless hours at modest compensation to solve important problems in oncology. Nevertheless, academics are driven into the arms of big pharma after initial proof of concept clinical trials for the reasons listed above. While it is gratifying for most academic investigators to see their discoveries reach the clinic, it leaves them unable to influence the pricing of “their” drugs when they reach the market.

Ah, but after everyone else has done all that work, put in all that time, and spent all that money, it’s not the original discoverer’s drug any more, to be blunt about it. When they discovered it, it wasn’t a drug yet, just a promising candidate, and there are plenty of those. The paper calls for “concerted multidisciplinary team efforts that are adequately financed and staffed with scientists having all the required expertise to enable drug discovery”, and yeah, that’s what you’re going to need, for sure. Here’s more:

A key advantage of academic drug discovery is the freedom and indeed incentivization to tackle major challenges that would be viewed as too risky by big pharma and even by many biotech companies. Currently only a fraction of the cancer genes listed in the Cancer Gene Census have drugs or chemical leads that act on the cognate protein. This means that there are very large numbers of cancer genes that remain to be drugged. For example, we have no drugs that work directly on mutant KRAS, mutant p53 or MYC. Hence there is a huge amount of work to be done to complete the job of drugging of the cancer genome.

That first part has some truth in it, although I have to note that all three of those targets listed have had substantial resources spent on them for many years by the drug industry already. It’s not that these great ideas have been sitting there because companies won’t work on them, believe me. We have worked on them, and failed. I should also note that when progress does get made on one, what happens is that the work becomes the basis for a new company and/or a partnership with a large one.

The authors suggest that this latter process needs to be broken up, and they suggest that academic partnering with generic firms might be a route to that, since “generic drug makers are used to working with lower profit margins”. The idea is that the candidates coming from the academic consortia will be “de-risked” to the point that it’ll be similar to developing generics, apparently, but I don’t see how that can possibly be true. Especially not a couple of paragraphs down from where you were talking about drugging KRAS and cMyc. You can’t have it both ways. Innovative drugs are never “de-risked” when they’re going into the clinic.

Two elements will be mission critical for this model to succeed. First, academic organizations will need to abide by their societal responsibility and resist the temptation to sell their drug candidate to the highest bidder. Second, it will be imperative that agreements on price caps are part of the negotiations with potential investors or with companies that take forward drugs arising from academic drug development. Ideally, this approach would also be accompanied by pricing strategy leading to affordable drug cost in middle- and low-income countries, thereby reducing inequality in global cancer therapy. Given the substantial de-risking achieved prior to commercialization, our model should be attractive to these parties and their investors. The academic drug discovery and development units could be sustained in this model by receiving royalties on sales of the drugs they originated.

Asking research universities to pass up an opportunity for profit has traditionally been a low-percentage move – apparently, to date, they have not been abiding by their societal responsibility. It’s also not clear how the pitch to investors will go, as long as these are investors under the usual dictionary definition of the term. These elements, which are correctly described as critical, come down to “and then everyone will act differently than they have so far”, which is a tough thing to have on the flow chart. For all the rest of the paper’s discussion of the technical aspects of drug discovery, it all hinges on (as Adam Smith would have put it) expecting dinner via “the benevolence of the butcher, the brewer, or the baker”. And of course, he explicitly warned that this was not the case.

This isn’t a conclusion that I necessarily find comforting. If (and there are a lot of ifs) such academic consortia could produce drugs for lower cost, that would be a relatively benign way of bringing those prices down. I just have trouble picturing it actually happening. There are other mechanisms by which drug prices can be brought down, and some of them aren’t all that benign. Those, I can picture.

54 comments on “A Call For Academic Drug Companies”

  1. anonymous says:

    Question: A Call For Academic Drug Companies.
    Answer: Seriously? Will not happen! I have been there and done that, it will not happen. Academia has different sets of rules and more critically, time is not an essence. We are not doing earth shattering research but when I approached the patent/tech. department, they balked and get ready for this-we need to write paper first! My take is people in academia are motivated by the likes of Silverman (lyrica) and Liotta (RT inhibitors) but they do not have an attitude or luck to back it up! And, your collaborators priority may not be your’s. There are just one too many problems to list it up here. If the big pharma is an equivalent Walmart (Super Walmart!) the academia are your typical small papa/mom stores. Frankly, after sometime I gave up and am doing just enough to keep afloat. The system can drag you down, even though you may be from the best pharma company in your previous avatar!

