• Pharma’s Research

    Kevin Drum has a piece up discussing Megan McArdle citing Derick Rowe:

    Via Megan McArdle, Derek Lowe blogs today about an entire field of pharmaceutical research revolving around PPAR ligands that pretty much went nowhere and cost drug companies a bundle:

    Allow me to rant for a bit, because I saw yet another argument the other day that the big drug companies don’t do any research, no, it’s all done at universities with public funds, at which point Big Pharma just swoops in and makes off with the swag. You know the stuff. Well, I would absolutely love to have the people who hold that view explain the PPAR story to me. I really would. The drug industry poured a huge amount of time and money into both basic and applied research in that area, and they did it for years. No one has to take my word for it — ask any of the academic leaders in the field if GSK or Merck, to name just two companies, managed to make any contributions.

    ….Honestly, I don’t understand where these they-don’t-do-any-research folks get off. Look at the patent filings. Look at the open literature. Where on earth do you think all those molecules come from, all those research programs to fill up all those servers? There are whole scientific journals that wouldn’t exist if it weren’t for a steady stream of failed research projects. Where’s it all coming from?

    I don’t doubt that Derek saw this argument somewhere, and to be honest, I don’t even begudge him the rant. We’re all sensitive to dumb arguments in our own areas of expertise, especially if we’re really tired of hearing them.

    But I’m genuinely curious: is there anyone of any stature who’s made this argument? I’ve never seen it.

    Tell me about it.  Poor, poor pharma.

    But this happens all the time.  It’s why I reflexively post, whenever I’m going to talk about pharma:

    I want to state clearly the following caveats: I don’t hate drug companies.  I don’t hate people who work for drug companies. I don’t even hate drugs.  In fact, I, as a practicing physician, have seen drugs save lives, improve health, and make daily life incredibly better.

    Seriously, go look.  I said that.

    Anyway, I do think, as Kevin says, that the relative contributions of public and private sources aren’t necessarily appropriate given the sums of profit involved.  I could counter Derek’s anecdote, but prefer to use some data.

    In 2001, Darren Zinner published a study in Health Affairs that addressed this very question.  Here’s what he did in plain English.  He looked at all clinical patent applications in 1998, and carefully examined all the scientific research cited in those applications.  It’s important to remember that this would include all research, not just those for approved drugs, so it even includes the research for drugs not getting to market.  He then classified where that research was done.  Here’s what he found:

    The majority of research cited in patent applications was done in academic centers.  Some more was done in other non-profit or government research centers.  Only 15% of the research was done by industry.  That’s not a very compelling argument for the indispensable contribution of industry to research.

    This work has been repeated in slightly different ways.  In 2001, Public Citizen got their hands on an internal study done by the NIH, where they had looked at the top five selling drugs from 1995.  For completeness sake, these included Zantac, Zovirax, Capoten, Vasotec, and Prozac.  Please note – I’m not disputing the importance of those drugs.  The NIH then looked at the relevant published research for the development of those drugs (and their sources).  Can you guess what they found?

    NIH found that “NIH-funded research played a critical role in drug discovery in each of these cases.” In all, U.S. taxpayer-funded researchers conducted 55 percent of the published research projects leading to the discovery and development of these drugs (and foreign academic institutions 30 percent). “Researchers at U.S. universities and at NIH contributed by discovering basic phenomena and concepts, developing new techniques and assays, and participating in clinical applications of the drugs.”

    In the case of the hypertension drugs captopril and enalapril, the NIH concluded that the drugs were developed thanks to public U.S. research projects and five foreign academic studies. Only three significant studies were conducted by the drugs’ patent holders, Squibb and Merck.

    Furthermore, four of the taxpayer-funded studies were deemed “key” and six of the studies were referenced in the industry’s work. The studies sponsored by the patent holders for these two drugs were of less consequence – none were considered “key” by the NIH. In fact, for the five drugs it studied, the NIH deemed only one industry study “key.” (Public Citizen acknowledges the fact that academics generally have greater incentive to publish research than industry scientists.)

    The similarities from the two studies are convincing.  About 15% of research comes from industry.  Over half was from NIH-funded labs.  If you drill down even more, and look only at key papers for discovery or development, only one of the seventeen papers in this category came from industry.  Again, it’s hard to make an argument that the industry contribution is so terribly important that it justifies never reducing the amount we’re spending on drugs at all.

    Please note that I am not asking for us to abolish drug companies, nor minimizing their potential importance in certain areas.  As infrastructure for bringing research from the lab to the real world, they do reasonably well.  They also obviously make and transport the drugs well.  But let’s not over-emphasize their importance in research and development – which is always what they do to justify the expense of drugs.

    P.S. Did you see how polite I was at the end there?  I told you!

    P.P.S. I plagiarized myself for this.  Deal with it.  I’m still trying to catch up.

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    • Merrill Goozner is very strong in this area, in fact, one of the best folks to read on this subject. A quote below on pharma R&D, and the straw man that the companies fall back on when profits and their pipeline are threatened:

      “R&D moves in tandem with sales regardless of price or volume. So a company that sells very expensive drugs to a very few customers (Genzyme) will spent about 15-20% of total sales on R&D, and a company like Pfizer, which sells mostly not all that pricey drugs (Celebrex, Plavix) to tens of millions of people will spend 15-20% of total on R&D. And if a company has both types of drugs in its portfolio (pricey, and relatively inexpensive), it will still spend 15-20% of total sales on R&D. R&D is a current expenditure like paying sales reps, paying office rent, etc. When sales go south, firms do what they can to pare back expenditures to maintain profit margins at historic levels (ranging from 25-30% of sales).

      What’s interesting is that you’d think that there would be expected payback from R&D, so in tough times with patent expirations looming, they’d spend more on R&D so they’d have more new drugs coming out the other end of the pipeline to replace the expiring patented ones. But it doesn’t happen because industry understands there is no relationship between pouring money into R&D in drug development and getting new products . . . that process is ultimately dependent on science, not on resource inputs.”

    • I like the following two pieces by Angell.


      The second is more pertinent to the current topic, but the first is a classic.


    • There’s one obvious question I have reading this post: How much of the “academic” research is actually funded by industry? Does industry provide substantial amounts of support to academic researchers?

    • Thanks for scouring your old records! There were some (on this topic) that I had missed!