Pharma Reform

The J P Morgan Healthcare Conference is, among other things, an annual four days of back to back 30 minute presentations by Pharma, biotech, device companies, CROs, and a diversity of healthcare institutions.  C-level presenters, mostly CEOs, trying to persuade analysts and potential investors that they have the business model designed for increasing shareholder value, some bolstered by forward looking statement disclaimed historically based promises for product approvals, revenue and earnings growth,  dividends, and stock buy backs.

The conference is the premiere healthcare conference in the industry and has become “old home week” for industry executives to reconnect, schmooze, and initiate discussions for potential deals.  Getting an invitation is near impossible if you are not among the presenting companies or on the JP Morgan A-list.  I am neither, so I spent last week listening to all the webcasts that are available for the Pharma and biotech company presentations.

Perhaps the single most stunning, yet less obvious (non- investor perspective) “take away” for me was how rapidly Big Pharma is moving away from Primary Care.  With almost 75% of prescriptions now being filled with generic drugs, the trend may not be that surprising.  What is surprising is that the pace of proactive strategic abandonment of Primary Care is far more dramatic than what I believe most people in the industry would want to admit or even realize.

This trend really got my attention when companies with traditional Primary Care portfolios blatantly stated or clearly outlined that they have strategically refocused their pipelines and commercialization efforts to target specialty markets.  With very few exceptions, company presentations were absent references to products or commercial strategies targeting the Primary Care market.  Oncology, neurology, psychiatry, rheumatology, and dermatology seem to be the focus of attention unless you had a Hepatitis C compound in your pipeline.

Again, the interest in specialty products is not surprising.  They command higher prices, yielding higher margins with less onerous managed market intervention into prescribing practices.   From a commercial perspective, specialists represent a smaller, more easily targeted and sales force friendly customer base.   Specialty market physicians and their patients also seek out and are more receptive to disease and treatment information making promotional education a viable and efficient tactic.

The implications of this trend away from Primary Care are clear.  Fewer sales reps needed for calling on Primary Care.  Less need for expensive Primary Care sales and marketing support activities such as purchasing mass market prescription data, coordinating the complexities of territory management and sales reporting, and dealing with sales force related employee relations issues.  It also means fewer industry sponsored educational programs for Primary Care.  Fewer Primary Care clinical trials.   And,  fewer new Primary Care products means Primary Care physicians and their patients will have to be satisfied and content with the treatment options currently available to them.

The real message here is that while Primary Care has been at the foundation of Big Pharma growth and financial success in the past and there may well be exceptions in the future, the importance and interest of Primary Care to Big Pharma is diminishing quickly.  If your expertise or responsibilities include pharmaceutical sales and marketing to the Primary Care market, I believe your days are numbered and you probably have fewer days than you might think.  Specialty products and markets are where the action is and where the industry is headed and it is moving fast.   mike@pharmareform.com

I was recently surprised by my own indifferent response to a couple of recent pharmaceutical industry news reports that should have been shocking, if not mind boggling. One of them was:

 “Merck CEO defends hefty research spending” (Reuters).

Defend research spending?  Since when would investors be concerned about spending too much on R & D,  in any industry for that matter, but for pharmaceuticals? Are you kidding?

There are a couple of underlying issues that make this situation very disconcerting but understandable.  First, the article identifies “investors” as those who have expressed concerns about the amount Merck and other pharmaceutical companies are spending on R & D.   I’m pretty sure they are not talking about individual investors but rather institutional investors and investment analysts.

The problem is that these analysts and the firms they work for are mostly driven by short term financial results.  When long term corporate value-creation compromises short term financial gain opportunities, analyst and investment banking compensation (especially bonuses) can be negatively impacted.   For example, cutting corporate expenses to increase near-term earnings usually creates more positive stock movement and compensation opportunities than any long-term strategic investment will ever create.

Just look at the daily stock price ups and downs for pharmaceutical companies driven by a single piece of clinical data or a letter from the FDA.   For an investor market driven by a short term “make a quick buck” mentality, long term financial consequences become somebody else’s problem.

