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Derek Lowe The 2002 Model

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Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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June 8, 2010

The Atlantic Monthly on Drug Pipelines

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Posted by Derek

Here's a good piece from Megan McArdle on the pipeline problem in the drug industry. It'll be familiar ground to many readers of this blog (and not just because I was a source for the piece), but it's good to get the word out on these things to as wide an audience as possible.

Comments (15) + TrackBacks (0) | Category: Drug Development | Drug Industry History | Press Coverage


1. RandDChemist on June 8, 2010 1:05 PM writes...

A bit of a snarky ending.

There will always be bottlenecks, and they will shift around over time.

One of the things that has been pointed out before is that the costs are a continuum. From the R portion all the wat through the D portion. The farther along you are, the more expensive it gets to fail.

The targets are harder, but the tools at our disposal are also better.

Reducing costs for clinical trails will certainly help things. It's something I've thought about for awhile.

I've also thought that the costs for developing a drug is also a continuum, as the article points out. The oft-cited Tufts study is misleading the way it is referred to at least. More detail needs to be added here. Understanding the cost hurdles/barriers is important it would seem.

The problem of being too big is also at the forefront in the article. Not being able to work on a smaller scale limits big pharma and limits its ability to spread risk. It also reduces potential growth drivers.

The concept of a base load is also overlooked by some. Novartis, for example, has its generics division Sandoz. Then there are companies that have OTC products. These are important to reduce the impact of the ups and downs of being a pharmaceutical company. It's not simply about margin, nor can it be. Greed will probably be the downfall of some major companies.

Maybe the model of big pharma, except as a holding company, is done?

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2. ronathan richardson on June 8, 2010 1:29 PM writes...

Do conservatives and drug companies actually "blame the FDA" as she says? The FDA allows all kinds of drugs that are only marginally useful through--are there actual examples of drugs that work fantastically that don't get approved?

I imagine she's referring to an argument about the cost/regulations regarding clinical trials. I don't buy that either--drugs that work well in mice make it into humans if a reasonable number of people think they will work there.

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3. ronathan richardson on June 8, 2010 1:32 PM writes...

And that "penicillin wouldn't be approved" argument is absolutely bogus. No, it wouldn't be approved as just another NSAID or acid reflux med, but the FDA approves many compounds that are infinitely more dangerous than penicillin, if the indication is for a serious disease such as what penicillin treats. Just look at what we use to treat cancer.

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4. JasonP on June 8, 2010 2:16 PM writes...

I don't know the answer, but maybe we need a new approach to the way we run clinical trials. It's all on the company and the expense is becoming more and more impossible. This narrows the players and thus the willingness to make new chemical entities in general.

Is there a more collectivist way to handle clinical trials that would expand their approachability?

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5. emjeff on June 8, 2010 2:45 PM writes...

It clearly is "not FDA's fault", but they deserve part of the blame for costs going through the roof. I will give a concrete example. The FDA has just released a draft guidance that would require ALL drugs (even if 100% hepatically metabolized) to do a study in patients with end-stage renal disease. Now, do some drugs exhibit changes in PK as a result of renal impairment even if they are not renally excreted. Yes, but then the next question should be: is it clinically significant? The answer to that is tough, because for most drugs it probably would not be (either because of the safety margin of the compound or the fact that patients with severe hepatic impairment just may not get the drug). So, any reasonable person would probably say that the decision to do such a study should be made on an individual basis, taq\king into account the therapeutic margin of the drug, the likely clinical significance of an increase in exposure, etc. Instead, the FDA want to put out a "one size fits all" guidance which will not improve the public health at all, but will probably make some renal CROs rich, and a lot of drug companies poorer.

It is this propensity to try to bang a square peg into a round hole which gives the Agency its reputation, and causes drug development to become more and more expensive every year.

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6. JasonP on June 8, 2010 3:04 PM writes...

emjeff: Would you say then that in many cases, its a matter of needing a smarter FDA, and thus more expenditure in the department?

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7. CMCguy on June 8, 2010 3:17 PM writes...

One aspect that Derek has often pointed out in this blog is the time cycles and lag encountered in drug R&D. The current trickle in Pharma Pipelines are more likely a result of decisions and actions of 5, 10 and even 15 or more years ago. I doubt there is one major root cause and is a culmination of many factors such as ever changing paradigms or emphasis (Rational Design, Combichem, Biologics, Genomics etc), core Marketing vs Science focus, harder/targets with "no more low hanging fruit" (or perhaps not picking in the right orchard), Internal R&D vs Outsourcing/licensing strategies, M&As toward megaPharmas, escalating costs overall but particularly in Clinical trials, Patents and Legal liability uncertainty and increasingly tougher Regulatory environment.

