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"Me Too" Drugs

Getting Drug Research Really, Really Wrong

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 were to have 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 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.
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/J&J are still pressing on. And before that you had Elan working on active immunization, which is still going on, and you have Lilly’s other antibody, which is still going on, and Genentech’s (which is 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 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. I should mention that when Prof. Light’s earlier figure for drug expense came out that I had a brief correspondence with him, and I invited him to come to this site and try out his reasoning on people who develop drugs for a living. Communication seemed to dry up after that, I have to report. But that offer is still open. Reading his publications makes me think that he (and his co-authors) have never actually spoken with anyone who does this work or has any actual experience with it. Come on down, I say! We’re real people, just like you. OK, we’re more evil, fine. But otherwise. . .

74 comments on “Getting Drug Research Really, Really Wrong”

  1. PorkPieHat says:

    Whew, what a doozy. This got published in the British Medical Journal. Who’s reviewing this sort of publication, anyway? How does this pass without the critical review that you just gave? Is Light not aware of the shrinking of the industry? Im sure my former industry colleagues now selling real estate would love to have a word with him. This is beyond ridiculous.

  2. InfMP says:


  3. Ashley says:

    What a wonderful article – thank you.
    Perhaps these issues wouldn’t be so dire if the citizens of this country would stop thoughtlessly and (to their way of thinking) effortlessy popping pills and start dedicating themselves to disease prevention and healthy living
    That would only apply to some conditions, not Alzheimer’s and cancer of course

  4. Ashley says:

    What a wonderful article – thank you.
    Perhaps these issues wouldn’t be so dire if the citizens of this country would stop thoughtlessly and (to their way of thinking) effortlessy popping pills and start dedicating themselves to disease prevention and healthy living
    That would only apply to some conditions, not Alzheimer’s and cancer of course

  5. Twelve says:

    The smug idiots who published that garbage will soon be forgotten, but your reply will live on. This apologia is luminous with clarity – it should be a mandatory reference for everyone who wants to understand the business/science tensions intrinsic to modern, high-stakes drug discovery.

  6. Experienced Drug Developer says:

    Well told, Derek. Don’t apologize for your anger and emotion – those of us who have done this for any period of time know you are right.

  7. Anonymous says:

    Does anyone have an insight into Donald Lights’ angle here? Most folks do the “there is no climate change” baiting when there is an agenda to reap financial benefits. Does he make that much from books and interviews, etc. to justify killing his professional reputation like this? Are there interest groups that would profit greatly to advance such provocative nonsense? What are they?

  8. Hap says:

    1) Why should the authors taint a beautiful theory with facts and logic?
    2) People fight harder for ideas, sometimes, than money. Both the (lowball, silly) drug cost estimate and this article probably have the agenda of trying to get the money to make drug costs (and other health care costs) from drug companies, and the argument is a way for them to rationalize that means to themselves. The mechanisms would also promote a more centralized system, with presumably the government having more power and businesses having less. For more selfish reasons, their arguments might get them political connections and power with certain people and groups, and perhaps money.
    There’s also the possibility that it’s just the academic (in both senses) study of drug discovery. “Why are battles in academia so vicious? Because the stakes are so low.”

  9. smurf says:

    Thanks – your angry posts are often the best!

  10. noko marie says:

    Rock on, man, rock on.

  11. Prof. Light says:

    Damn it.

  12. qetzal says:

    It gets him attention.

  13. Pig Farmer says:

    “Without patents new drugs are immediately open to generic competition, lowering prices, while at the same time innovators are rewarded quickly to innovate again”
    Er, no…. without patents no-one would bother to develop new drugs in the first place, since they would be unlikely ever to recoup their investment.
    Looks like the lights are out chez Donald Light.

  14. Hap says:

    12: Why doesn’t he just get a reality show then and be done with it? The Jersey Shore’s not far away – the culture clash between academia and the Shore ought to be hilarious enough to get MTV interested, right?

  15. Larry says:

    Here’s a kind word for prizes. They make sense when the big costs are upgront and marginal cost (e.g., cost per pill) are low, as they are for most drugs and if the prize is large enough to call out more research $, as would likely be the case for e.g., new antibiotics.
    The prize would be used to purchase (and place in the public domain) the related patents. The size of the prize (and criteria for winning) would be announced in advance and the developer would have the option to not sell. Prizewinners could be manufactured and sold globally at everyday low prices.
    Drugs that didn’t win the prize would be marketed as the developer chooses, i.e., as they are today.
    The X-Prize worked brilliantly both for space flight and for self-driving cars. Don’t throw this beautiful baby out with the leftie bathwater!

  16. petros says:

    I can see why this got you going Derek even though I can’t read the full article
    I can’t see how a sociologist knows much about the problems of drug discovery (see

  17. Patrick says:

    @5 “The smug idiots who published that garbage will soon be forgotten, but your reply will live on.”
    I don’t think it is a good idea to be so dismissive of them, not matter how wrong they are. They know the public is eager to hear the things they are telling them. Their views will be widely disseminated and parroted.
    For example, the dubious claims made only a few days ago have already appeared in Wikipedia, one of the world’s most widely read websites ( It will stay there influencing, directly or indirectly, millions of people unless more knowledgeable people like Derek’s readers step in to do something about it.

  18. Prometheus says:

    @17 Wise words – whatever we think about the content, this will be in tune with the beliefs of many, possibly the majority of Doctors. I personally find it disturbing that The British Medical Journal sees fit to publish this but it says all we need to know about the reputation of the Industry.
    Sadly, that reputation is for the main part self-inflicted – consider how this article might appear in the context of the recent 3 billion dollar GSK settlement.

  19. Phil says:

    Have you thought about responding to the article on the BMJ website?

  20. anon2 says:

    Preaching to the converted.