So why does Merck CEO Kenneth Frazier get so much attention for what is considered by some analysts as a questionably high level of R & D spending?  For most pharmaceutical company executives, their short term incentives are often similar to those of the analysts and investment bankers.   So, in this light, Mr. Frazier’s long-term perspective may be an outlier in not playing to the expectations of Wall Street.

Perhaps Mr. Frazier understands that innovation in prescription drugs is critical for the long term success of Merck.  Perhaps he understands that truly innovative new products are what pharmaceutical companies need to remain relevant and viable in the evolving new healthcare market.  Perhaps he realizes that a reliance on academia and small entrepreneurial ventures for innovative new products carries the risk of a limited supply. This reliance on outside sources of innovation could subject his company to the finite availability of viable drug candidates at any given time which drives up pre-approval (and sometimes before clinical proof-of-concept) prices (think Gilead $11 billion acquisition of Pharmasset) with no assurance the products will ever get approved.

Mr. Frazier gets noticed  and media attention because he’s in the minority of not playing to the investment analysts’ needs for short term financial gains that can drive stock prices up and provide investors with temporary gratification while handsomely rewarding analysts and their firms for being so smart.

It would be one thing for investors to insist on increasing the productivity and output of Merck and pharmaceutical industry R & D.  I have commented before  and the industry has proven that merely spending more doesn’t necessarily get you more innovative new products.   But, to suggest Merck is spending too much on R & D seems to me to be another attempt by analysts to drive for a near-term balance sheet excitement that can help them drive share price, temporarily.

I’m sure there is room for improvement in Merck’s R & D productivity but I believe that to outright suggest they are spending too much money on R & D is not in the best interest of Merck, its shareholders, or patients.   mike@pharmareform.com

First, I am not going to defend the FDA or ignore its organizational dysfunction and seemingly antiquated review processes.  No doubt, the agency is underfunded and lacking in the necessary expertise to carry out its broad and geographically disperse responsibilities.   At the same time there are steps the pharmaceutical industry could take to help increase FDA productivity.

Historical precedent would suggest that pharmaceutical companies are more interested in getting products to the market than making sure their products are safe, effective, or even needed.  They tend to do the absolute minimum to get through the regulatory approval process (fastest, easiest indication first), hoping to argue there way through questionable safety data and relying on marketing to find expanded revenue opportunities in patients for whom they have little or no proof of efficacy or safety.   Some of the antics reported in the trade and lay press would suggest that pharmaceutical companies are continuously trying to find new ways to “game” the system.  If you need the details, there is a good review of the past forty years of industry missteps and flagrant disregard for regulatory expectations in the book Pharmaplasia™.   It is clear that the FDA has been put on high alert police mode by what historically has appeared to be an out-of-control, intentionally non-compliant, almost defiant pharmaceutical industry that can’t be trusted.

In this context, is it any wonder that the FDA is skeptically cautious, more demanding for proof of claims, and sometimes even slow and seemingly uncommitted when it comes to product approvals and issuance of guidance documents yet deliberate and critical, albeit intermittent and inconsistent in their enforcement?

Here are five steps the pharmaceutical industry could take to help improve the regulatory process and FDA efficiency.

1. Focus on Innovation
2. Makes safety issues easy for the FDA to understand
3. Make manufacturing quality an organizational priority
4. Commit to ethical and regulatory compliant marketing and sales
5. Establish a base of credibility

Focus on Innovation

Despite the sunk costs of discovering and developing a product that companies hoped would turn out better than it did, don’t bog down the FDA review process with products that have little or no clinical benefits over what is already available on the market.  If you feel compelled to bring a comparable product to market, don’t try to make it sound better than it really is to substantiate a higher price.  Again, trying to angle for a labeling claim advantage that doesn’t really exist consumes FDA time and resources.

Make safety issues easy for the FDA to understand

It is mind-blowing to me that pharmaceutical companies can get to a final advisory board meeting prior to an expected approval and find out there is a concern and unanswered questions about an animal toxicology study or clinical finding?  Well, maybe the company was hoping it would just slip by and nobody would notice the data or they thought they could argue their way through the questionable or disturbing data.  Why not be proactive, anticipate the concern and just get the data to prove it’s not an issue?  Well, maybe companies still believe in the “don’t look for it unless it is a regulatory requirement” theory because they might find something they don’t like or can’t explain.  I appreciate the need for speed in development but you have at least 3 to 5 years after a product starts clinical studies to sort out any safety issues.  That is, if you really want to take the risk to understand the basic sciences of the concern or potential problem.

