Sometimes I feel sorry for the big pharmaceutical companies.
In popular culture they’re part of an axis of evil that includes other
satan-worshipers like oil companies and banks. Have you seen The Constant
Gardener? Not a particularly sympathetic portrayal of the industry.
Things have not been looking good for the pharmaceutical
industry lately. The health of each company depends on how many drugs they have
under patent, and the size of the market for each of those drugs. In 2005, the 9
largest pharma companies had 9 new molecular entities (drugs, vaccines, etc)
approved by the FDA. In 2010, they had 2. Many of them face expiring patents
with little to fill the gap. Lipitor, Pfizer’s blockbuster cholesterol-lowering
drug, lost its patent protection at the end of November. This drug alone
accounts for 1/6 of Pfizer’s income, and they are in a battle to hold market
share against their new generic competitors. While consumers, the NHS, and
other health insurers around the world are ecstatic, we should be cautious
about the graves we dance on. Pharmaceutical companies have discovered and
developed drugs to treat a myriad of human diseases. Sales fund research. After
years of increases, R&D spending fell by almost 3% last year. In 2011 both Novartis
and Pfizer closed their major UK R&D sites. Big pharma isn’t finding new
treatments and time is running short.
What’s going wrong? Drug discovery is a long and expensive
process (see my human genome post). It takes an average of 13 years for a drug
to reach the clinic and can cost upwards of $1bn to develop. A much bigger
problem is the attrition from drug target identification to FDA approval. After
preclinical development, a drug goes through clinical trials (phase I, II and
III), gets registered with the FDA and finally becomes an approved drug. For
every approved drug there are 24 drugs in preclinical development. Drugs fail
at every stage of development, but the biggest drop is after phase II clinical
trials. Phase I clinical trials aim to find the best dose, phase II trials
examine the efficacy of the drug, and phase III trials compare the new drug
with existing treatment regimens. Approximately half of the phase II trial
failures are because the drug doesn’t work.
Pharmaceutical companies have responded by making significant strategic and structural changes. Many of them have cut early-stage in-house research in favour of mining biotechs and academia for drugs and drug targets. Many have fostered increased cooperation between industry and academia. These changes are probably a good thing both for pharma and for drug development in general. Pharma companies get to outsource the risky early stages of drug development, and budding biotechs have someone to sell their product to. Academics can publish their results in interesting journals even if they don’t have obvious and immediate therapeutic value. Increased competition amongst the biotechs should foster creativity.
There is, of course, a caveat to all of this. Industry experts have always known that results are not always reproducible from one lab to another. It’s generally thought that about half of drug targets don't validate. It turns out that this is may be a dramatic underestimation of the problem. In fact Bayer scientists could only validate about a quarter of drug targets found in the academic literature. According to Reuters, drugs that originate in-house are 20% more likely to make it to the market. What R&D budgets have saved on in-house programs they'll have to spend on target validation and intellectual property acquisition.
This strategic change may be good for a different reason.
While half of phase II trials fail due to inefficacy of the drug, 29% failed
for "strategic reasons" (one common translation: Pharma B has a
better drug that Pharma A's drug can't compete with). Stage II trials are time-consuming
and costly, and overlap is not particularly constructive. Decreased reliance on
in-house programs should make the early stages of drug development more open.
Small biotech companies with good products will peddle their wares to multiple
different pharmas, so even if Pharma A doesn't buy a given drug they still know
that the drug exists and is being developed by Pharma B.
GlaxoSmithKline had a different approach. Three years ago
they separated their R&D into Discovery Performance Units, each of which
should each perform as an independent biotech. Drugs coming out of these units
should be as reliable as previous in-house drugs. GSK will be at a distinct
advantage: they will have reliable drugs and access to information from
biotechs, but won’t have to share information on their own drug development
program. Not necessarily good for the industry, but good for GSK.
Strategic changes can help the industry, but they cannot
save it. Over half of phase II trials still fail because the drug doesn’t work.
They need to find a way to choose better targets. A recent Nature Chemical
Biology paper by Mark Bunnage, a Pfizer medicinal chemist, outlined a number of
ways in which target selection can be improved. He encourages target selection
based on a number of hallmarks of target quality, including human genetic data
and the existence of robust endpoints.
In my mind, the purpose of the pharmaceutical industry is to
find new cures to diseases. In reality, big pharmas spend twice as much on
marketing as they do on R&D. Biotech companies spend about 70% of their
revenues on R&D, pharmas spend about 13%. Different companies, different
priorities. And different outputs. I’m not saying the pharmaceutical industry
is full of saints, but the research that has happened on their dime has
improved the lives of millions. I hope they find a way to continue finding
drugs to sell.