  21. Chemjobber says:

    @Petros (#16):
    Wow, what a find.
    “As one of the founding fellows of the Center for Bioethics, Professor Light has continued exploring issues of distributive justice. He has tried to broaden the call for universal access to health care to involve conservatives and people of faith. Why, for example, do most conservatives in every other industrialized country support universal access while American conservatives do not? What Biblical texts speak to this issue?”

  22. John says:

    Always interesting to read articles written by people with a vested interest in a subject. There is a bit of missing the wood for the trees here. You can take down any argument point by point, using selected counter-narratives and claim victory.
    The real question is:
    Are the best health outcomes generated by (a) giving large amounts of money to centralized organizations such as pharma companies or univeristies to do research into drugs or by (b) giving the equivalent money to community health care to persue non-drug interventions?
    This is the true test of the relevance of pharma (uni and corporate) as it exists today, and I would be interested to hear a less angry and more considered response to this.

  23. J. Galt says:

    Lexchin and Light are neo-marxists. The wonderfully successful company once called Solyndra comes to mind. This top-down command economy approach is no more sustainable than the current industry model. They are simply replacing the current private sector MBA’s with government officials.

  24. Andy says:

    Look at a fabulously successful oncology drug: rituximab. In one indication registration trial Genentech enrolled 162 patients in the treatment arm and 160 patients in the standard-of-care arm for a total of 322 patients. We (not Genentech) ballpark that the costs to run a registration trial comes in around $150k per patient. That puts the cost of just getting the one registration study done at $48.3M, so in the ballpark of the $43M Lexchin/Light estimate. BUT, that assumes that all the other development costs (preclinical through phase 2) are zero, and it assumes that every drug is the total efficacy blockbuster that rituxan is, and it assumes that every drug that goes to a registration trial succeeds, clearly all fantasies of the highest order.

  25. dearieme says:

    “Most folks do the “there is no climate change” baiting when there is an agenda to reap financial benefits”: you got any evidence?

  26. matt says:

    I agree with most everything you said, and agree the BMJ article writers seem to have missed the target.
    Playing devil’s advocate toward a slightly different target, however, there is less sympathy for high development costs the more one realizes how executives have placed exorbitant bets on horses lame in two legs. There was no excuse for gambling on Phase III for bapineuzumab, when Phase II missed its targets, and there were myriad ways to reduce the risk and firm up understanding of what was happening. None of that research would have cost as much as a Phase III (did Forbes say J&J was taking a $300-400 million writedown for that?!), and the Phase III contributed to almost none of the needed understanding. Similar bad gambling scorn could be directed at GSK and Sirtris, and has been, on these pages. And one wonders, do the billion dollar fines like GSK paid get charged as an advertising cost? If advertising still shows a profit, perhaps the fine needed to be higher.
    None of this diminishes the hard work of the employees of these companies, who suffer and will pay the price for these bad bets. Tighten your belts, kids, looks like daddy spent all the income at the horse track again. (Or was it loose women offering the benefits of red wine?)
    Not to ignore the chancy nature of even the best Phase III: there are certainly obscure side effects and interactions that can bite even when due diligence is done. That’s all the more reason to do risk reduction, in the form of making sure your Phase II results are positive, of developing diagnostics to determine what effect your substance has (on both sides of the BBB for CNS targets, maybe for multiple forms of the substance if they exist), or in the absence of the latter putting further trials on hold until more post-mortem analyses come in. Flying blind worked in the past; it appears it is not paying off now.
    It seems clear that executive compensation in the pharma industry needs adjustment. Just as in banking, there need to be clawback provisions on executive pay and bonuses, certainly (at a minimum) in the case of large fines like the recent GSK case. Put the whistleblower report chain directly in their inbox, and yank back pay and bonuses for up to ten years after they’ve left if legal shenanigans get charged to their watch.
    That way, when Andrew Witty is saying “Whilst these originate in a different era for the company, they cannot and will not be ignored,” someone can ask whether he has clawed back some of the executive pay that rewarded the misbehavior and if not, why not. At the very minimum, investors should demand this. Certainly GSK wouldn’t cover the cost of the fine, but in truth the fine wouldn’t need to be nearly as large if the executives responsible were actually getting punished. In Cold War terms, the more accurate the placement, the smaller the warhead needs to be. Less collateral damage is a huge bonus.

  27. MoMo says:

    Do you think Light is eligible now for an IgNoble award? Wait! Those are for real articles!

  28. Barry Bunin says:

    This has got to be the funniest, passionate rant on In The Pipeline to date. Obviously struck a nerve. I was laughing and thinking. Of course public markets are efficient. With the fall of the USSR, we all thought capitalism certainly trumped communism. Now China is showing some coordination can be efficient and effective.
    It is interesting to think about what would be most efficient in terms of absolute separated competition and absolute open coordination in the drug discovery space. Perhaps there are areas where groups can compete and collaborate at the same time. Targets and ideas are a dime a dozen, how much is insight vs timing vs execution to get to market with a winner. What is the optimal balance between which areas can be pre-competitive while others remain competitive?
    Neglected diseases would be one area for experimentation with models.

  29. Adam Jacobs says:

    Wow, I am in awe. I don’t think I’ve ever read such a thorough and well argued take-down of any article published in the BMJ (or maybe anywhere!) before.
    There is one point, however, I think you haven’t mentioned, which is highly pertinent here. I am very concerned about the effects of over-regulation on pharmaceutical development costs. Clinical trials are unbelievably heavily regulated: we can barely sneeze without having to follow an SOP for it and filling in a form to say which direction we sneezed in and signing it in triplicate.
    While I appreciate the motivations behind regulation of the pharmaceutical industry are entirely well-meaning and designed to promote patient safety, I cannot believe that the current status of regulation is anywhere near cost effective. In fact I recently went to a talk given by a regulator about a particular new regulation, and I asked him in the Q&A session whether any cost-benefit analysis of the regulation had been done. He looked surprised by the question and said that it hadn’t.
    It is certainly a problem that the costs of clinical development have been rising inexorably, and I suspect over-regulation is a huge part of that. We really need a more imaginative way of ensuring patient safety without the multi-billion pound price tag that the current system has. I’m not necessarily suggesting we do away with regulation altogether (although that could actually be worth considering, if coupled with something like unlimited personal liability for pharma company executives if patients are harmed in a reasonably-preventable manner) but I really do think the current system is way too complex and not fit for purpose.