Make manufacturing quality an organizational priority

First, the answer to industry manufacturing issues is not lower quality standards, fewer FDA inspections, or less rigorous, less critical inspections.  In fact, I am a proponent of maintaining high quality standards,  more frequent and more rigorous inspections, including of foreign facilities.

As challenging as pharmaceutical manufacturing can be, I don’t see why pharmaceutical companies should expect anything other than a clean slate, no 483′s,  when the FDA inspects their facilities.  With appropriate management manufacturing expertise and robust quality systems in place, avoiding 483’s should not be a matter of chance or wishful thinking but rather a matter of fact.  Clean, high quality, cGMP – compliant manufacturing would make FDA inspections (and follow-up) easier, less laborious, and less time consuming.

Commit to ethical and regulatory compliant marketing and sales

“Pushing the regulatory envelop” and “off-label” promotion can drive revenues and increase your market opportunity but also puts tremendous additional workload on the FDA.   So much so that it is clear that pharmaceutical companies have taken advantage of this burden by trying to be clever in their advertising and promotions knowing full well the FDA can’t police everything and the chances of being caught are remote.  Even if caught, the consequences are minimal (a “slap on the hand” in the form of a letter) unless the Department of Justice pushes for some financial penalty.  And then,  it just becomes a cost of doing business.  Unfortunately, pharmaceutical companies may feel they will be at a significant commercial disadvantage if they don’t “push the regulatory envelop” because “everybody is doing it.”

An industry-wide commitment to ethical and regulatory compliant marketing and selling would make non-compliant outliers more obvious and allow FDA to focus resources  on the more egregious and potentially harmful marketing and sales activities.

Establish a base of credibility

If the pharmaceutical industry were trusted, credible, and committed to regulatory compliance the FDA would not have to spend as much time, effort, and resources trying to sort out the “gamers” from bona fide efforts to bring safe and effective innovative new products to market, to maintain high quality manufacturing standards, and to market products in compliance with the approved label claims.  Yes, I believe there are companies and their CEOs who profess this to be their intent, but the historical record suggests there are few who have been able to deliver or credibly live up to this commitment.

mike@pharmareform.com

The US government driven (CMS, Centers for Medicare & Medicaid Services) incentivized push for electronic health records (EHRs) has mostly focused on the business logistics of tracking healthcare delivery and associated costs.  And while the proposed Accountable Care Organization concept deepens the utility of EHRs to include quality and clinical outcome performance metrics they also have implicit goals for managing and controlling costs.  Under the guise of better healthcare at lower cost, my impression is that most healthcare systems are probably looking at this more in the context of making sure CMS or insurers are comprehensively billed and that they have a way to verify billing accuracy and any incentive payments have been rightfully earned.

I wonder if we will ever get to a point of exploiting the clinical information hidden in these electronic data files.   Could EHRs ever lead to better real world data to support evidence based medicine?  With millions of patients in the “real world” data sets over an extended period of time you would think that figuring out “best practice treatment guidelines” would be better served than by a couple of clinical trials with a few hundred or even a couple thousand carefully selected patients studied over a relatively short period of time.  Want comparative effectiveness?  You would think this could be determined with the electronic data on thousands if not millions of patients rather than a small statistically designed trial in a single institution or small number of sites.  EHRs could also be useful for identifying treatment trends or determining where companion diagnostics might be most helpful.

The challenges of HIPAA compliance, research regulations, and bioethical considerations are beyond my area of expertise but I feel it would be a unfortunate if they stood in the way of being able to use this valuable information.  There must be ways to design and execute this type of research without compromising patient confidentiality and ensuring patient safety.  I also appreciate the pitfalls, limitations, and scientific critiques of retrospectively data mining to assess and evaluate clinical data.

