Big Pharma’s Flimsy Excuses for Not Developing Drugs

We’ve discussed the fact that despite the population’s increasing resistance to antibiotics-and therefore their diminishing ability to beat infection-pharmaceutical companies aren’t exactly eager to develop new antibiotics because there’s little profit in it.

But antibiotics aren’t the only class of drugs lagging in development. As described on MedPage Today, innovative drug development lags, according to two researchers, because the pharmaceutical industry prefers to invest in protecting the franchises it has built around existing products.

Resources devoted to finding new products for unmet needs are paltry compared with what Big Pharma spends on marketing and on research to refine its current drugs, claim Donald W. Light of the University of Medicine and Dentistry of New Jersey in Cherry Hill, N.J., and Joel R. Lexchin of York University in Toronto.

“This is the real innovation crisis: Pharmaceutical research and development turns out mostly minor variations on existing drugs, and most new drugs are not superior on clinical measures,” they wrote in an article published in BMJ, the British Medical Journal.

Reasons given for failing to invest in drug development are cost (developing and bringing drugs to market averages $1.3 billion per each approved new chemical entity, or NCE), and a decline since the mid-1990s in the rate of NCE approvals.

Light and Lexchin, however, find these arguments mostly bogus, and founded on phony statistics.

“Both claims serve to justify greater government support and protections from generic competition, such as longer data exclusivity [restricting competition from generic versions] and more taxpayer subsidies,” they wrote.

The $1.3 billion figure is inflated, the researchers claim: “[H]alf … comes from estimating how much profit would have been made if the money had been invested in an index fund of pharmaceutical companies that increased in value 11 percent a year, compounded over 15 years,” a conclusion they reached as the result of research at Tufts University.

Half of the remaining Big Pharma balance is paid, Light and Lexchin say, by taxpayers in the form of deductions and credits. The companies’ actual average expenditure, they calculate, is only about $330 million, and that’s for the most expensive new products, which constitute about 2 in 10 drugs.

The average expenditure for all NCEs is about $90 million.

The decline in NCE approvals is an exaggerated claim Light and Lexchin contend. The mid-1990s benchmark is misleading because that’s when there was a large spike in approvals associated with the introduction of FDA “user fees” that allowed the agency to clear a backlog of new drug applications.

Recent annual rates of 15 to 25 NCE approvals are consistent with averages from 1955 into the early 1990s, Light and Lexchin say.

The percentage of approvals for true medical advances, versus copycat products, hasn’t declined very much. Thirty-four percent of drugs approved from 1974 to 1989, Light and Lexchin report, represented “important therapeutic gains.”

The real enemy of innovation, they suggested, is the industry’s lust for marketing and for protecting existing blockbuster products. An article in PLoS Medicine a few years ago showed that for every dollar of revenue pharmaceutical companies spend on discovering NCEs, they spend almost $25 on promotion.

Pharmaceutical company behavior, Light and Lexchin say, exploits patent protection laws and free-market competition by keeping potential competitors with generic versions out of the market.

They propose that regulatory agencies such as the FDA make requirements for new drug approvals considerably more rigorous. Simply being somewhat more effective than a placebo (fake or inert therapy) and relying on surrogate endpoints-measuring the effect of a certain treatment by correlating it with but not proving a clinical endpoint-instead of stringent clinical results are insufficient. Such low standards, they say, “allow approval of medicines that may even be less effective or less safe than existing ones.”

Light and Lexchin also believe that high prices for new products are not an appropriate reward for drug innovation. They support giving large, taxpayer-funded cash prizes to companies that deliver demonstrable improvements in health care, and allowing immediate generic competition as a cost-control measure.

That way, they say, “innovators are rewarded quickly to innovate again,” health-care costs are reduced and patient health and quality of life improve.

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