  30. Billy says:

    I don’t want to comment on the content of Light and Lexchin’s article, or your considered reply Derek. Just one point which as a research scientist and publisher in peer reviewed journals should tell you this house of cards never ought to have been built – the references.
    Several of the key references to the authors arguaments come from their own literature – I said this in the past so it must be true! The one that really grabs me though and means the paper it is printed on will soon be making it’s way to the trash can…
    “The 1.3% of revenues devoted to discovering new molecules (Ref 23) compares with the 25% that an independent analysis estimates is spent on promotion,(Ref 35)…”
    This “independant analysis – reference 35” is written by (of course) Joel Lexchin – one of the authors claiming it to be independant!
    I rest my case, and the paper plane is well on its way.

  31. MK says:

    @23: what do you mean by non-drug interventions? Reiki, voodoo or urinotherapy?

  32. MK says:

    @24: This sounds marxist indeed. It may sound odd and inappropriate on this forum, but (as I come from a post-communist country, so I know what I’m talking about) I think that such anti-capitalist (i.e. communist) views should not be tolerated and their proponents should be ostracised just like neonazis are.

  33. JOhn says:

    MK, there are non-drug interventions and it doesn’t take much imagination to think of them. Lifestyle factors play a major role in health. Pharma thrives on the mentality that there is a drug that can cure us from adverse lifestyles which are now classified as “disorders”. Lipitor anyone?

  34. Anonymous says:

    @30 “I cannot believe that the current status of regulation is anywhere near cost effective. In fact I recently went to a talk given by a regulator about a particular new regulation, and I asked him in the Q&A session whether any cost-benefit analysis of the regulation had been done. He looked surprised by the question and said that it hadn’t.”
    Actually, cost-benefit analysis is a routine and generally required ('s%20Executive%20Order%2013563_0.pdf) part of the regulation development process. When FDA publishes a new regulation in the Federal Register, you can find the cost-benefit analysis in the preamable to the regulation.

  35. lJStewartTweet says:

    Thank you Derek!

  36. Adam Jacobs says:

    This was a European regulation, so maybe we do things differently on different sides of the pond.
    It’s interesting to see that the FDA does them. I would be amazed if they are done in a sensible way and they still find the regulations are cost effective.

  37. petros says:

    Rob (#37) thanks for that info
    Only 7 of the 41 references by at least one of the authors!
    They suggest new drugs should only be approved on the basis of hard clinical outcomes or superiority to a comparator rather than non-inferiority to a comparator or superiority over placebo.
    That approach would result in very few new drugs being approved at all!

  38. Stewie G. says:

    Derek, I’m sure you would feel differently if you heard these chaps read their paper aloud. Once you hear their accent and diction you’ll understand that they are hopelessly smarter than the rest of us. And you, from Arkansas, Puhleease.

  39. John Wayne says:

    This sort of thing really gets me annoyed.
    Are there waste and dumb decisions in pharma? You bet. How about waste and dumb decisions in government? Sure, tons. Which is better? Wiser? Which will lead to better outcomes?
    I don’t know, but the waste in companies both happens faster and (surprisingly) has more accountability. So, from my perspective, pharma is the lesser of two evils. It is reasonable to believe that the opposite is true, but it is not reasonable to infer that you are completely right and the others are completely wrong.
    Did anybody call the other side a Nazi yet? It’s not a debate until somebody uses the N-word (2000’s version).

  40. Anonymous says:

    @John Wayne
    I’ve been wondering for some time if a private company is the best way to do early research. It seems to me that the focus on quarterly profits would be counterproductive to science. I fear that this might get worse as the ‘easier’ targets have been hit. The more difficult targets may prove to take to long to develop for. How many quarters can a private company justify continuing research into a particular area without actually getting a drug out. I’ve often wondered if development times have dramatically increased and if so what impact this will have on pharmas profitability and productivity going forward. Will investors be willing to give companies enough time to develop drugs successfully? Particularly given the trend towards drugs with smaller markets. If the age of personalized medicine ever does arrive how will continuing drug development remain profitable as markets fragment?

  41. Anonymous says:

    @John Wayne
    I’ve been wondering for some time if a private company is the best way to do early research. It seems to me that the focus on quarterly profits would be counterproductive to science. I fear that this might get worse as the ‘easier’ targets have been hit. The more difficult targets may prove to take to long to develop for. How many quarters can a private company justify continuing research into a particular area without actually getting a drug out. I’ve often wondered if development times have dramatically increased and if so what impact this will have on pharmas profitability and productivity going forward. Will investors be willing to give companies enough time to develop drugs successfully? Particularly given the trend towards drugs with smaller markets. If the age of personalized medicine ever does arrive how will continuing drug development remain profitable as markets fragment?

  42. Bunsen Honeydew says:

    Derek, I love it when you get emotional. It’s entertaining and still spot on!
    We have had serious discussions on here about the struggles of peer review and I think this is an example of it failing in an phenomenal way.

