ARRRR! Drug Development and Discovery Access to Essential Medicines De-Cal Fall Week 2

Happy International Talk Like a Pirate Day! Drug companies make medicines that cost “lots o' doubloons” My favorite pirate pick up line: Avast, me proud beauty! Wanna know why my Roger is so Jolly?

Roadmap Evolution of the pharmaceutical industry Evolution of the pharmaceutical industry Research & development pipeline: Research & development pipeline: Identifying compounds Identifying compounds Pre-clinical and clinical trials Pre-clinical and clinical trials Production and distribution Production and distribution Marketing and sales Marketing and sales The reality of Pharma The reality of Pharma

Evolution of Pharma Previously unregulated Previously unregulated Huge gains in basic scientific understanding the 1950s and 60s Huge gains in basic scientific understanding the 1950s and 60s Modern drug industry is centralized in about ten major companies Modern drug industry is centralized in about ten major companies Then Now

R&D Pipeline The Players: Basic research institutions Small Biotech firms Big Pharma Contract Research Organizations FDA

R&D Pipeline Step 1: Basic laboratory research Step 1: Basic laboratory research Step 2: Preclinical testing after a promising compound is found Step 2: Preclinical testing after a promising compound is found Step 3: Investigational New Drug filing with FDA Step 3: Investigational New Drug filing with FDA Three phases of clinical trials Three phases of clinical trials Step 4: New Drug Application (NDA) Step 4: New Drug Application (NDA) Step 5: Sale Step 5: Sale

Clinical Trials Phase IPhase IIPhase III Non-blind experiments for dosing Single blind experiments for efficacy Double blind experiments for efficacy

Less of a pipeline, more of a funnel...

Production and Distribution Developing production methods and creating facilities Developing production methods and creating facilities Distribution Distribution Enormous marketing expenditures Enormous marketing expenditures

The $800 million pill?

Important concepts Generic drug manufacturers Generic drug manufacturers New Molecular Entities (NMEs) New Molecular Entities (NMEs) Bioequivalency Bioequivalency Me-too drugs Me-too drugs Lifestyle drugs Lifestyle drugs Second indications Second indications Pharma companies are ruthless profit maximizers Pharma companies are ruthless profit maximizers

The Politics of Pharma Organized into PhRMA (Pharmaceutical Research and Manufacturers of America Organized into PhRMA (Pharmaceutical Research and Manufacturers of America Huge political lobby: Huge political lobby: In 2001 Name-brand pharma spent $75.4 million on lobbying In 2001 Name-brand pharma spent $75.4 million on lobbying That same year generics spent $2.4 million That same year generics spent $2.4 million The providers for a society that increasingly relies on drugs The providers for a society that increasingly relies on drugs

The Good In 2004 name-brand pharmaceutical firms spent approximately $53 billion on R&D In 2004 name-brand pharmaceutical firms spent approximately $53 billion on R&D New medicines generated 40% of the two- year life expectancy gain in 52 developed countries * New medicines generated 40% of the two- year life expectancy gain in 52 developed countries * * F.R. Lichtenberg, The Impact of New Drug Launches on Longevity, National Bureau of Economics Research Working Paper No (June 2003).

The Bad In 2001 an estimated 1.9 to 2.2 million people were driven in personal bankruptcy by health care costs * In 2001 an estimated 1.9 to 2.2 million people were driven in personal bankruptcy by health care costs * In 2004 pharma spent approximately $1.25 billion per NME; in 1995 that number was $317 million + In 2004 pharma spent approximately $1.25 billion per NME; in 1995 that number was $317 million + * Health care costs main cause of bankruptcy, study finds, The New Standard, at +R&D spending per NME Declines, Drugresearcher.com, at

The Questionable Decline in the efficiency of R&D (i.e. less NMEs per R&D $ spent) Decline in the efficiency of R&D (i.e. less NMEs per R&D $ spent) Mergers of big companies hurting R&D Mergers of big companies hurting R&D The cost of marketing of pharmaceuticals The cost of marketing of pharmaceuticals Direct to consumer advertising Direct to consumer advertising Me too and lifestyle drugs Me too and lifestyle drugs Arrr! That be questionable, matey