"Industry is caught in a pincer between [a drug] output that is essentially linear, and likely to remain so, and a cost of
producing [drugs] that is increasing exponentially. At some point, the situation will become untenable. This could tempt investors
to force wholesale change onto the industry unless the industry pre-empts them with radical initiatives." So concludes Bernard
Munos, a strategic advisor at Eli Lilly, in a recent Nature Reviews article on drug discovery. "Lessons from 60 years of Pharmaceutical Innovation" is a deep statistical dive into the performance
of the integrated R&D model from 1950 to 2008, delivering an iconoclastic analysis, supported by surprising facts and provocative
recommendations. Here we offer Munos' four main takeaways. To read the entire study, go to
http://www.nature.com/reviews/drugdisc/. —WA
STABLE PRODUCTIVITY
Figure 1: FDA approvals of new drugs, 1950–2008
Figure 1
|
Since 1950, a total of 1,222 new drugs (1,103 small molecules, 119 biologics) have come to market. The annual rate has remained
surprisingly constant, except for a 15-year bump that peaked in 1996 when there were 51 approvals—a result of FDA clearing
its big backlog. This long view contradicts received wisdom that productivity is cyclically depressed. "If nothing that drug
companies have done in the past 60 years has succeeded in raising mean annual output, there is not a high probability that
established strategies will change this now," Munos writes. "This suggests that this output … reflect[s] the innovative capacity
of the established R&D model."
ESCALATING COST
Figure 2: Estimates of development cost of a new drug, 1950–2008
Figure 2
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The industry's annual investment in R&D has grown dramatically over six decades, reaching $50 billion in 2008. Recently, the
cost of bringing a single new drug to market has more than doubled, from $1.754 billion in 2000 to $3.911 billion (adjusted
for post-approval R&D, new indications, non-US approvals; success rate; inflation; regulatory cost increases). Only 27 percent
of all new drugs cost less than $1 billion to develop, while only 21 percent become blockbusters—a rate that has not improved
over 20 years, despite the increasingly sophisticated sales forecasts and market analyses to increase predictions of success.
This cost-to-productivity ratio is inadequate to secure the future of the industry, says Munos.
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