  43. John Wayne says:

    @42 Anonymous
    There are some big negatives on both sides of the equation in pharma and academia.
    Pharma tends to focus on ‘low hanging fruit’ biochemical targets with large potential returns. They get confused when (1) the target doesn’t derive hits from HTS, (2) it doesn’t work in vivo (or in humans), and (3) the space is crowded with every company you have heard of (and several that you haven’t) because everybody reads the same papers for their target ‘ideas.’ Next, the quarter (or year) comes to an end and you need to somehow tell a divisional vice president that the team succeeded. This leads to zombie programs that should die, inept ‘me too’ targeting to fill up the basic research pipeline, and ill advised progression if compounds with dubious profiles to the clinic (Lily gets the King Idiot prize for this one for their a beta compound that doesn’t get into the brain – good control compound; high risk drug for AD).
    On the academic side most PI’s try to push on diseases and indications neglected by pharma but not neglected by various funding agencies. They pretend that big pharma is doing it wrong, and they will cause a paradigm shift in medicinal chemistry. This is a great goal.
    Unfortunately, medicinal chemistry is not a list of positive things to do to make drugs, but rather a list of common pitfalls that academics are in the process of wasting years rediscovering.
    (1) HTS: go ahead and check contemporary literature for papers about the pitfalls of HTS; you will be amused. This stuff was noted in the 90’s, but you can always rewrite that paper about avoiding thioureas if you make up a cool new acronym. (Sidebar: micromolar inhibitors of biochemical assays with poor Hill slopes aren’t really hits, they are assay artifacts: stop publishing this crap.)
    (2) ADME: Some PI’s are sophisticated enough to get microsomal data on some compounds; these folks are ahead of the pack. Stay tuned for ‘new’ papers on how microsomal stability is not really that great a predictor of whole animal PK.
    (3) While the industrial folks tend to kill projects early (or after the year end reviews; whichever causes fewer layoffs), academics never ever kill anything. There are scores of protein-protein interaction projects eating grad students and postdocs as we speak.
    My experience doing drug discovery in pharma and academia have revealed some potential issues. Right now I am trying biotech, and I’ll keep my ear to the ground for the best place to do basic research.

  44. drug_hunter says:

    John @23 – John suggests that somehow Derek is playing a game by merely revealing “point by point” the utter vacuousness of the Lexchin article, and that Derek is thereby missing the forest for the trees. And that, somehow, this is all because Derek has a particular axe to grind. What utter nonsense. There is no forest left standing – it is an intellectual wasteland. It would appear that for some reason John is attempting to shift our attention away from the fact that the Lexchin article is COMPLETELY WRONG and is HIGHLY DAMAGING for the many reasons raised by Derek and some of the other posters.
    John then goes on to ask a good question about what are the most cost-effective ways to achieve the best health outcomes, but of course that is a fundamentally DIFFERENT topic than whether there is a scrap of validity in Lexchin’s argument (hint: there isn’t).
    Always sad to see polemics and sloppy logic in the comments on this blog – brings down the curve. But I guess any group needs a bottom decile.

  45. Nick K says:
    As predicted by an earlier poster, Light and Lexchin’s idiotic article has already been picked up by the mainstream media.

  46. Ragnar says:

    Derek, this is your best post ever. If you haven’t read Atlas Shrugged yet, now you’re ready for it.

  47. MIMD says:

    Enough. I should mention that when Prof. Light’s earlier figure for drug expense came out that I had a brief correspondence with him, and I invited him to come to this site and try out his reasoning on people who develop drugs for a living.
    Brilliant. The acid test of true conviction.

  48. MIMD says:

    This site is a great relatively concise resource on logical fallacy:
    The Mother of all such sites is at

  49. Castalia says:

    The problem with the public perception of our Industry can be encapsulated as:
    Q. Who benefits from Drug Discovery continuing to be “massively expensive, lengthy and seldom successful”?
    A. Us.

  50. matt says:

    @50 Castalia:
    How so? I don’t see the benefits for anybody. And the public doesn’t think of the drug discovery process as expensive, they think it is trivial and cheap and quick; therefore they think drug prices are pure profit. Hence this blog entry in response to an ignorant article published in a prominent place stating exactly that premise.

  51. scott pollard says:

    We get so thick into things that it’s very difficult to maintain a perspective. Check out Ivan Illich and his talk about the “medical industrial complex” in “Medical Nemesis”. Check out Sarah Knox and her insights in “Science, God and the Nature of Reality: Bias in Biomedical Research”. It’s all there. The BMJ article and this response are both directed at the wrong target or barking up the wrong tree.

  52. scott pollard says:

    We get so thick into things that it’s very difficult to maintain a perspective. Check out Ivan Illich and his talk about the “medical industrial complex” in “Medical Nemesis”. Check out Sarah Knox and her insights in “Science, God and the Nature of Reality: Bias in Biomedical Research”. It’s all there. The BMJ article and this response are both directed at the wrong target or barking up the wrong tree.

  53. metaphysician says:

    Re: 48-
    Good lord, hit the deck everyone. The Objectivists are out to save our souls. . .

  54. Castalia says:

    @51 matt:
    It certainly feels like all sides in the debate could benefit from transparent, independently verified data. As only the Industry knows the individual cost of discovering and developing each of its (successfully approved) drugs, then we must wait for a principled CEO to break ranks and release those numbers.
    Clearly, those figures must only be valid in the context of the cost of all the simultaneously unsuccessful programmes but does, say $43 million dollars seem unreasonable for finding and taking a small molecule to approval?
    Until that day, all we’ve got is the likes of JP Garnier (The Guardian, 30 July 2005):
    “It is easier to put a rocket on the moon than to discover a new drug, and it also costs less money.”

  55. J Severs says:

    That is what I call heavy shelling. Well done.

  56. Johannes says:

    “”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.”
    “protections from free market, generic competition”
    “Generic competition”
    Does he even know it’s not the production cost you pay for in a pill? lol

  57. Johannes says:

    “”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.”
    “protections from free market, generic competition”
    “Generic competition”
    Does he even know it’s not the production cost you pay for in a pill? lol. He just lost all credibility for me in that line

  58. Hail Stalin says:

    lmao, look at this fascist pig who wants to bleed the common man to pay his own salary. Seriously, you have a poisoned brain, capitalist running dog.