    1. mallam says:

      But remember in Silverman’s situation, he made the compound to interact on a specific target but when screening in biological assays worked for the current purpose according to a different mechanism. Plus his most potent compound on the desired target is not the drug Lyrica because of the target switch. Would an academic consortium be able to deal with this serendipity? Very unlikely.

  2. Hap says:

    1) If your system requires people to be completely different than they are now without changing the things that cause them to behave so (requiring you to have the powers of a deity), then it is not a reasonable system.

    2) Someone must have a lot more optimistic view of universities and their (un)willingness to leave money on the table than I do.

  3. Dionysius Rex says:

    Do you think a system of a limited number of tradeable clinical trial tickets might solve the issue? Say 5 trial tickets per year for AML, 25 for lung…..they could be auctioned at the start of the year to help fund the FDA. I think this would encourage much more in the way of collaborative thinking, and smarter thinking all round

  4. CMCguy says:

    Gosh if Drug development was so simple and pharma not so greedy there would be no pressure on increases on new products. Not sure their model would work any better in the long run. While certainly “generic drug makers are used to working with lower profit margins” that’s because they rarely burdened with all the costly efforts needed to support new unapproved drugs with out a history follow. Based on experiences I see generic companies are often little more aware than academics of the entire process except for limited aspects manufacturing and quality areas were even there frequently will do only enough to get by in producing an established drug where scrutiny has different focus. I think this is directed to academics and politicians as ammunition without offering much wisdom or viable options for meaningful improvements.

    I do agree with the thought where Big is often now too Big and Small is always too Small however since there are few Mediums around anymore that might be more effective the inefficiencies exacerbate the problems.

  5. RET says:

    After reading many of these editorial solutions to the drug discovery problem, and the excellent, subsequent commentary, it is clear to me that the first thing that needs to be done is to promote greater collaboration in writing up editorial solutions.

  6. MrRogers says:

    The herd mentality isn’t just a problem in industry. All you have to do is look at the number of academic job postings in immunooncology right now. The larger problem is that the time it takes to leverage a discovery into a drug is so discordant with career stepping stones that the system can be easily gamed. If the process from discovery to trial outcome were shorter, then it would be possible to identify individuals/systems that are more efficient and they would be able to take over. As it stands, until reliable milestones (that predict drug success) can be identified with timeframes that match career milestones, we’ll be left with an inefficient system where the herd is the safe place to be.

  7. Idealist-skeptic says:

    Why not fund *some* drug trails through the NIH or similar? Candidates would have to be very well supported academically, and have had great results in Phase I/II trials. I don’t know what criteria you’d set, as distinguishing between the promising and the red herring seems to be a primary problem for industry at the moment, but some public funding/conducting of large scale clinical trials, and thence public/academic sharing in ownership of the resulting drug, might be a good thing?

    I find the money issue a little…troubling, at times. We spend so much on so many things, but we can’t find a couple of dozen billion dollars (out of a Fed budget in the trillions) to throw at curing/treating serious disease? The benefits of which are potentially ongoing, as many illnesses, once cured, don’t become uncured, as well as economic and social benefits of the ill being able to keep living and working effectively.

    Maybe fixing the rules for drug trials is an option also? Force disclosure of good quality method/results reporting? Avoid duplication of work, even encourage reproducing/reproducibility of results as in the other sciences? Are poorly conducted/too optimistically interpreted early Phase trials partly responsible for big Phase III failures?
    Maybe this would assist in the apparent inefficacy of very promising drugs in Phase III, and as determined later in contrast to Phase III results?

