Against Monopoly

defending the right to innovate

Monopoly corrupts. Absolute monopoly corrupts absolutely.

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More bad news on pharma R&D productivity

CMR International, a firm that tracks that performance of the pharmaceuticals sector, released a rather depressing report on research and development productivity last week. The report will set you back $10,000, but highlights have been made public:

- A total of 26 new molecular entities (NMEs) were launched onto the global market in 2009, an increase on 2008's 20-year low of 21. But the number of launches last year was still only a little more than half the peak level in 1997.

- The number of experimental drug projects terminated at the final Phase III stage of development had doubled in the period 2007-2009 compared with 2004-2006.

- Total global R&D expenditure dropped by 0.3 percent in 2009, after a 6.6 percent rise in 2008 and rapid growth seen in earlier years.

- Pharma is having a tough time selling its new drugs: New drugs launched within the last five years accounted for less than 7 percent of industry sales in 2009, down from 8 percent in 2008, highlighting the big problems that companies are having in trying to reinvigorate their portfolios.

Lessons from 60 years of pharmaceutical innovation

An executive at Lilly, Bernard Munos, has written a very revealing and candid article in Nature Reviews Drug Discovery link here.

The article, "Lessons from 60 years of pharmaceutical innovation" confirms what many already know - that the productivity of the pharmaceutical R&D enterprise is declining and has been for some time. Stated differently, the cost per new molecular entity has increased rapidly. This has occurred despite mergers and consolidation in the industry, changes in R&D management structures and changes to the technologies used to discover new drugs.

He also admits that "in many organizations, short-term priorities encourage marginal innovation, which provides more reliable returns on investment, at the expense of major change." He recognizes, in other words, that the current incentive system rewards the development of me-too drugs over novel therapies. Finally, he admits that alternatives to the traditional patent system, including prizes, may be required to boost R&D productivity.

Very encouraging words!

Yet more IP celebrations

One way to avoid a hangover is to stay drunk. Just as the buzz from the celebrations of World Book and Copyright Day was fading, I joined the local World IP Day festivities.


Unfortunately, I couldn't attend the raucous parties held in that IP hotbed Kenya. Activities included the distribution of "copyright comics" to school students with a view to instilling respect for intellectual property rights.

how should we support pharma innovation?

I have just written an editorial - to appear in Expert Review of Pharmacoeconomics and Outcomes Research -- that argues that stronger patents likely will not reverse the productivity slowdown in the pharma R&D enterprise.


The good news is that there are some promising mechanisms that might work. One of these are the research consortia that are doing the basic scientific research needed to design drugs that have a hope of surviving clinical trials. This research enterprise is far too large for any one firm to conduct on its own. These consortia include the International HapMap Project


and the Structural Genomics Consortium


Both groups involve collaborations of industrial and academic scientists, working at various sites. Funding comes from industry, governments and private foundations. All discoveries are placed in the public domain, with no restrictions placed on their use. I am heartened by how much work that they have accomplished on very modest budgets. (Sometimes its hard to get academics to play nice together!)

Of course the basic research is only the first step in the process of getting a useful drug to market. The next step is to use this basic research to develop and identify drug candidates. I am not familiar with any consortia doing work in this area. Once a candidate has been found, however, David Levine suggests that firms bid for the right to pay for and conduct clinical trials on the candidate. Bids consist of royalty rates that would accrue to the winner from all firms selling the drug, should the drug clear all the clinical trials. The lowest royalty rate wins.

Get ready for the party


Its that time of year again. The annual celebration of "World Book and Copyright Day" takes place tomorrow, 23 April. For those of you unaware of the event, it was organized by UNESCO to promote reading, publishing and copyright. The Day was first celebrated in 1995.



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