  59. metaphysician says:

    And now we’ve got an unrepentant communist ( or a troll pretending to be one ). Any chance the objectivists and communists could go shoot each other?
    And no, I don’t believe 43 million to bring a drug to market. Not even a little bit. Stage III alone can cost that much.

  60. It’s hard to respond to so many sarcastic and baiting trashings by Dr. Lowe and some of his fan club, but let me try. I wonder if Dr. Lowe allows his followers to read what I write here without cutting and editing.
    First, let me clarify some of the mis-representations about the new BMJ article that claims the innovation crisis is a myth. While the pharmaceutical industry and its global network of journalists have been writing that the industry has been in real trouble because innovation has been dropping, all those articles and figures are based on the decline of new molecules approved since a sharp spike. FDA figures make it clear that the so-called crisis has been simply a return to the long-term average. In fact, in recent years, companies have been getting above-average approvals for new molecules. Is there any reasonably argument with these FDA figures? I see none from Dr. Lowe or in the 15 pages of comments.
    Second, the reported costs of R&D have been rising sharply, and we do not go into these; but here are a couple of points. We note that the big picture – total additional investments in R&D (which are self-reported from closely held figures) over the past 15 years were matched by six times greater increase in revenues. We can all guess various reasons why, but surely a 6-fold return is not a crisis or “unsustainable.” In fact, it’s evidence that companies know what they are doing.
    Another point from international observers is that the costs of clinical trials in the U.S. are much higher than in equally affluent countries and much higher than they need to be, because everyone seems to make money the higher they are in the U.S. market. I have not looked into this but I think it would be interesting to see in what ways costly clinical trials are a boon for several of the stakeholders.
    Third, regarding that infamously low cost of R&D that Dr. Lowe and readers like to slam, consider this: The low estimate is based on the same costs of R&D reported by companies (which are self-reported from closely held figures) to their leading policy research center as were used to estimate the average cost is $1.3 bn (and soon to be raised again). Doesn’t that make you curious enough to want to find out how we show what inflators were used to ramp the reported costs up, which use to do the same in reverse? Would it be unfair to ask you to actually read how we took this inflationary estimate apart? Or is it easier just to say our estimate is “idiotic” and “absurd”? How about reading the whole argument at and then discuss its merits?
    Our estimate is for net, median corporate cost of D(evelopment) for that same of drugs from the 1990s that the health economists supported by the industry used to ramp up the high estimate. Net, because taxpayer subsidies which the industry has fought hard to expand pay for about 44% of gross R&D costs. Median, because a few costly cases which are always featured raise the average artificially. Corporate, because a lot of R(eseach) and some D is paid for by others – governments, foundations, institutes. We don’t include an estimate for R(eseach) because no one knows what it is and it varies so much from a chance discovery that costs almost nothing to years and decades of research, failures, dead ends, new angles, before finally an effective drug is discovered.
    So it’s an unknown and highly variable R plus more knowable estimate of net, median, corporate costs. Even then, companies never so show their books, and they never compare their costs of R&D to revenues and profits. They just keep telling us their unverifiable costs of R&D are astronomical.
    We make clear that neither we nor anyone else knows either the average gross cost or the net, median costs of R&D because major companies have made sure we cannot. Further, the “average cost of R&D” estimate began in 1976 as a lobbying strategy to come up with an artificial number that could be used to wow Congressmen. It’s worked wonderfully, mythic as it may be.
    Current layoffs need to be considered (as do most things) from a 10-year perspective. A lot industry observers have commented on companies being “bloated” and adding too many hires. Besides trimming back to earlier numbers, the big companies increasingly realize (it has taken them years) that it’s smarter to let thousands of biotechs and research teams try to find good new drugs, rather than doing it in-house. To regard those layoffs as an abandonment of research misconstrues the corporate strategies.
    Fourth, we never use “me-too.” We speak of minor variations, and we say it’s clinically valuable to have 3-4 in a given therapeutic class, but marginal gains fall quite low after that.
    Fifth, our main point about innovation is that current criteria for approval and incentives strongly reward companies doing exactly what they are doing, developing scores of minor variations to fill their sales lines and market for good profits. We don’t see any conspiracy here, only rational economic behavior by smart businessmen.
    But while all new drug products are better than placebo or not too worse than a comparator, often against surrogate end points, most of those prove to be little better than last year’s “better” drugs, or the years before… You can read detailed assessments by independent teams at several sites. Of course companies are delighted when new drugs are really better against clinical outcomes; but meantime we cite evidence that 80 percent of additional pharmaceutical costs go to buying newly patented minor variations. The rewards to do anything to get another cancer drug approved are so great that independent reviewers find few of them help patients much, and the area is corrupted by conflict-of-interest marketing.
    So we conclude there is a “hidden business model” behind the much touted business model, to spend billions on R&D to discover breakthrough drugs that greatly improve health and works fine until the “patent cliff” sends the company crashing to the canyon floor. The heroic tale is true to some extent and sometimes; but the hidden business model is to develop minor variations and make solid profits from them. That sounds like rational economic behavior to me.
    The trouble is, all these drugs are under-tested for risks of harm, and all drugs are toxic to one degree or another. My book, The Risks of Prescription Drugs, assembles evidence that there is an epidemic of harmful side effects, largely from hundreds of drugs with few or no advantages to offset their risks of harm.
    Is that what we want? My neighbors want clinically better drugs. They think the FDA approves clinically better drugs and don’t realize that’s far from the case. Most folks think “innovation” means clinically superior, but it doesn’t. Most new molecules do not prove to be clinically superior. The term “innovation” is used vaguely to signal better drugs for patients; but while many new drugs are technically innovative, they do not help patients much. The false rhetoric of “innovative” and “innovation” needs to be replaced by what we want and mean: “clinically superior drugs.”
    If we want clinically better drugs, why don’t we ask for them and pay according to added value – no more if no better and a lot more if substantially better? Instead, standards for testing effectiveness and risk of harms is being lowered, and – guess what – that will reward still more minor variations by rational economic executives, not more truly superior “innovative” drugs.
    I hope you find some of these points worthwhile and interesting. I’m trying to reply to 20 single-space pages of largely inaccurate criticism, often with no reasoned explanation for a given slur or dismissal. I hope we can do better than that. I thought the comments by Matt #27 and John Wayne #45 were particularly interesting.
    Donald W. Light

  61. Anon says:

    Re: I wonder if Dr. Lowe allows his followers to read what I write here without cutting and editing.
    Yes, he does; perhaps it says something about your personality, sir, that you would think not.