The value of EHRs goes well beyond the financial implications and benefits.  To realize their clinical potential the data must be accessible; it must be analyzed and accurately interpreted.  This will require a new breed of clinicians with specialization in the design, execution, and reporting of EHR clinical study data.  Clinical interpretation of the data will require therapeutic area expertise, an appreciation for statistics, and a comprehensive understanding of the data set and the nuances of the data limitations.  These are not part-time jobs but rather new job functions (staffed with expertise) that add cost to healthcare initially with cost benefits coming in the form of more cost effective, better treatment outcomes in the future.

The danger will be in executing poorly designed,  “quick and dirty” reviews and clinical assessments without expertise which can lead to misleading or wrong conclusions and potentially adverse or costly recommendations … purportedly supported by data.   mike@pharmareform.com

Comparative effectiveness studies like the recently reported SATURN study comparing Crestor^® (rosuvastatin) with Lipitor^® (atorvastatin) sponsored by AstraZeneca may on the surface appear to be a big win for patients (and prescription drug providers) especially those awaiting generic versions of Lipitor (anticipated by the end of this year).  The reported preliminary topline results show a numerical advantage favoring Crestor but no statistically significant difference in the primary endpoint of the study (change from baseline in percent atheroma volume (PAV) in a ≥40 mm segment of the targeted coronary artery as assessed by intravascular ultrasound).

The apparent implication from these results is that there is no difference between Crestor and Lipitor and therefore, when available, generic atorvastatin will work just as well as the brand Crestor.  Extrapolating this “no difference” conclusion for a single endpoint to the totality of efficacy for atorvastatin could result in significant cost savings for patients and providers of prescription drug benefits.  You would think this is great news for patients but I believe the ramifications of this study go well beyond cholesterol lowering agents and the impact on future sales of Crestor.

Because of the investor interest, high media visibility, the enormous healthcare cost savings potential, and the mass market served by cholesterol lowering agents I believe there will be significant fallout from this study that is not necessarily beneficial to patients.

First, there are undoubtedly going to be patients who could benefit from Crestor rather than atorvastatin but who will not be given that option.  Smaller patient populations may never be studied well enough to determine if there really are patients who might benefit from one product or another in the face of large comparative trials showing no statistically significant difference.

Second, company executives have always been, but will now be even more, reluctant to sponsor comparative effectiveness studies for established products even when they feel they have an opportunity to demonstrate a difference (as I believe was the case for AstraZeneca).  The requirement for “statistically significant” clinically meaningful differences may be too high a hurdle (and represent too much risk) when complex trial designs are expected to prospectively identify a specific primary endpoint for a patient population with considerable variability.  We may, in an ideal world, feel we know enough about biology, disease pathophysiology, pharmacology, and the nuances of patient populations to be able to precisely design these definitive trials, but we probably don’t for most diseases.

Third, pharmaceutical companies may prematurely stop developing drugs they feel might not be able to demonstrate statistically significant differences to available therapeutic agents.  This would have been a catastrophe for antivirals HIV/AIDS treatments which we now know work best as cocktails of several products rather than one being “statistically  significantly “ better than another.  To further complicate this, regulatory approval studies are designed to establish efficacy and safety, not superiority.  I believe the need for demonstrating a statistically significant difference to meet market expectations and regulatory requirements for making a superiority claim (or to potentially gain approval) will make drug development near impossible where products already exist and efficacy is well established.

And if you are thinking about developing an as effective but “safer” product, good luck.  Regulatory requirements for claiming “safer” are even more challenging and from what I have seen, near impossible.

Lastly, this market expectation for demonstrating “superiority to available treatments” and regulatory requirements for making those claims, I believe will result in fewer therapeutic options for treating specific diseases (think antibiotic drug development over the past decade).  We are getting to a point where if a product is already available to treat a disease,  clinicians and payers want to know if your new product is better.  You would think this is not an unreasonable expectation, but it is an expectation that increases the cost, complexity, and uncertainty of drug development.