    Something’s got to change, right? Current procedures, and current pricing in the states, don’t seem viable long term.
    One might ask for forgiveness for feeling, as I do, that there isn’t enough altruism/public service in the heathcare sector in the states, that money is more the motivator than health of patients/outcomes.

    1. Vaudaux says:

      “Why not fund *some* drug trials through the NIH or similar? ” Don’t know about other therapeutic areas, but this already happens to some extent, at least for infectious disease.

      NIAID supports drug discovery programs through phase I. Several phase II and III antibiotic trials have been supported by BARDA (Biomedical Advanced Research and Development Authority, in Health & Human Services).

  8. Billy says:

    Cut the marketing and advertising budgets to zero. I’m frankly tired of watching drug ads on TV with actors pretending to be doctors and using at least 20s to tell us all the side effects. This will no doubt save some cash.

    1. David Antonini says:

      What happens in the states is illegal in some countries. Suggesting patients go to doctors and ask for meds is very close to unethical to some. If doctors are well informed as to what the best meds and treatments are, from academic (ie truthful/accurate) sources, they should/will prescribe those. That’s the ideal, right? Overadvertising from drug companies would seem counter to better patient outcomes.

    2. Hap says:

      Except advertising makes them money – if advertising brought in less money in added sales than it cost to put on, pharma wouldn’t do it, probably. The extra cash advertising generates comes from pharma companies’ reputations, not from their research funding.

      DTC is probably a bad idea for pharma, but getting rid of it probably won’t make drugs cheaper, but more expensive (in the short- to middle-term), As long as the short term is what matters to management and investors, they’ll keep letting the sheep overgraze until they run out of grass. In the long run, pharma getting its reputation back would probably make trials less onerous, but getting your reputation back is kind of hard to do once you’ve lost it.

      1. Billy says:

        I’ve always wondered how many extra dollars advertising brings in. As a consumer and a scientist, I find the ads almost reprehensible (despite wanting consumers to be well informed). My thought was that big pharma could not only save money on the ads, but also all the perks they give to their marketing/sales staff. I can’t tell you the number of times I’ve heard, “oh, you work for company X? I’ve always heard about how well they take care of their employees.” To which I reply, “yeah, well, I work in research.”

      2. Ben says:

        I’m not sure this is right. Company A spends money on advertising to convince people to buy their drug instead of company B’s drug. Company B spends money to preserve their sales at the expense of company B. If no advertising is permitted, then neither A nor B has to spend money on advertising, so costs are lower, and the relative sales of A and B are on merit rather than because of different budget on adverts. In principle..

        1. loupgarous says:

          Which is the best argument against DTC advertising – between that, other advertising-related expense and gratuities to prescribers, about half the roll-out cost of a new drug is marketing-related. Outlaw everything but package inserts, the Physicians’ Desk Reference (basically, a compendium of package insert information – all of which is safety and efficacy data and other information required to be supplied to prescribers and patients by FDA) and very basic medical journal advertising, and you’ve removed a larger upward driver of costs than Phase III studies.

          If the Trump administration and/or Congress want to do something big about the death spiral in medication costs, they could take a hard, punishing look at FDA’s programs which incentivize the drastic marking up of costs for things like colchicine which predated not just the FDA but the government it nests within by centuries – and make drug marketing a matter of “what works better with fewer side-effects for your patient – Drug A or Drug B?”

      3. peter says:

        It makes the individual company money, sure. But it balances out in the end, if you have a headache you will buy some painkillers, ads will influence what kind of painkillers you buy. What they don’t influence is how often & how many painkillers you will get.
        Advertisement distribute the income differently among pharma companies and remove large amounts of money from the “system pharma” in the process.

    3. chris says:

      I’m always a little surprised by this argument, because it puts forward the basic premise that an uninformed consumer is better than an informed consumer. I understand that the appearances are bad and money’s being spent, but as a consumer and sometimes patient, I don’t like the idea of being wholly dependent on my doctor to tell me what my options are.

