Looking at this point and one of the ones below, I think there's a bit of a misunderstanding as to why drugs are expensive and why they take so long to get to market.

The hypothesis Balaji and others here suggest is that the FDA requires drugmakers to pass useless onerous regulations and expensive studies before it'll approve a drug. In so doing, the drugs become more expensive to market.

Having worked a little in the drug discovery area, I'd advance a different hypothesis: the low hanging fruit are gone.

Balaji in his post explicitly mentions insulin coming to market in 2 years. That's a pretty easy thing to approve: you have a molecule that is identical to one produced by your own body, that has known or easily understood physiology and pharmacokinetics. All you have to show is that your preparation isn't toxic, so of course it's going to take nearly no time to get approved.

Contrast with a cancer drug. There you have a really complicated disease, not very good model systems before you get to test the molecule in a human subject, and when you get there most of your patients die anyway because diseases are hard/they're too sick/it doesn't work well enough.

I think the information/silicon technology side of silicon valley doesn't quite understand how hard biochemistry and biotech actually is. In traditional engineering you know a lot about the inputs to your system (code, silicon, plastic, etc.) and you know a lot about how they work. In Biology/Biochemistry/Physiology none of that is true. Your inputs, underlying system and outputs are hugely complex and in many ways completely non-understood.

That's why it takes so long to "innovate" or develop new drugs. Bureaucracy may not help, but it's not the main cause either.

An essential blog to read if interested in drug discovery:

http://blogs.sciencemag.org/pipeline/

topic relevant post:

http://blogs.sciencemag.org/pipeline/archives/2015/08/07/on-...

Full disclosure: I once met with Balaji for an informal job interview/get to know the company at Counsyl

I agree that low hanging fruit being gone is an issue.

However, that doesn't mean bad FDA rules are not also an issue. From the blog post I linked to:

Any pharma company that wants their medication approved in both the US and Europe has to spend a billion or so dollars getting it approved by the FDA, and then another billion or so dollars getting it approved by the Europeans. A lot of pharma companies don’t want to bother, with the end result that Europe has many good medications that America doesn’t, and vice versa. Just in my own field, amisulpride, one of the antipsychotics with the best safety/efficacy balance, has been used successfully in Europe for twenty years and is totally unavailable here despite a real need for better antipsychotic drugs.

Here's a fun data point: people in the drug discovery business do not see the FDA as an obstacle to doing business. It's the financing model that's commonly seen as troublesome, with the low-hanging fruit gone coming distant second.

For genuine public health emergencies (anyone remember AIDS?) there's fast-track approval, the first antiretrovirals were at market remarkably quickly.

>> "...people in the drug discovery business do not see the FDA as an obstacle to doing business."

Let me play devil's advocate here and suggest that entrenched market participants love high-barrier-to-entry regulatory regimes. The FDA is "people in the drug discovery business'" moat.

When you do drug discovery and development safety and efficacy is your concern. Your aims and the FDA's coincide. It's Pharma-Bro Shkreli who uses the FDA as a moat, but I think the general public sees him as an aberration and pharma wishes he would just go away because he draws the wrong kind of attention.

When cost comes down, financing becomes simpler, right?

It's the risk that kills it. If your compound fails at late Stage 2 or early Stage 3 you just did 7 years for nothing. Also: the penguin effect. A first-in-class compound requires target validation, which adds another few years plus you can't patent that effort, and then the stuff arrives at market and physicians don't know why they should prescribe it. Just compare profit from the first statin to current 5th-generation profits from that same class. Silicon Valley is so much more predictable and offers returns in a shorter timeframe.

I'll agree with that, EU approval should prompt accelerated review. That said, thalidomide was far less bad in the US because the FDA was a little more conservative.

Still, I'd be willing to say EU approval should drop the cost in some way by reusing studies or other things.