At the same time, pharmaceutical companies that demonstrate statistically significant differences for their branded products in comparative effectiveness trials will be able to command “super premium pricing” with an almost monopolistic “treatment of choice” position for the duration of their patent.  When a product demonstrates a clear benefit (statistically significant) over other treatments the bar is  raised for subsequent new products to demonstrate statistically significant superiority.  For products with trial supported superiority, regulators will have no choice but to allow superiority claims,  physicians will have little choice but to prescribe the product, and payers will have little choice but to provide reimbursement.  Unfortunately,  this also dampens drug development interest in therapeutic categories that already have well established “treatments of choice.”

And while we may have more effective and potentially safer products in the future,  if you think prescription drug prices are high now, just wait for these products that establish “treatment of choice” with clinically meaningful statistical differences.    mike@pharmareform.com

While it is hard to argue that you don’t need money to discover innovative new treatments for all the complex diseases that continue to cause illness, disability, and even threaten life.  At the same time, Big Pharma has shown that merely throwing money at discovery research won’t necessarily deliver the results you might expect.

As evidenced by many academic researchers and their teams, it is possible to discovered relevant disease targets and disease altering compounds with far fewer research dollars than Big Pharma has been spending over the past three decades.  Big Pharma R & D budgets, however,  are a misleading indicator of investment in innovation.   In other words, when Pharma holds out the total amount they are spending on R & D ($68 billion), you have to know that only about 30% of that is for discovery and preclinical research.  Still billions of dollars for a disappointing drug discovery return on investment.

Here is another way to look at pharmaceutical innovation productivity.  Let’s say the average Big Pharma has a $1 billion per year to spend on drug discovery and preclinical research.  How do you think that compares to what academic labs (or start up biotechs for that matter) have to spend on discovery research?  Maybe a couple million dollars they have secured in government grants?  Yet, dollar for dollar, who’s delivering the innovation? And why?  An increasing number and percentage of innovative new drugs are being discovered in government or government funded public laboratories.

While they may have less money to work with, academic labs have three essential ingredients that increase the probability for innovative drug discoveries;  expertise, time, and a passionate focus for a comprehensive understanding of the science behind their work (e.g., disease, pathophysiology, biochemistry, and molecular biology).

This is not to say that all Big Pharma researchers lack these essential ingredients.  But even if they do have them, these attributes are mitigated by the distractions of organizational expectations, bureaucracy,  and time pressures to deliver compounds rather than understanding the science.  Perhaps most importantly, expertise in Big Pharma is often rewarded with more work (projects, administrative duties, or increased management responsibilities) that removes (mitigates) the expertise, or at least the focus of the expertise, from the day to day work of discovery research.

Sure, more money can facilitates innovative drug discovery but without expertise, time, and a passionate focus on the science, don’t expect to fill your pipeline.    mike@pharmareform.com

In the previous post we discussed the CMS proposed ACO concept for developing healthcare provider systems that engage individual healthcare providers with “shared savings” incentives to improve the quality of care delivery and clinical outcomes as defined by 65 performance metrics.

Some pharmaceutical industry executives, healthcare providers, and even patients may view these performance metrics as a biased, bureaucratic process for defining medical practice and imposing the “cheapest, least expensive” treatment options.

Whether or not the ACO concept survives in its current form is not important, but rather, I believe it represents the next level of managing healthcare delivery that can not be ignored.   I believe the draft ACO concept also represents an important new context for how pharmaceutical companies need to be looking at developing, marketing, and selling their prescription drugs.  Here’s why…

For decades the pharmaceutical industry has boasted about cost savings, cost-effectiveness, and the pharmacoeconomic value of prescription drug treatment.  Professing that prescription drugs can reduce overall healthcare costs by avoiding the ancillary costs associated with chronic diseases, reducing office visits, keeping people out of the hospital, and most importantly, preventing and curing diseases.  And despite the industry’s best efforts, these claims and propositions have seemed to nebulous, lacking in credible data, and therefore mostly fell on deaf ears within traditional healthcare provider systems.

In an ACO-type healthcare delivery system, these value propositions have real meaning, especially as they relate to the defined performance metrics.  With electronic medical records, insurers, payors, and providers will now have more robust information systems to track and report performance of prescription drugs and validate the value propositions in their own healthcare system.  That means marketing and research must be aware of how their products will now be assessed against these performance metrics and design clinical trials that go well beyond establishing regulatory claims for efficacy and safety.