  9. A joint effort is always beneficial to both parties. There should be a clause somewhere stating that the academic developer (staff and institutions) of the promising candidate (and possible formulations of it) gets an actual share of the profit made when and if made

  10. Janus says:

    The assertion of the existence of “the typically idealistic motivation that drives most academics to spend countless hours at modest compensation to solve important problems” is laughable. As someone who has worked both in academia (tenure track PhD granting institution) and in a a large pharma company, I can attest to the lack of validity of this smug, self-congratulatory bit of cognitive dissonance. The arrogance, greed, underhandedness and pervasive atmosphere of conflicts of interest that pervades academic research makes most pharma companies (the discovery and CM&C parts, not marketing) look like monasteries. Give me a break!

  11. Peter Kenny says:

    Academic drug discovery would appear to require taxpayers (and charities) to pick up a much greater proportion of the up-front costs in return for lower prescription charges later in the event that drugs are actually discovered. Ramping up funding will require a much greater accountability to funding agencies who will have to put additional bureaucracy in place to ensure that tax-payer money is responsibly spent. Intellectual property becomes a thorny issue when the science generating it is funded by taxpayers. The idea of partnerships between generic manufacturers and academia seems fanciful since the former won’t get usually get involved until the drug has been on the market for some years. The thinking behind such partnerships seems to be based on the view that cost of goods is big deal (perhaps getting the University of Sydney chemists to draft a platoon of grammar school kids may be the more economical option). I have linked a blog post from late 2011 on Pharma’s woes as the URL for this comment.

  12. tlp says:

    sure, let postdocs and grad students do the job, it will certainly cut the costs

    1. Anon says:

      Nailed it!

    2. Mark Thorson says:

      And do clinical trials in DPRK prison camps.

  13. Dr CNS says:

    How about the USA Today article of today entitled “Dozens of new cancer drugs do little to improve survival”?
    Quite damaging to pharma, if you ask me….

    Self-criticism, anyone?

    1. MTK says:

      How exactly was that article damaging to pharma?

      Seemed to me it actually did a reasonable job of explaining why that might be including patient advocacy, ethical reasons, and so forth.

      I really didn’t read anything in that was some sort of big indictment of pharma.

      I’m willing to listen though if you want to provide specifics.

      1. Dr CNS says:

        1. Let’s start with the title of the piece. Not exactly a vote of confidence on what we deliver.

        2. A patient’s statement that “the Food and Drug Administration is approving cancer drugs without proof that they cure patients or help them live longer”

        3. There is acknowledgment that “Pushed by patient advocates… the­ Food and Drug Administration has approved a flurry of oncology drugs in recent years. A few of these drugs have been clear home runs, allowing patients with limited life expectancies to live for years.” I guess this is how I want things to be. This is followed by:

        4. “Many more drugs, however, have offered patients only marginal benefits, with no evidence that they improve survival or quality of life.” No too impressive.

        5. “Overall cancer survival has barely changed over the past decade. The 72 cancer therapies approved from 2002 to 2014 gave patients only 2.1 more months of life than older drugs, according to a study in JAMA… And those are the successes.”

        6, “Two-thirds of cancer drugs approved in the past two years have no evidence showing that they extend survival at all,”

        7. “In a November study published in JAMA Internal Medicine, researcher Diana Zuckerman looked at 18 approved cancer drugs that didn’t help patients live longer. Only one had clear data showing that it improved patients’ lives, such as by relieving pain or fatigue.”

        8. “Our patients need drugs that provide the greatest possible benefit, particularly when you put that in the context of cost,” ….. “You begin to question what is the real value of a therapy when the benefit is small, the toxicity may be similar to a previous drug and the cost is much higher.”

        9. “Cancer drugs approved last year cost an average of $171,000 a year, according to the Center for Health Policy and Outcomes at New York’s Memorial Sloan Kettering Cancer Center. ” …. “We cannot have a system where drugs that may not even work are being sold for these amazingly crazy amounts of money,”

        10. “Recognizing the slow pace of progress, the American Society of Clinical Oncology has set goals for new cancer drugs of extending life or controlling tumors for at least 2.5 months. The bar was set relatively low because “it’s not very often that we come across a transformative treatment,”….. Yet … in a study published in September in JAMA Oncology, Mailankody found that only one in five cancer drugs approved from 2014 to 2016 met those standards.”