  62. DrSnowboard says:

    My feeling is that post from Prof Light is actually quite useful in explaining the paper’s view, even if you disagree with the ‘politics’. Personally, I find it funny that there’s this rallying to the capitalist high ground when previously we’ve been lamenting the short termism of the capital markets, the poor decision making of pharma (based on ROI and the cost of capital) as they/we attempt to keep the marble steps shiny despite the one blockbuster on which they expanded vigorously now dying. Who are the funding bodies focussed wholly on unmet medical need? Gates, MMV, Wellcome Trust and the charity sectors. They have stepped in for diseases that Pharma stepped around or discarded. Why should the way they organise and fund not work for diseases that Pharma is now stepping away from? We’ve all seen poor decision making based on ‘corporate objectives’. Maybe we do need solutions that put patient safety and patient need at the top of the list and non-negotiable.

  63. Nick K says:

    Perhaps Dr Light would like to respond to a question I posed on a previous thread on this topic: if the cost of one Phase III clinical trial can be over $50M, how is it possible to discover and develop a new chemical entity to the clinic for $43M?

  64. Rob says:

    Nick K (#65)
    I seem to recall the conclusion that was arrived at on this board and in some other places, last year was:
    You must be very lucky!
    Your first choice candidate must get past every hurdle successfully first time.
    You are lucky!
    Your disease target population is small and you are only required to have a few people in your trial groups.
    The leprechauns are smiling on you!
    And you are lucky!

  65. Olivier Boss says:

    I fully agree with you, Derek, very good response here.
    The authors of the Brit. Med. J. paper sure seem to have no idea of the (biological) realities of drug development. Things always seem easier from the outside, and most people can only really know a topic when they have done it themselves.
    I do think that the authors are trying to provide solutions, improvements to the therapeutics development, and there may be some concepts/ideas to pursue, or at least include in discussions (with reality as a framework).
    Olivier Boss (founder, Energesis Pharmaceuticals, Boston, MA)

  66. c1ue says:

    Your arguments that the numbers used by Munoz et al are low are very reasonable.
    However, what is conspicuously missing is what a reasonable number might be from your expertise.
    Can you provide this? Certainly your own direct experience is no guarantee to represent the overall industry, but on the other hand would provide a very useful data point.
    In particular: how would your own estimates of drug discovery costs change the $34B vs. $200B research/profit equation?

  67. name withheld says:

    Derek, there’s truth in your post, and there’s truth in the British Medical Journal post. Please keep in mind there are three sides to every story.
    Have you interviewed the authors?
    I contend that, through public education, America is realizing more and more that “new” drugs are simply “rip-off clones” of existing drugs.
    People are publishing more and more on this, and I’m finally glad to see it in medical journals. I hope to see it soon on 60 Minutes and Oprah.
    Although we know organic chemists don’t sit on their butts doing nothing, Pharma permits them NO time to be innovative. They direct chemists to “steal” the IP of competitors so the company can have a piece of the pie.
    I hope, in a follow-up article, you might write about what the industry could be like if organic / medicinal chemists were permitted time to think and be innovative. This would be a very good article to read.

  68. matt says:

