In an analysis column in the British Medical Journal, York University's Joel Lexchin and Donald Light from the University of Medicine and Dentistry of New Jersey say that the "widely touted 'innovation crisis' in pharmaceuticals is a myth," and that the real problem in pharma is that current incentives reward companies for making drugs that are only marginally better than existing products.
But at In the Pipeline, Derek Lowe says that this opinion is, in a word, "wrong." For one thing, he says, one of the authors' opinions on the industry should be taken with a grain of salt. "Light is the man who's publicly attached his name to an estimate that developing a new drug costs about $43 million dollars," Lowe says. "When I bring up that figure around people who actually develop drugs ... it always provokes startled expressions and sudden laughter."
Moreover, he says, that pharma is in crisis is made evident by the thousands of people that have been laid off in the last few years, and in the R&D centers that have been shut down or outsourced.
And further, Lowe adds, drugs that are being produced today — even of the "me-too" variety — are not simply the same but with minor variations, as Lexchin and Light claim. "The reason that some new drugs make only small advances on existing therapies is not because we like it that way, and it's especially not because we planned it that way," he says. "This happens because we try to make big advances, and we fail. Then we take what we can get."
First, it was not "me-too"
First, it was not "me-too" drugs the authors were referring mainly to - it was the reformulations like the Claritin and EPO derivatives and dosing packages intended to extend patent protection that aren't exactly pushing the innovation envelope.
The layoffs were mostly the result of mergers and the needed "synergies" to reduce costs. The raft of mergers has probably been the biggest hit to innovation investment in pharma in the last 20 years.
It's always been clear that large pharma are much more marketing organizations than research ones. If they could license in all their drugs and merely sell them, most would take that path - and many are now pretty much relying on biotech in-licensing for just that so they can reduce their own R&D overhead (i.e., jobs). Also, their need for blockbusters rather than modest success drives a lot of their efforts which make reformulations and me-too very attractive because they can address already very large markets.
The hyper-inflated billion plus dollar figures for drug development have never reflected true R&D costs per a single drug so $40-50M real costs doesn't seem all that odd (not sure about the final clinical trials). Sure it doesn't include the huge marketing, executive overhead or legal costs, or the costs for failed efforts averaged over all the efforts, but that's kind of the point.
So, I'm more inclined towards the authors' arguments and numbers than Derek's, at least to general scale.