        11. “In a 2015 study, Prasad looked at 36 drugs approved without proven survival advantages. More than four years later, only five had evidence of improved survival.”

        12. “Patients “see the survival benefit, and of course these are scared, desperate people trying to get themselves any chance they can get,” said Dr. Ellyn Lee, who guides patients about cancer treatments as director of Seattle’s Swedish Palliative Care Services. “However, the survival benefit is not often realized, or it’s three months of misery due to side effects and bankruptcy at the end. Is that really fair?”

        And there is more… specifically about the value of “progression-free survival” in cancer drug approval.

        I am not naïve, and I understand that finding treatments for bad diseases is very difficult. We need to do better, and I hope we make the changes needed to do so. It seems a lot of what we are doing now is stopping us from reaching the future faster.

        1. MTK says:

          Most of your specific items point to the FDA, not the pharma industry.

          The problem, if there is one, lies in the FDA and the political atmosphere of the last few decades. The public and patient advocacy groups have demanded more drugs be approved faster. The FDA has complied with that. The outcome is totally predictable given that they are approving drugs with less rigorous data.

          On top of that, as the article correctly notes, the aggregate outcome may not be that significant since there is a wide spectrum of responses amongst patients for many of these drugs.

          It’s difficult to say this is an indictment of the pharma industry when they are introducing new therapies in accordance with the regulatory statute, ethical guidelines, and public demands of access to these new therapies.

          If this were a neglected area and they were just throwing complete trash over the wall that would be one thing. But that’s not what we’re saying here. Oncology is easily the biggest area of R&D investment and these new therapies while perhaps not better by OS are at least working as well as the best therapies available (faint praise, I admit). It’s a difficult area.

          I do think the cost of these new therapies given their sometimes limited benefit is legitimate gripe, but in terms of effectiveness, as measured by OS, I really don’t see this as a failure of the industry. No more than not having an effective treatment for Alzheimer’s. These are very hard problems and it’s not for lack of trying that they haven’t been solved.

  14. Seb says:

    Agree with Ret. This is a case where the original article is hopeless drivel, while the commentary is well thought out and compels important, reasoned discussion. Perhaps the drivel serves a purpose- without it we would not have read Lowe’s excellent commentary.

  15. Kelvin says:

    Q1. What is it worth to society to extend the life of each person by one year, on average?

    A. GDP per capita

    Q2. And how much is society able to pay to extend the life of each person by one year, on average?

    A. Total healthcare budget per capita, or only about 10-20% of GDP per capita. Any more is not economically sustainable.

    1. buddha says:

      Please don’t equate the value of a life to per capita GDP. Most of the extension of life by drugs is past a person’s working age, so by the logic of equating productivity to value, these people would have negative value. By that logic, society would benefit by not treating retired people.

      1. K. says:

        Note I said *on average*, plus it only makes sense if we increase the age of retirement. Otherwise the numbers exceed what we can afford as a society, without forever increasing debt until the economy collapses.

      2. loupgarous says:

        Which is precisely bioethicist Ezekiel Emmanuel’s reasoning, that we spend too much money on healthcare for the retired. (He once said he didn’t want to live past 75. I wonder how many copies of The Final Exit were gifted him in anticipation of his 75th birthday).

        Part of the problem is the stuff that’s relatively easy to make that gets priced out of the ballpark for retired patients (like the insulin I couldn’t afford to take on Medicare Part D because monthly dosages were about $700 – it’s brewed up in vats). Partly it is that patients and physicians alike lean too hard on those medications (like the insulin I was taking rather than sticking to a strict low-carb diet, which got my blood sugar down to reasonable levels without insulin). If the market for insulins contracted because more Americans stuck to low calorie, low carb diets, the price point might come down on them.

        I submit that it’s not cancer therapy that is eating the national healthcare budget but a combination of over-use of medication and services and over-pricing of medication and services in general, with the knowledge most patients are largely insulated from that pricing by insurance of various kinds. As Medicaid is expanded, assuming that part of ObamaCare survives Congressional scrutiny, the drug companies get an additional payday, for most Medicaid patients don’t deal with co-pays, so they have no incentive to weigh cost-effectiveness of treatment.

