David's New Book

Friday, May 4, 2012

Culture Wars and Antibiotics


Two weeks ago, a well conceived article was published in Forbes. It discusses the problem of the lack of productivity of large pharma. The problem is very real.  Just look at the number of patent expirations threatening this industry and the state of their pipelines.  A great example is Pfizer – a company that is shrinking as fast as it can to offset their loss of revenue from Lipitor sales. Another good example is Astra-zeneca – a company that is also fighting loss of market exclusivity with layoffs. Obviously, a better way to deal with the problem is more productivity either from in-house research and development or from external sources. So why is this not happening? 

There are multiple causes for the poor productivity of the pharmaceutical industry overall.  These include scientific issues – its just plain getting harder to find new, safe and effective drugs.  Another contributor is the increasingly stringent and risky regulatory environment affecting products from obesity and diabetes therapies to antibiotics (don’t get me started!). But I think Bruce Booth, in his Forbes piece, has really hit on another underappreciated factor – the increasingly bureaucratic and metrics-driven approach to R&D within the pharmaceutical industry.

At Wyeth at one point, the Discovery group was asked to produce 15 clinical candidates per year (IND ready).  Did this increase their late stage pipeline? What do you think?  What it did, probably, was decrease the quality and increase the risk of the compounds entering phase I development. As described by Bruce Booth, Wyeth R&D was run by committee(s).  But each committee member had their own particular agenda.  Each functional area had their own constraints and concerns – work load, not wanting to be blamed for project failure, etc. So they would try and either block a project or at least make their reticence known to the committee so they could at least say, “I told you so” later.  In the industry, it is always easier to say NO at the beginning than it is to take a risk and support a potentially costly project that, 80% of the time, will fail anyway.

When you layer committees one on top of the other – business development, safety, R&D, the problems compound more often than they are solved. 

Bruce Booth’s solution is similar to one I have been pushing.  He would create geographically localized therapeutic area units with all the critical support required (I presume this is what he means) like toxicology, manufacturing, clinical development, regulatory, etc. He suggests giving them five years of budget and then leaving them alone.  The therapeutic areas would then report directly to the “top” (whatever that is) rather than to a committee. My suggestion has always been to shrink the companies altogether by giving each therapeutic area its own P&L.  That might be achieved by providing a budget (instead of profits) from the mother company or it might be (better) by allowing them to live within their P&L based on profits from revenues derived from marketed products. Essentially, what I am suggesting is taking the Centers of Excellence in Drug Discovery of Glaxo one giant step further towards independence from the leaky, unstable giant mother ship.  

I have said in multiple previous blogs that this would be a great strategy for improving the situation of antibiotics within the pharmaceutical industry.