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The $2 Billion Pill?

By Kevin Davies

Sept. 18, 2006 | BOSTON — Challenges and Opportunities facing the drug industry were recurring themes in the quartet of keynote speeches at the 2006 Drug Discovery Technology (DDT) conference.

The most bracing challenge came from Steven Paul, executive vice president of science and technology at Eli Lilly, who warned that the cost of producing a successful drug could top $2 billion by 2010 unless the pharma industry could identify new and better ways to improve efficiency and effectiveness across the drug discovery pipeline.

Paul said that multiple forces were conspiring against the pharma industry, including soaring R&D costs, lowered drug approvals, increased development times, the loss of patent protection on several blockbusters, safety issues, and pricing pressures. The sole positive in this scenario is the flow of biological breakthroughs.

 The cost of drug discovery

Lily hopes to reverse the soaring cost of
drug discovery and development

Current Lilly estimates put the cost of a new medical entity at $1.2 billion. Extrapolating that figure, the cost will reach $2 billion by 2010, Paul warned. “This business model will become fundamentally untenable if we don’t do something about it.”

In the next five years, Paul noted that more than 80 successful drugs will lose patent protection, including Zocor, Ambien, and Lipitor. The effective patent life of blockbuster drugs is approaching 10 years, said Paul, who contrasted that short lifespan with the 50 years of copyright protection enjoyed by Mickey Mouse! “We should start the clock when the drug reaches market,” Paul suggested.

But Lilly has itself “dissected and deconvoluted the drug discovery process,” said Paul, with the goal of improving R&D efficiency and the effectiveness of clinical research. Particular areas of focus are the rate of attrition in Phase II trials (only 1 in 5 drugs pass along to Phase III) and reducing the cost of new medical entities from $1.2 billion to $800 million.

“We have targets up the wazoo,” said Paul. “Finding leads, small molecules...that’s another order of magnitude [harder].” Paul identified the gap between lead discovery and the clinic as the “sweet spot for drug discovery.” Paul’s goal is to reduce that timeline to 1,000 days.

Ultimately, however, all drugs carry some risk. Paul said the “public must understand the benefit-risk equation.” He compared the adverse events associated with statins with the fatalities of driving. One million auto drivers give rise to some 220 fatalities each year. By contrast, of 1 million patients taking statins, only two deaths are associated as a result of serious side effects.

Molecular Metamorphosis
In another keynote, Pfizer’s senior vice president of R&D, Peter Corr, said that partnerships among industry, academia, and government agencies were vital to “realize the promise of the biomedical endeavor.”

Not surprisingly, Corr praised the successes of the pharmaceutical industry in producing life-saving therapies and slashing the mortality rate for many common diseases over the past 50 years, including heart disease and infectious diseases. Cancer is a notable exception, although Corr said there were hundreds of strong candidates in development, including a couple of dozen at Pfizer. Corr also cited studies pointing to the profound economic benefit of even modest reductions in mortality for various diseases, amounting to trillions of dollars over patients’ lifetimes. “What is the ROI for a 10 percent reduction in mortality for diabetes? About $450 billion,” said Corr.

Corr listed four points that, in his view, should be the future focus of the industry:

•            Prevention and earlier intervention
•           Better diagnostics, including home diagnostics, which could be key
•           Earlier, focused treatment - including pharmacogenomics
•            Improved compliance - Noncompliance approaches 50 percent after 18 months according to some studies. “This is unacceptable,” said Corr.

But the industry faces severe challenges, not least the fact that total global pharma R&D spending now exceeds $60 billion per year, without any palpable improvements in new drug approvals. “We must be very stupid,” Corr said sardonically. The truth, he said, is that “it’s much more complex than we think it is. I think the public thinks we know much more about mechanisms and safety” than is the case.

Corr singled out the abysmal 1-in-5 success rate in Phase II trials. “How can we prove efficacy in humans earlier?” is a critical question, said Corr. Potential answers include improving discovery yields, earlier toxicology testing, and biomarker development. Corr also advocated the use of earlier clinical technologies, such as dynamic contrast MRI in animal studies.

Corr concluded by advocating multi-partner collaborations as vital to the health of the “biomedical ecosystem.” He pointed to examples such as the NIH Roadmap and the FDA’s Critical Path, as well as the poorly named Pharmaceutical Innovation Steering Committee, or PISC.

Funding Problems Ahead
MIT president Susan Hockfield said that we have “drugs now that previous generations couldn’t even dream about, and the promise of more customized treatments ahead. But we can’t afford to be complacent.”

Hockfield said that “the public has insufficient understanding of our ignorance.” The development of drugs such as Herceptin and Gleevec, based in part on fundamental molecular breakthroughs in academia, still took two decades apiece, she said.

Despite the recent doubling of the NIH research budget, Hockfield said the future is bleak. Next year’s NIH budget projected to be the third consecutive drop in real dollars, and the level of funding as a portion of the GDP has fallen by more than half since the early 1960s.

Citing MIT Center for Cancer Research director Tyler Jacks, Hockfield said, “The only cure for cancer is research.” MIT is the home to important cross-disciplinary initiatives such as the Computational and Systems Biology virtual institute, as well as the Broad Institute and the World Wide Web Consortium. Hockfield said: “Creative uses of IT are just one route on the pathway from bench to bedside.”

She ended with a plea to pharma to raise its support for basic research.

Sidebar: Medicine’s Molecular Metamorphosis
Andrew von Eschenbach, the acting head of the U.S. Food and Drug Administration (FDA), said that the FDA must embrace change to improve the efficiency and safety of the drug approval process. In his DDT keynote, von Eschenbach said that the FDA and the drug industry “share a covenant with our patients... We must change. The FDA must change.”

Von Eschenbach said the industry was on the brink of “a molecular metamorphosis in which medicine will look no more like the past than a butterfly looks like a caterpillar.” An explosion in science and technology is transforming healthcare into a new era of medicine that is “preemptive, preventative, and participatory.”

The FDA, he said, had a critical role in building the bridge “to translate progress to protect the health of patients. The bridge of the past served us well — it is the gold standard — but...we must morph the bridge into a new reality.”

Von Eschenbach promised a “stronger and smoother” agency: stronger, by applying the tools of science and technology to assist making regulatory decisions, and smoother, by embracing modern management and structures to improve the agency’s efficiency and effectiveness. IT tools would be important in this transition.

However, despite the rosy rhetoric, von Eschenbach offered little in specifics other than hailing two ongoing FDA initiatives, the exploratory IND program and the well-received Critical Path Initiative, as a pair of programs that are providing new routes and collaborative projects to expedite the path to drug approval.

But von Eschenbach concluded, “Rapid does not mean reckless.” The need to build partnerships going forward is key. “The game has changed from golf to basketball,” he said.  --K.D.

Email Kevin Davies at

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