        What to do about it? Obama’s first appointee to oversee the Medicare and Medicaid Fund was madly in love with Britain’s National Health Service, but the British press is reporting that NHS’s wheels are coming off. The “death panels” the Left here has made so much fun of are pretty much in session in Britain, as local boards have to try to balance diminishing budgets for medication and therapy with relentlessly increasing demand – in a country that hammers down the price of medication to a fraction of what we pay in the US. The result is that while some clearly unnecessary care is deferred or denied, cancer patients are being sent home to die for fiscal reasons.

        It’s not a matter of if American healthcare heads down that road, but when, unless we fix the economics of health care in ways that aren’t confined to slicing the pie thinner or sending people home with no pie.

        I don’t hold out a lot of hope for either the Right or the Left’s proposed prescriptions – the Right wants health savings accounts (which are fine if you have money left over for savings every month and many don’t – and if your illness is treatable for what you have squirreled away). The Left wants to make healthcare funding a transfer of income from most people (who get to pay either higher premiums or a tax which essentially replaces the part of those premiums which are a transfer of income away from them, and are losing access to healthcare they and their families need as deductibles and co-pays mount) to those favored under the current scheme. That’s also an inequity that many resent, and one Congress will probably do something about, now that they don’t have to override a Presidential veto.

        Both political wings have been economical with the truth, and the American people are paying for it. An honest and open discussion of healthcare economics would have been nice, but that Gruber fellow admitted it was easier to depend on Americans being stupid enough to do as they were told.

        1. David says:

          I for one am more than happy to part with money in tax so that others (ie the population at large, including myself) receive healthcare. Of course, I’m used to paying a 2% tax for said care, which is dwarfed by the 10% I’m currently paying for insurance, nevermind actually accessing healthcare using it.

          The thing with more universal systems, be they single-payer, government run, or a combination thereof, is you get economies of scale, efforts to prevent the necessity of care in preventative programs (seriously, we can provide millions of vaccines to Africa at pennies on the dollar compared to what my insurance company pays for my kids’, but my low income students struggle to access the shots they need to attend school?), and you have the population-wide data coming in to make those preventative vs intervention vs cost decisions. Sure, a 3million dollar course of therapy to give a comatose or severely demented 90 year old 3 more moths of life may have to be a line where public funding is withdrawn, but I’m not sure how a pubic system making a cost-benefit determination differs or is a downside from an insurance company having limits or refusing to cover certain treatments.

          I comprehend that when we talk about research/drug funding, there are complex issues, and people often want something for little to nothing. But not getting new treatments due to cost is no worse than not getting them because they’ve not been created yet. The major issue I see is exactly what you referred – ‘basic’ decades old treatments costing fully 60% of what I earned when I worked a minimum wage job. That’s obviously not sustainable as a model.

  16. ScientistSailor says:

    “people need to not be greedy” Marx tried that already…

  17. Snarf says:

    Ha. And the CROs on which we rely to advance our academic compounds will also charge less because it is the right thing to do. And the compounds that are sent to the CROs will be synthesized by free labor using free reagents from Aldrich’s new program aiding academic drug discovery. (What, hasn’t anyone heard of that?). More like a call to do business with CRC, et al.

    1. David Cockburn says:

      Of course the CROs will be able to quote lower prices because they will pay their employees less than usual. Also the couriers will charge less than usual because the airlines will offer a special discount to discharge their social responsibility.

  18. Magrinho says:

    I didn’t get past this: “First, academic organizations will need to abide by their societal responsibility and…”

    Anyone who has ever negotiated even the smallest of contracts with a university must have palmed their forehead at that phrase.

    1. MTK says:

      No kidding, Magrinho.

      No one overvalues or overasks more than universities.

  19. Anon says:

    So now all we need is for someone to take all the risks but none of the upside, then we’ve got it nailed!

