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A new GAO report sets out to explain why drug development is so expensive and what to do about it. What the report says is important, but what it leaves out is a sense of how the world of pharma actually works.
Why does it cost so much to develop new drugs? Why is the process so inefficient? The US Government Accountability Office recently took a crack at those questions at the behest of Senators Edward Kennedy and Richard Durbin and Representative Henry Waxman. The results of the study are odd. There's clearly a lot that GAO and the legislators understand, but it's equally clear that at some level, they simply don't get it.
For example, the report piles up an impressive (and rather depressing) list of reasons why R&D is so expensive: failure to understand how to translate basic research into treatments; the end of the days of low-hanging fruit, and a shift to more complex diseases and drugs; an industry that focuses excessively on blockbusters; regulatory uncertainty; demands for larger, more complex trials; increased FDA review requirements; and the lack of consensus as to what constitutes proof of safety and efficacy, to cite just part of a long list.
These factors are all important. But the report misses some big ones, too, such as the excessive failure rate of drugs in Phase III because of inadequate testing to determine the optimum dose; the intrinsic inefficiencies of conventional three-phase research compared with the adaptive trials that industry and FDA are moving toward; and operational inefficiencies in recruiting patients, distributing clinical supplies, and the like—nuts-and-bolts issues that may prove to be far more significant than we have previously believed.
Another example: Throughout the report, there is concern that too-few new molecular entities have been identified. But in a way, that's understandable: Even drugs that make only incremental improvements on their predecessors require a lot of money for a modest scientific advance. On the other hand, it's pretty hard to think of a case when the first-in-class drug was the best for patients. Think of statins: Listen to the critics of the industry, and we would have cut off development of that whole category when lovastatin hit the market and gone straight to work on (I suppose) torcetrapib. No Pravachol, no Zocor, no Lipitor—just a nice clean jump from a drug that doesn't quite live up to the category's potential to one with big potential and big problems. Who seriously thinks that would have benefited patients?
And yet another: The report's authors, in their recommendations, seem to think that FDA can direct pharmaceutical companies by giving patent incentives for developing treatments for innovative drugs—and shortening patents for drugs deemed to be less innovative. Like many of the proposals about pharma, it sounds logical enough—but only if you're utterly unfamiliar with how the industry actually works. Innovation is great, but it isn't always the thing that pays off most for patients. And an industry focused only on innovation will both neglect needed improvements in existing drugs—and take on an unacceptable burden of risk.
Even if FDA used more patient-focused criteria to decide which drugs to boost, who's to say they'd be right? Botox looked like a trivial drug when it first emerged as an eliminator of wrinkles. But as time goes on, it looks quite different. When the great pianist Leon Fleischer recovered the full use of his right hand recently—after 40 years of disabling dystonia—it was silly old Botox that did the job. Would any regulator have anticipated the path this drug has taken in finding its true value?
I don't mean any of this as harsh criticism of GAO. But it's obvious that Democratic legislators plan to change the way drug development and the pharmaceutical industry operate. GAO's report may help them, but they need to know, and soon, there's lots more to learn.