Getting your product identified as a “treatment of choice” in a performance metric would be the ideal and almost assure commercial success for a prescription drug in that healthcare system.  In fact, pharmaceutical companies who align their products and deliver data driven proof for improving healthcare delivery performance metrics as defined by ACOs will find healthcare provider systems more than willing to encourage the use of their products over other, less performance impacting therapeutic options.  Rather than trying to find ways to limit the use of seemingly expensive new products, this new perspective provides rationale for healthcare provider systems to proactively promote the use of prescription drugs that can help them meet or exceed their performance goals in a cost-effective way.

In the next post we’ll explore how healthcare statistics can provide an interesting platform for driving prescription drugs in this new performance metric, ACO-type healthcare provider market.   mike@pharmareform.com

The commentary and highlights of pharmaceutical industry challenges noted in Duff Wilson’s article “Patent Woes Threaten Drug Firms” in The New York Times (3/6/2011) and the Morgan Stanley report “An Avalanche of Risk? Downgrading to Cautious” come as no surprise if you have read the book Pharmaplasia™.  This disconcerting pharmaceutical industry situation has been decades in the making and unfortunately, will take decades to turn around.

Those looking for or postulating near-term quick fixes from strategic restructurings, mega-mergers, technology acquisitions, or breakthrough serendipitous discoveries to resolve the industry dysfunction will be sadly disappointed.  As described in Pharmaplasia™, the problems in the pharmaceutical industry are deep rooted and involve more than just a lack of  R & D productivity.

Sure there are going to be the occasional successful new product introductions that give us hope that the industry is recovering but even those introductions will have been the result of decades of development work and there will be too few to really make a significant impact on restoring healthy consistent revenue growth for the industry.  For the pharmaceutical industry there are no quick fixes and it could take decades for the impact of the multitude of strategic efforts today to really begin delivering the types of financial results expected from the magnitude of investment being made by the industry.

In addition to fixing R & D, the pharmaceutical industry business model must become more efficient (increase operational productivity and reduce waste), must be more responsive to healthcare market needs, and must replace traditional sales and marketing tactics with healthcare market embraced programs.  Success will depend on competent leadership that is more interested in satisfying evolving new healthcare provider needs and patient well-being than “driving revenues”, satisfying Wall Street, and building personal financial wealth.

In the end, a more prosperous future for the pharmaceutical industry will come from discovering and developing truly innovative new treatments that provide clinically meaningful benefits over currently available therapeutic alternatives.  This will take a major change in R&D philosophy with a much more comprehensive basic sciences approach to finding preventions, treatments, and cures for diseases rather than relying on historical “tweaking of chemistry” and “trial and error” approaches of matching compounds with postulated disease targets.   mike@pharmareform.com

There is plenty of discussion, debate, legal maneuvering by state governments, and media coverage dedicated to the potential repeal of healthcare reform legislation in the US.  While many feel comprehensive rejection of the bill is unlikely, others suggest there are several components of the reform legislation that should be redrafted or eliminated outright.

Without getting into all the nuances (e.g., implications of electronic health records or accountable care organizations) of the legislation, the major healthcare reform implications for the pharmaceutical industry include:

• Commitment for fees, rebates, and discounts totaling over $100 billion over 10 years
• Additional 30 million potential patients with insurance and drug coverage

Agreements and other negotiated benefits for the pharmaceutical industry:

• 12 years of data exclusivity for biologics
• No direct government negotiations on pricing
• No reimportation of less expensive drugs from foreign countries

So, for pharmaceutical companies, does it really matter if the healthcare reform bill is repealed?