    @51 Castalia: yes, $43 million is ridiculously small for taking a small molecule to approval now. But here’s how I think the number is generated: it’s $86 million before chopping in half based on estimated total tax savings. It ignores all preclinical work–that becomes “research” which is then conflated with “basic research” which of course is all done in universities or funded by disease foundations and donated freely to drug companies, or is too troublesome to calculate. It’s based on a mishmash of numbers, some dating back to the early and mid-90s. Trial costs are compared to public records on TB trials, orphan drug trials, and NIH-sponsored trials from 1993. Maybe it is a reasonable number for half of a mid-90s series of clinical trials for a slam-dunk drug, especially adjusted to the prices of clinical trials in countries with a national medical system?
    Look at reply #25 (Andy) above. His estimate for a 322 person registration study was $48 million. That is ONE study, for ONE drug, which as he said was a slam-dunk success: that’s the cheapest. Perhaps his estimate of per-person enrollment costs was US-specific and high. I’d be interested to know what experience he applied to arrive at that figure, but…the bapineuzumab series of 4 Phase IIIs which failed recently enrolled more than 4100 people worldwide and reportedly had a cost near $400 million (in the same ballpark as his number). Is that a typical Phase III? No (nor is it a small molecule), but pick a few more data points in the CNS field, or diabetes/obesity, and you will find them all quite expensive. Oncology trials may be cheaper, but for candidates that only serve a small population. (And there was a bevacizumab study that enrolled 2600 with breast cancer which failed approval for that condition.) Running multiple Phase IIIs is not unknown. And every successful drug stands atop a pyramid of the skeletons of unsuccessful candidates, which must be paid for in some way. You may choose to not include those others in your cost figure, that’s fine, but then your conclusions regarding overall profitability or what it takes to produce a successful new medicine will be invalid.
    @Prof Light:
    The comments on this thread aren’t the main criticisms to which you need respond, so you needn’t complain about them. Instead, you should read the blog post itself, and in particular you should visit the two links in paragraph 3 (“These” posts and “go into”) and the link in paragraph 4 on Bernard Munos.
    When you ask “aren’t you curious?” the answer is no, your approach has already been examined (see those links above). Suggesting it is unfair this blog hasn’t given your views a fair hearing is itself unfair and ignorant of the state of things. It’s given probably entirely too much attention to them. Perhaps one picture of the McKayla Maroney meme mentioning $43 million would be about the airplay it deserves. Like this.
    Furthermore, many who frequent this blog work or have worked in the industry, and thus know firsthand the size of project teams, know how long it took even the blockbusters to reach approval, and how many failures occur along the way (and know how many co-workers work on teams that have never gotten a candidate through trials). Maybe that’s all research cost, in your books, and therefore negligible. If so, negligible is wagging the dog.
    Many readers are former R&D employees of the pharma industry, laid off in corporate actions which speak from the bottom line (far more believably than the PR office) about how CEOs view the profitability and sustainability of their R&D. You will not find anyone more willing to criticize pharma management than these people, but they won’t agree with your estimate. You say the layoffs are a short term aberration because these companies are returning to historical levels, which the data do not support (perhaps you meant a 20 year time frame?), and outsourcing early research. That latter may be true, but that very change in strategy signals that executives view the previous situation as undesirable and unsustainable.
    It may not be an abandonment of all research, but it seems to be an abandonment of a model you claim is cheap beyond belief. If “minor variations” by the score are all they are cranking out, why would that present unacceptable risk and costs? If research is all being funded by disease foundations and NIH grants, these employees are either free or were never hired in the first place in your schema. Surely biotech firms and research teams aren’t as effective at creating follow-ons to existing products as the teams familiar with those products?
    Your fourth and fifth points ignore this entire blog post, except to quibble with the term “me-too” rather than your “minor variation.” The blog post addressed very well how over a ten year or greater development cycle “minor variations” can race to a finish line, and pointed out huge areas which have seen large investment but no successful drugs, and how seemingly minor variations can have profound unpredictable differences in toxicity and efficacy.
    Beyond that, you are overstating the prevalence of follow-ons. If minor variation was an unending source of profitability in the pharmaceutical industry, there would be no need to shove the risk of early development out to startups and universities as they are doing.
    Developing minor variations is no hidden business rule: how many Die Hard or Mission Impossible movies have been made? Do you rant and rave when you go to the store and find Diet Cherry Vanilla Dr. Pepper? How dare they waste development money on these, when people are dying of dysentery from lack of clean bottled water in places like Bangladesh, and we sure could use five cents a gallon desalination of water? Do you think the government needs to step in and limit the profitability of 4-door sedans with combustion engines (beyond 3-4 manufacturers) and force automakers to invest in the true innovation of electric vehicles and 3-wheeled trikes and the 100 mpg carburetors Big Oil has been suppressing all these years? You might say medicine is not a free market like those; I’d agree it is not completely free, but remind you that both cola/soda/pop and automobiles have trademark and patent protections.
    There are diminishing returns to the “that worked, let’s try another” business model, although it is clearly profitable and less risky. In the pharmaceutical industry, improving efficacy over the current standard of treatment makes follow-ons much harder than these other industries (Jaws 3 an improvement over the original Jaws? I think not). Most importantly, when the patent runs out on big innovators, minor variants are going to see profits drop as well. Minor variants have not taken over the pharmaceutical industry, though as real innovation waxes and wanes, so may their relative prominence.
    It might be instructive to put actual names on your “minor variant” rant. Are statins an example of a field overrun with minor variants? Which ones were the innovators or acceptable 3-4 choices, and which are your unacceptable minor variants? In particular, with regard to the minor variants, which had greatly lowered development costs and negligible development risk (because that’s a feature you attribute to minor variants repeatedly)? How much money can be made by any new minor variants at this point? How likely is it the pharmaceutical industry will continue cranking minor variants into this area? There’s no need to estimate, look at for statins. I see trials looking at whether existing statins should be discontinued for some conditions, or useful for new conditions–useful medical questions. But I don’t see new statins, in this area which has been hugely profitable.
    In your paper, you seemed to treat these follow-ons trials as troubling for some reason…why? Is developing the data to show drug X treats disease B in addition to disease A something we don’t need to know? Is there a reason why you would be worried about the size of the money spent on these follow-on trials in relation to the original development trials?
    You said, “Standards for testing effectiveness and risk of harms is being lowered”–can you provide a clear example of this? As I see it, the bar is continually being raised. The FDA started with bare safety, then added efficacy, then added efficacy against standard-of-care not just placebo where applicable (despite the claims on your website), and can be pretty cantankerous on secondary endpoints or unproven biomarkers (contrary to your claims), and has stood pretty strong on balancing harms vs. benefit (contrary to your claims). What examples do you have in mind?
    I hear a lot of people complaining the FDA is far too conservative, because the downside to allowing a drug which turns out to cause harm are far far worse for them than blocking approval. The myth of needing to rush life-saving drugs is one put forth by patient advocates (who in hopefulness and desperation continually see magic cures promised in academic studies and not materializing), not the drug industry for the most part. Drug industry people (even most academicians) know how far from producible reality most of the academic studies are (even before the hype monsters at Med Science Breakthroughs Today websites swallow up the facts), and how far from wonder drug most candidates end up.
    I like prizes, but the idea of abolishing patent protection in favor of prizes is scary bad. You can’t possibly approach the incentive level that patent profits have produced. What prize are you going to offer for curing Alzheimers Disease that would compare to the many many billions you could make from a patented drug? Prizes make more sense as an adjunct to the existing system, as Larry described in #15.
    I think the Gates Foundation is pursuing a nice blend of prizes along with straight-up development money (the “grant prize”) to jumpstart treatments for otherwise unprofitable disease areas. But I think the reason they are doing well is because Bill Gates knows so well the power of free markets and ruthless competition, and knows the limitations of human expertise. So he multiplies the power of his (considerable) money by leveraging existing markets and technologies and choosing very carefully where he gets involved (low hanging fruit). Deciding to apply his “model” everywhere inherently defeats the intelligence of that approach, as does replacing “brilliant capable billionaire” with “politically appointed technocrat” or “committee of politically appointed technocrats.”
    @69 Name withheld:
    Really? You too jumping on the me-too bandwagon? Did Dr. Light link this on some me-too-clone mailing list? See above, but substitute your term “rip-off clones” for “minor variants.” On your website, you say

    “When drugs W, X, Y and Z are all structurally similar, they have almost identical clinical pharmacology. There’s no benefit in taking drug W vs. drug Z. The two drugs have the same strengths and the same liabilities. Nothing truly beneficial has been provided to the American public with the “stolen goods clones.”

