Guest Blogspot- The Future of Pharmaceutical R&D

The productivity of global pharmaceutical R&D has been in a gently declining trend since around 1990. In other words fewer important new medicines have been discovered relative to R&D spending. Many commentators are now saying that the golden era of drug R&D is past. They argue that the most obvious discoveries have already been made.

Many of the negative arguments lack substance. They are excuses for failings in drug industry R&D management and to a lesser extent in governments around the world. The latter have squeezed the industry by exerting pressure on drug prices. In addition, investment in biotechnology companies has not been encouraged sufficiently outside the USA.

The main failings have been in pharmaceutical companies. The truth has been disguised because few people unconnected with the pharmaceutical industry have the expertise to comment.

The solution is not to attempt to divert pharmaceutical R&D spending to organisations outside the drug industry such as universities, public sector laboratories, hospitals or charities. Some drugs have been discovered outside the pharmaceutical industry but hardly any have reached the market without major help from a drug company. Commercial businesses still generally get the best value for money for their drug R&D spending.

The human body is such a complex biological system that mankind will never run out of drugs to discover. The major discoveries of the past may seem obvious with hindsight but at the time they involved dedicated work, sometimes bordering on genius. Nobel prizes were not won by doing the obvious. Drug companies did not discover blockbuster drugs by doing what their competitors found easy.

Developing new drugs should have got easier over the past two decades because of important technological and scientific advances. These have included high throughput screening; genomics; increased knowledge relating to metabolic pathways and the immune system; improved understanding of molecular structures; automated combinatorial chemistry; and improved testing procedures for flagging certain unacceptable features of drug candidates at an early stage.

Why has the drug industry failed to deliver on its inheritance? First and foremost, the basic principle has often been forgotten that a research project must begin with a scientific idea or hypothesis, not a corporate strategy. In other words researchers need to know what they are going to do. If a drug company gives a research team a budget and a top-down objective like getting the firm into the cancer market, scientists without a good idea will have no difficulty in wasting money. The best ideas are scientifically simple but not obvious, address an important unmet medical need and are supported by sufficiently compelling evidence to justify the risks. Often the best ideas come in areas receiving little attention from drug companies and governments rather than in areas being actively pursued by many competitors. Many successful drugs have emerged from pursuing minority or unconventional opinions. Any “shopping list” of drugs that companies, doctors, governments or patients would like to see discovered is probably counterproductive.

Apart from good ideas now, what R&D management most requires are an effective system for capturing future ideas including those from outside the box; a responsive approach to starting projects; and a well-respected procedure for stopping disappointing work. The decision to end a project cannot be purely the responsibility of the people working on it because they are biased. However, the decision-taker(s) must understand all the science fully and command respect. Scientists get demoralised if projects are started and stopped by corporate decree from managers who do not properly understand what the scientists are doing. One important reason for reduced productivity is that many R&D operations, particularly after mergers, have become big, bureaucratic and political with layers of ineffectual management.

The final requirement in R&D is for strong and experienced, regulatory and administrative project management. This is needed to ensure that the right data is collected and the right studies carried out at every stage to satisfy the eventual requirements of regulators on products that are submitted for approval.

The inefficiencies in R&D are apparent from the fact that most large pharmaceutical businesses spend within a few percentage points of 15% of sales on R&D. Clearly companies do not all have the same quality of R&D ideas relative to sales. In a completely efficient market some companies would spend well above 15% of sales on R&D and others much less.

What should governments do? The future for pharmaceutical R&D is bright and the benefits to mankind will remain enormous. Companies, at least privately, are increasingly recognising their failings. The free market will lead to a correction of past mistakes over time. Governments should be mindful of the impact of drug pricing policies on the drug industry and should encourage R&D. They should also help to foster an understanding of what has gone wrong. With appropriate internal changes in drug companies there is every reason to believe that R&D productivity can rise over the coming ten years. If the British Government offers the right encouragement the UK is well placed to benefit.

About Barbara Arzymanow

Barbara Arzymanow is a Research Fellow at 2020health and is a founding director of an independent healthcare consultancy firm. She has been an investment analyst specialising in Pharmaceuticals for 25 years, prior to which she carried out academic medical research in university laboratories. Her experience, obtained entirely from outside the pharmaceutical industry, gives her a unique, political perspective independent of commercial lobbies. She has extensive experience in financing the biotechnology industry, which is vital for the long-term standing of medical research in the UK. She has always been inspired by the scientific excellence within the UK and would like to see collaborations between industry, the NHS and academia strengthened. For more information about Barbara's research and writings including submissions to Government Departments please visit . Barbara also tweets as @barbararesearch .
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