Here Are Some Uninformed Thoughts on Pharmaceutical Development

As I’ve mentioned many times, I know almost nothing about science. I’m not even sure that my iPod is working the way it should, so you know that I definitely don’t understand biochemistry or molecular engineering. And while this article about a new federal drug development center is better left to blogs like Xconomy and TechFlash, I’d still like to share a few thoughts. Join me for an uninformed journey.

There’s definitely plenty to talk about in terms of “the role of the federal government” and “whether the NIH should be getting involved in work that is traditionally done by the private sector,” but I actually want to start with the basic assumptions and the two graphics from the article. The stated reason for the NIH to take on this activity is the declining productivity of the industry. But that’s not necessarily what these graphs show.

The first graph shows a “decline in research spending by large drug makers.” Yet we know that a lot of these Big Pharma companies have realized that it’s more cost effective for them to buy up technologies developed through universities and start-ups. And so those research dollars are shifting to acquisition dollars (with many acquisitions being Puget Sound companies). Now, that’s good and/or bad for our local economy but if Big Pharma was monopolizing all the research then we’d certainly have less opportunity for growing our own local biotech industry here.

The second graph shows new pharmaceuticals approved by the FDA by year, and again I’m not sure that means what they think it means. Is the FDA not approving as many drugs because there aren’t as many ones worth approving? Or, as our friends at We Work for Health and the Council for American Medical Innovation might say, is it a problem at the FDA…i.e.-are funding limitations, workforce shortages and new mandates preventing the FDA from “keeping pace in developing and applying a scientific framework that facilitates science-driven assessment of risks and benefits of new medical innovations.” Again, I don’t know anything about science, but you have to wonder whether policy changes that make the FDA approval process more consistent, predictable and shorter would inspire Big Pharma to invest more in drug development than what the NIH is doing with their new development center. Not that they’re mutually exclusive, of course. But I would imagine that it’s easier for GSK to wait five years to go through FDA approval than a small start-up in Seattle that has its credit cards hocked to the limit and its VC investors growing impatient for an ROI. And so a policy approach might be more beneficial to the Puget Sound life sciences cluster than the NIH approach.

There’s one additional issue that isn’t addressed by the NIH proposal: the why. Let’s say that it’s true that – as a country – we are indeed developing less successful pharmaceuticals. There’s probably one of two reasons: 1) some business reason that makes it harder for those companies to be successful, like the increasing pressures of international competition, or 2) as a country, we’re less good at science. And both are probably true. Which means that the best way to address this issue long-term is reinvest in education so that we have as many smart, innovative researchers as possible to try and find the next great cure or treatment.

That having been said, as a short term fix, I think that there’s a lot of benefit to the public sector stepping in to help lower a market barrier like this. Our BETI proposal is essentially just that, identifying a market failure that – if addressed by targeted and strategic public intervention – would make it easier for companies to go do what they do best: make and sell their products to customers. If the government can successfully take something into human trials, I’m sure there will be plenty of pharma companies happy to step in and take it from there. And it might even lower the cost of entry for smaller companies, allowing our region to have more successful and more numerous companies working on taking these government discoveries to market.

Make sense? It seems to. But I’m probably getting a lot of it wrong. Actual science people, how’d I do?

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