To focus just on Regulatory, and dispute #2 & 3 rr comments the FDA has gotten tougher in many ways. See some of the "blame" I think is misplaced or not totally justified as the Agency has very tough mission with additional burdens and limited resources (both largely impacted by political considerations). At the same time FDA has a deserved reputation as a entrenched bureaucratic organization that has required information/exercises that were not valuable or necessary then would apply with overly stringent statistical mandates (driving up size of trials as biggest reason for higher costs). Previously although claimed to use scientific rationale for review many scientific arguments went to the side if did not fit seemingly arbitrary demands. May be hyperbolic but I can understand the statement that FDA wouldn't approve penicillin of other older drug today although probably as much because no company in their right mind would perform the studies that would be necessary to convince the current FDA. McArdle's article cites change at FDA so trust is is true and will be of real benefit although seen many variations and little improvements in the past.

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8. Skeptic on June 8, 2010 4:23 PM writes...

Another laughable anti-technology (the DNA sequencers failed us har har har) article written by a drug industry shill who promotes another drug industry shill (the blog owner).

She disregards Cancer as an artefact of aging (while propping up Obesity as a legitimate disease state) which only highlights the absurdity of the drug-centric sickcare system that is prevalent today.

Outsourcing, adaptive clinical trials (aka statistical bullcrap), derisking baloney, direct marketing, lobbying...all the same bullcrap these cons have peddled before.

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9. anchor on June 9, 2010 6:21 AM writes...

Derek: Thanks to your referral regarding Megan McArdle article on the pipeline problem in the drug industry. As someone let go from the major pharmacetical company, I sort of realized that "it was perfect storm" with lot of bad news coming at the same time at a wrong moment (depleting pipeline, rushing to out source, balking by the insurance companies, smitten FDA, clueless managers etc.). The US economy going south perhaps was the straw that broke the camel's back. The situation is very dynamic at the present time. As far as my eye can see, I only see more problems ahead and when the recovery happens (if it ever in a newer model and am yet to see the hint) it will be too late for many! I pity those chemists who are going to graduate.

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10. RandDChemist on June 9, 2010 8:05 AM writes...

One thing that might or might not have been mentioned is that the FDA is woefully understaffed. There had been talk of splitting the F and D or the FDA too.

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11. emjeff on June 9, 2010 8:12 AM writes...

#6 JasonP - I do think it is the lack of experise in the FDA. Look at the Office of Clinical Pharmacology : most of them are fresh out of school and have been with the Agency 2 years or less. Frankly, what do they know? There are few people anywhere in the FDA that have industry experience, and if they do it doesn't help, because their boss probably doesn't have it and wants to do things in a "checkbox" way.

The other thing is that the FDA really doesn't like to think. They would rather enforce, because that is easier and does not depend on the experise of the individual reviewer. That's why their guidances are written as "one size fits all".

As far as increasing their budget, well, why does the industry pay user fees? With industry laying people left and right, I would never support handing the Agency more money without a lot of strings being attached.

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12. CMCguy on June 9, 2010 10:07 AM writes...

#11 emjeff very good summary on some of the issues with FDA as in many ways/areas Agency appears to lack sufficient expertise which does spawn a non-thinking approach. The problem is most companies, especially big/mega Pharmas, create internal systems that reflect this approach so everything gets funneled in to chasing checkboxes. I think that has a direct impact on innovation because when no one is allowed to go outside the boxes to propose or do things differently it then stifles progress with inherent inefficiencies not addressed while raising the bar/effort for potential drugs that do not fit established patterns.

There are lots of arguments about supposed undue influence of Industry User Fees however they long seemed more of an excuse for Admin/Congress not to adequately fund the agency to deal with understaffing and expertise problems plus the expanded role in certain areas.

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13. Evorich on June 9, 2010 11:34 AM writes...

Sorry I'm coming to this a bit late but, to quote:

"No firm has yet taken Longman’s advice and dramatically shrunk its internal research operations."

You what?? Did she miss out a "not" or something??

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14. emjeff on June 9, 2010 12:48 PM writes...

#12 CMCguy - totally agree; I certainly hope I did not give the impression that industry does everything right. Far from it.

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15. Anonymous on June 10, 2010 7:56 PM writes...

There is also a long article on cancer drug development in the May 17, 2010 issue of The New Yorker (page 68).

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