To answer this you have to look beyond the next couple of years and any politically driven tweaks to the legislation that might take effect as a result of trying to pacify special interest groups, including insurance companies, advocacy groups, and state governments.  Any near-term implications don’t and won’t change the fundamental realities of where the US and global healthcare markets are trending.  These realities include:

• plenty of inexpensive generic drugs to treat many mass market diseases
• an increasingly cost conscious managed market with direct or indirect (mandatory discounts and rebates) price control tactics
• increasing market expectations for premium priced new products to deliver clinically meaningful benefits over other available therapeutic options (with sophisticated expert reviews of new treatment options)
• increasing demands for definitive pharmacoeconomic data to support the relative value of premium priced new products

Any near-term changes, repeals, or tweaks to the US healthcare reform legislation will not impact these fundamental market expectations.  Interestingly, the more the US market moves to a single payer model with increasing government involvement, the more these expectations will drive the prescription drug market.

Regardless, I believe the implications of any repeal of healthcare reform will be inconsequential in the context of the long-term business model implications for the pharmaceutical industry.  Yet, it’s scary to think about the amount of lobbying money being spent right now by big drug companies and the industry to influence this legislation.

I’m sure there are also teams of people at pharmaceutical companies right now working diligently trying to forecast and model all the permutations of legislative repeal.  While a necessary exercise (don’t want to miss an opportunity or provide Wall Street with flawed financial guidance), a laborious review could be a huge distraction and probably a waste of time in the context of what needs to be done for the long-term.

The real focus for pharmaceutical companies should be on enhancing and bolstering their discovery research.  In the end, the pharmaceutical industry and drug company success will be determined by finding better more efficient ways to deliver products that satisfy a much more demanding market that has higher expectations for therapeutic benefits and value.  mike@pharmareform.com

“I’m sorry we have done everything we can do…there is nothing left to try.”

Nobody wants to hear these words, especially as it relates to our health or the health of a mother, father, son, daughter, close relative, or friend.  Most of us have had people in our lives who have heard these words.  From what should be simple to treat infectious diseases to the complexities of cancers and physically debilitating, if not lethal diseases like Alzheimer’s, there remains a huge medical need for effective and safe new treatments.  Too many people hear these helpless words today and even more may hear them in the future as the population ages with increasing life expectancy.

We have seen how financial rewards can drive  decision making and  behavior in the pharmaceutical industry but really… not wanting to hear these words should be the single biggest reason pharmaceutical companies continue to invest heavily in drug discovery research.

It starts with a mindset to discover truly innovative new drugs that are better than what we have available and that can treat diseases we can’t treat today.  It is frightening that the industry has spent so much in the last decade to deliver so little in terms of innovation.  Think about the billions of dollars spent on clinical trials just to get  “me-too” drugs to the market.  It is equally frightening to think of the cash being spent on mega-mergers and acquisitions to source near-term products to fill the depleted late stage pipelines.  Neither of these contributes to bringing innovative new products to the market that wouldn’t otherwise have come to market.  I’m also not sure how long biotech can support the drug discovery needs of Big Pharma before that well runs dry.

I believe the current “product driven mentality” of many Big Pharma company executives today (and Wall Street analysts) is blinding these companies to the long-term solutions to finding truly innovative new products.  I have said it before.  Drug discovery is hard work and getting harder. It is going to take a much deeper, multidisciplinary understanding of human biology, molecular biology, biochemistry, and pathophysiology of diseases that most companies only think about once they have a potential therapeutic target or drug candidate in hand (most likely acquired from outside the company in most recent history).

I believe this comprehensive approach to drug discovery is where Big Pharma should be making significant investments.  Choose a therapeutic area of interest.  Find, recruit, and collaborate with world class scientific and medical expertise in that therapeutic area.  Invest in an exhaustive understanding of the disease,  explore beyond the known,  and challenge common principles of disease management.  Don’t just look for a compound, look for a comprehensive approach to treating and possibly curing the disease.

Big Pharma is one of the few place with sufficient resources to fund, coordinate, and execute this comprehensive approach over a long period of time.  I am not suggesting universities and biotech companies won’t continue to be a great source of novel, innovative new drug candidates.  In fact, much of the necessary drug discovery expertise now resides in academia.   At the same time however, I am concerned with Big Pharma moving away from drug discovery and relying on universities and biotech as their primary sources of innovative new products.  Why?

Because… I don’t want to hear… “I’m sorry we have done everything we can do…there is nothing left to try.”

mike@pharmareform.com