    Why do people bother writing such stupid articles, instead of being the ones to volunteer taking all the risks but none of the upside?

  20. Eric Nuxoll says:

    If Phase III trials make up the lion’s share of drug development cost and there are multiple Phase III trials against the same disease going on at similar times (within a few years), then perhaps there could be significant cost reduction by having a third party (NIH?) conduct the trials (coordinating with FDA and interested companies on design), so that they could be coordinated well enough to use the same control arms and avoid some redundancy? And then we could get at least some head-to-head comparative information at the same time? I can see why some companies might balk, but in an industry this regulated that’s the easiest obstacle to deal with. Would this be feasible from a technical standpoint?

    1. tnr says:

      This is a very good idea but very difficult to get companies to agree to. It would be great for both huge diseases like Alzheimer’s (run a very large trial but with several drugs – all companies split the cost) and also for rare disease like ALS where the trials would be much smaller but you wouldn’t have companies competing for patients.

  21. Sue Denim says:

    The inevitable “academicians don’t know nothin’ about birthin’ no drugs” crowd never fails to chime in whenever Derek posts one of these types of topics. It’s like saying Benghazi to a room full of Tea Party enthusiasts. Virtually every academic scientist would readily admit that they don’t have the resources to do all of the studies required to get a drug to and through the clinic, and they would sure have a helluva time raising enough funding to succeed. But it’s ridiculous to think that the knowledge of how to do this is exclusive to industrial scientists, especially since so many former industrial scientists have now transitioned (not always by their own choice) into academic positions. In other words, both academic and industrial scientists recognize that chemical probes are not drugs, so just because a handful of attention whores trumpet their findings as if they’ve found a cure, don’t paint the whole community with such broad brushstrokes.

    1. Hap says:

      I don’t think I’d say that academic people in general don’t know drugs, though some people have written not-very-good drug papers noted here before,

      It’s not reasonable, though, to have a plan that assumes that people in academia are immune to the incentives that underlie commercial drug development. Everyone wants to be secure, to make money to at least maintain their position, and in some cases more than that. Even if academic people could in general separate their work from those incentives, their universities will almost certainly not do so, and any of the other entities that would need to participate probably will not, either. It seems like it would be better for academia to find new things that might change the tools with which people discover drugs rather than to try and duplicate what others do, knowing that everyone is subject to the same competing desires in doing so.

      1. loupgarous says:

        The notion that academics would necessarily behave differently than Big Pharma in choosing which drugs to develop or how to develop them is naive. I’ve written a few proposals to perform funded research, some for academia, some for CROs. The CROs tended to be more professional and, while not altruistic, no more greedy than your average university.

        Corruption follows big money. We’ve seen it in defense contracting – unless someone who had strong professional ethics was there to make sure that what was promised was deliverable and what was delivered was what was promised, monumentally expensive disasters will happen. (Think about Lockheed – when they lost Kelly Johnson, that firm started to become synonymous with “cost overruns” and “failed development”. Google “F-22”, “Venture Star” and “F-35” to see what I’m talking about.)

        Nothing special about academia exists to assure more honest or competent handling of money, should (say) Congress begin funding drug development through universities. The hefty overhead of the average large institutional grant will simply assure that we’d see the defense contracting experience happen all over again.

    2. loupgarous says:

      Three letters for you.. C… R… O.

      One way to help academia develop drugs would be to partner them to generic manufacturers AND clinical research organizations (who do have the necessary experience in dealing with patients and in administering clinical studies).

      But I agree with Derek that politically mandating such changes won’t end well. We’ll wind up with a scheme that satisfies no one, hashed out in Congress with the help of the press (neither of whom really know what they’re hashing out) which leaves us nostalgic for the good old days when drug companies had the capital and the resources to explore all the drugs and drug targets they do now – and actually did it.

      And like nostalgia for the 1950s, this will totally ignore the issues besetting the current situation – a literally Byzantine economic model of drug development and pricing.