    This is false. Similar drugs can in fact have quite different toxicities, pharmacokinetics, and benefits. In fact, you recognize this, since you observe that drug companies test even single point changes to see if activity is lost, maintained, or gained. How can you state the former sentence and then acknowledge its contradiction a paragraph later?
    It is true that very generally speaking, acting at the same active site will broadly constrain benefits, so we can refer to classes of drugs. But the range of benefits and toxicities can swing from very useful to ineffective to tox problems, and up front there is no way to predict which is which.
    Regarding cancer and innovation, re-read the 9th paragraph of this post, the one starting with “No therapeutic area illustrates this better than oncology.”

  69. Adam Jacobs says:

    @62, Prof Light:
    “Median, because a few costly cases which are always featured raise the average artificially”
    Sorry, but I’m afraid that’s a schoolboy error in health economics. Total costs are a function of the mean, not of the median. There’s nothing artificial about the way a few costly cases raise the mean. They still have to be paid for.
    Unless you’re suggesting that you have some foolproof way of predicting right from the start which cases will be costly before you ever start researching them and so can avoid them?

  70. souls_at_zero says:

    Great article, thank you.

  71. Mark S says:

    It should be noted that the BMJ often publishes articles with this sort of bent, even if the scholarship is modest, as it was in this case. So, it is good to see a straightforward rebuttal. This would have been a nice letter to the editor, but I doubt BMJ lwould publish it.
    I’d like to add a few things. L&L seem to discount the value of 505(b)2 approvals in favor of making judgments about the pharmaceutical industry. Proof of safety and efficacy for old molecules in new indications is a win for patients. Many freak out when the cost of a generic that has been used off-label goes up as a result, but patients are better off and the incentive is modest, so costs must be recouped quickly. Because new indications are such a significant piece of ‘low hanging fruit’ they have siphoned off a great deal of potential money that would otherwise be invested in NMEs. I suspect that will change over time, when you have drugs with a good safety and tox profile, why not try to find new uses for them?
    I do think that while L&L missed the point key points made by Derek and others above, there is a decent amount of groupthink in industry when it comes to funding research into some putative mechanisms versus others. When I was doing discovery and then pre-clinical pharmacology, people in academia and industry–including me–confidently spouted off how this pathway or mechanism was responsible for that pathology. It would be so oft repeated that it became gospel. Of course, five years later when phase III trials failed (sometimes spectacularly other times modestly), then we all have to rethink why or just move on. Usually, we just don’t understand the pathophysiology well enough but patent expiry forces you to be aggressive with decisions early on because the financial models generally require approval in ~7 years to generate a positive NPV.
    Once you spend ten plus years doing clinical trials, you start to realize that investment decisions chase after mechanisms and targets that aren’t as well understood as they should be. I don’t say this to knock those doing that early stage work, it just turns out that we all know less than we think we do when starting human clinical trials, which are very costly. Many, including L&L can’t seem to understand that cost is measured as an investment that balances time, risk, and return. You can imagine their scenario and how happy the public would be when a government/publicly funded program fails spectacularly at a $300M cost. Makes a $600 toilet seat seem like a bargain. And anyone that has worked with mixed public/private drug development such as BARDA, knows that those are the death knell for a program. They will spend like there’s no tomorrow and end up with nothing to show for it. If taxpayers only knew….Let’s face it, while those making the investment decisions don’t always get it right and are themselves subject to groupthink and other biases, they risk only their investors’ money. It is called capitalism and it more-or-less works most of the time.
    L&L also seem to miss that notion that diminishing marginal returns are an inherent property of most capital investments. You continue investing until the balance of time, risk and reward no longer makes sense. HIV is a good example. When ViiV was created, it really marked the point where big and sophisticated companies realized that the cost of creating new combination treatments under the current treatment-addition drug development paradigm no longer made financial sense for their investors. Thus, all future development would be funded by revenues from existing products, and not from their investors. And, the treatment for HIV is dramatically better than it was, despite the fact that it isn’t medically where we’d like it to be. I think there was also a recognition, or at least belief., by some of the most knowledgeable and sophisticated people making investment decisions, that small molecule NMEs were unlikely to provide a blockbuster treatment effect and the companies that made them were ill equipped or unwilling to risk the capital required to pursue vaccines. They leave that gamble to the biotech area because their shareholders don’t actually want them to take such big and risky gambles. Instead those shareholder invest (or invested) in biotech.

  72. Framces Groffom says:

    One of the commentators cited the benefits of free market capitalism in the former Soviet Union. If they are so much better off, why has the average life expectancy declined so much?
    Another comment defends the ethics of the drug industry, but Andrew Weil, who also was a researcher, reports in his books how the industry marketed a drug he had warned was ineffective and had dangerous side effects.
    Finally, if all the drugs produced are so beneficial why the bezillion dollars spent on advertizing them to consumers and the sums spent sending doctors on junkets or paying them to do sales pitches?
    I witnessed a doctor pitching Phen-phen at my gym. I wanted to lose weight, but figured if it was strong enough to make you lose weight without changing your lifestyle, it had to be bad for you. Man, was I right!
    I also went to a lecture on arthritis, only to see that the panel of doctors was really there to pitch Viox. I smelled a rat there. Much later I realized they were being PAID to do this. Guess they were wrong there, too.

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