“I believe this will be the biomedical century,” he continues. “We’ll look back a hundred years from now and say the 20th century was the century of chemistry and physics, and the 21st century was the century of biomedicine.” – John Lechlieter (CEO of Eli Lilly & Co. in a Wall Street Journal interview)
Health, medicine, tailor-made drugs, genetic markers, genetic predispositions, obesity, screening, healthcare – turn on the news, or open a newspaper (or web browser) and you will find articles on all of these topics. This is the biomedicine century that started with sequencing the human genome and has been going full force since then. The next great cure is always (seemingly) around the corner. However, with every achievement there are often more questions that need to be answered. Recall the NOVA special where scientists said that the human genome is like a parts list for a Boeing 777. Having the parts does not mean you know how the plane flies, but it is a first step in understanding how the plane works.
Unfortunately, answering questions means research and research costs money. I was trained as a chemist at a university that focused on industry, so I learned a lot about the industrial side of things. I don’t think “Big Pharma” is all bad, but there is this tangled knot of politics-money-health-patents that is difficult to decipher. In this interview Mr. Lechleiter laments that fewer numbers of companies are looking at the same problems and there is push for developing big selling drugs after the patents have expired, as opposed to creating new drugs:
This strategy is in marked contrast to many of Lilly’s peers, which may also help to explain those P/E ratios. Over the last decade, most of the industry has been slashing research and development in favor of M&A and megadeals; many of the blockbusters coming off-patent were created by companies that no longer exist. “One current challenge the industry faces is that the wave of consolidation really leaves only about a dozen multinational pharma companies that have global reach. That’s it,” says Mr. Lechleiter. (Down from 30 or more not so long ago.)
From a business perspective, making a Lipitor-like drug is certainly more lucrative than developing a cure for a disease that only affects a fraction-of-a-percent of the population. However, thinking in those terms, just seems a bit cold and calculating. It does not seem fair to those with the rare diseases. Yes, high cholesterol affects more people, and yes, the biggest fires are the ones that are put out first, but how can less popular research be done? Is government funding the answer? Is non-profit fund-raising a solution? Private investors are interested in applications, but before we can apply new techniques or use new compounds, sometimes we need to understand the fundamental properties. In chemistry, government funding has helped fund fundamental research, however, with government funding, comes the political side of things. Not all research is politically neutral. Furthermore, these less popular diseases do not make for a large voting percentage. I’m not trying to be cynical. I want to look at the complexity of factors that go into pharmaceutical research and development and certainly politics is one of them. Money is another. Private investors want a return on investment.
This is big business and big politics that tugs at our heart strings. If we were going to improve the system where would we begin? Mr. Lechleiter suggests that the FDA regulations need to be updated for genetically-specific drugs. Some people think the whole patenting process needs to be improved. I, personally, am a fan of open-access research articles. Other solutions might include drug companies not giving doctors incentives for prescribing their drug. Or maybe drug companies should receive incentives for research in rare diseases. What do you think – what is one thing you would change about the pharmaceutical industry?