  22. Dominic Ryan says:

    There are sooo many things wrong with this picture but I think the lack of transparency in the whole system is the biggest. Very few seem to have a handle on where the money goes but I’ll also grant that there are many overlapping factors on the money. Take DTC advertising. Yes, it is expensive but clearly worth it or why do it? This is post-approval after all. It probably does two things though. It makes some people march into their doctor’s office and demand Mircaculomab. No doubt some doctors will say ‘ok, let’s try it’ to just move the next patient in. But, it also probably finds legitimate patients who will genuinely benefit from the therapy that would not have known about it before. Sure, physicians should all know about the latest research but life just isn’t like that.
    So, how do you fix that situation? How do you use DTC that only targets the patients that will benefit even some and dissuade the others who are fearful that their disease has hit a brick wall? Maybe you require all physicians to take an extra two weeks in cont. ed. beyond what they do now? Good luck with that, that has wide-spread costs as well. I don’t think DTC is helping public perception at all, especially how it is seen now, but I don’t think that where the money or transparency crisis is.
    Given a ‘reliable’ target, industry as a whole knows how to get a drug out. Efficacy failures are the very expensive ones and the more we go after a new gene the less we know about therapeutic outcomes and the more we hunt for the thinnest hint of success. That is expensive and I don’t see how that changes.
    If academia could somehow improve target validation in humans that would move the needle. I suppose that is some sort of clinical trial, oh wait, don’t they call that Phase-III? But, if they could move the odds a bit by ground-breaking pre-clinical biology perhaps success rates would rise a bit and the industry could do what it is good at, drugging those targets. Funding sources (NIH, etc…) would have to pull back from lead-op like funding and the whole system would have to tolerate longer timelines.
    The lack of transparency is not just about money though, it is also about the process and the risks and that is despite our self-awareness of these issues. But industry-self awareness is not the problem. Reaching out to others in a way that does not put them off is the problem. We have to rebuild trust in science before we can even get to trust in pharma.
    With greater transparency I would hope that articles such as the one on the table would never get started.

  23. M says:

    Who will fund this “academic drug development”? NIH budget is only $30b/year. How much of that do the authors want diverted away from research into drug development? If they diverted all $30b/year, that would allow development of maybe 10 drugs/year (at $3b/drug). If they diverted 10% of NIH budget ($3b), then they’d develop maybe 1 drug/year.

    Alternatively, they want to increase the NIH budget by tens to hundreds of billions of dollars per year for drug development? Lol. Good luck with that.

  24. Chris says:

    I attempted to work with academic groups to identify and “translate” good potential drugs into the clinic. But we could never find any potential candidates that had even minimal appropriate studies. The lead investigator often worked with cell cultures. He/She would find something of interest and give it to 3 mice and declare success! They would not spend their grant money at a CRO that could actually do a real animal study. Nor did most PIs want to “share” their potentially publishable work with other academics. The incentives in academia are just not there to develop drugs.

  25. Ru barf says:

    Everyone knows academic scientists are way smarter than all the lazy industry scientists who don’t even read the literature or do stern volmers. Academia has all the special sauce and can easily screen the drug library

  26. Anonymous says:

    Does anyone remember Boston University’s Silber-led foray into Seragen? Seragen was based on the work of BU’s John R. Murphy on fusion toxins. (On the most basic level, I think it’s a clever idea, fusing a diphtheria toxin warhead to a cell targeting (IL-2) heat seeking missile. ) Things didn’t work out as hoped and BU lost a big chunk of their endowment.

    Here’s an old story from the NYT:

    Should BU have invested in Seragen as a company? Should they have just pumped those millions directly into the campus-based academic lab research?

    There have been many start-ups closely linked to universities, even if not as closely linked as BU-Seragen. I think that most uni’s would rather avoid another Seragen-like mess and just push their home-grown IP into new start-ups and let VC and others take the risks.

    1. loupgarous says:

      You’d think elementary ethics would lead universities away from investment which would benefit university staff, wouldn’t you?

      Just delete any reference to drug development from that story – “University loses millions in endowment funds in startup by university staff” and it becomes clear that an endowment ought to be invested in assets based on the relative safety of the funds invested and the expected rate of return.

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