Actually that's not true. Big pharma spends twice as much on advertising as they do on R&D:

http://www.sciencedaily.com/releases/2008/01/080105140107.ht...

They also spend a significant amount of money on government fines due to corrupt practices (i.e. killing people). They are now the single most corrupt industry, paying significantly more fines per year than the entire military industrial complex:

http://www.citizen.org/hrg1924

Trust me, having worked in an R&D organization, there was no want for more funding. There was an incredible level of funding. If the problem in the drug industry is simply that not enough is being spent on R&D, that is easily correctable. Unfortunately for all of us, that's not the problem.

    First - and I know that I'm going to hear about this from some people - you might assume that different companies are putting different things under the banner of R&D for accounting purposes. But there's a limit to how much of that you can do. Remember, there's a separate sales and marketing budget, too, of course, and people never get tired of pointing out that it's even larger than the R&D one. So how inflated can these figures be?

We can discuss evidence when the CFOs of these corporations open their daily work to a public VNC session.

The problem with the drug industry is basically that many of their most important epistemological assumptions are largely incorrect. The reason the entire industry is about to go under isn't because all the easy cures have been taken, it's because they started to buy into their own bullshit. Their astronomical R&D costs and terrible success rates are largely their own fault, so I don't really buy this high cost of R&D argument as a reason for not making the drugs more widely available. I won't bother rehashing all of the epistemological problems with allopathic medicine here, but I was link to this video which talks about why the ubiquitous mouse model is so problematic:

http://vimeo.com/33803995

Plus, many of the new drugs are just evergreens, so much of that 'R&D' is really just a clever way to screw the patients.

Pharmaceutical companies were spending around £10,000 per GP per year. (About 40,000 GPs in UK * £10,000 == £400,000,000) Because of our PPRS that figure is probably one of the lowest in Europe.

The UK spends about £11billion per year on medication. Of that about £8billion is spent on branded medication. We have regulation schemes aimed at driving costs down.

The market and regulation of medication is baffling with many hidden effects. Here's some ridiculously in-depth information about the UK Pharmaceutical Price Regulation Scheme, and about regulation of meds in Europe.

(http://www.euro.who.int/__data/assets/pdf_file/0008/98432/E8...)

(http://www.oft.gov.uk/shared_oft/reports/comp_policy/oft885....)

[1] - because any medication is only £7.40 per item (per month) and only about 15% of people need to pay because of all the exemptions. Also, because of the pay structure of prescriptions there's a split between doctors (who write prescriptions) and pharmacists (who earn money for dispensing).

The abstract indicates most of the fines come from "illegal off-label drug promotion" and "overcharging state governments". It could be argued that the first shouldn't even be an issue, and the second, depending on how "overcharging" is defined could be outright fraud on the part of big pharma, fraud on the part of state governments, or something in between.

Edit: Well, I'm a moron for talking before reading. Scratch that.

Because I read the study.

Or I could be wrong and those $12B really goes into equipment and lab workers wages, but you won't blame me for finding it real hard to believe until I see at least a rough breakdown of how those costs are summed up.

From the article: "Bayer tried to justify its high price by making claims of high R&D costs, but refused to provide any details".

That either means they don't know themselves, or it means that the larger part of the budget got "lost" in requesting approval forms paper pushing greasing cogs and lobbying politicians.

Preclinical and Phase I - II trials aren't too expensive, in the order of millions of dollars.

But also remember, for every ~10,000 candidates that enter preclinical trials, about 1-2 will actually pass FDA approval.

The billion number isn't just for one drug, it's also for the 10,000 failures that you had to weed through to find that one drug.

Phase I is safety trials in healthy humans (young males generally). Phase II starts using it in the target population (the sick) and begins looking at dosing requirements and preliminary efficacy data.

But the big one, Phase III, that's the big group, expensive, efficacy trial. This is the trial that has to prove, beyond a shadow of a doubt scientifically, that the drug does what they say it does. A good Phase III trial can cost in the hundreds of millions of dollars easy. I've heard of $250,000,000 Phase III trials before.

If "the most rigorous evidence requirement in the world" is your example of "inefficient and corrupt", than I guess we'll just disagree.

But the FDA is the most strict drug regulatory body in the world, and the amount of evidence for efficacy that they require from the industry is truly impressive and truly does warrant the billions price tag.

Funny how there are so many SSRI's on the market. Funny how this model results in the conclusion that it's a good idea to give kids amphetamines when they are known neurotoxins. Funny how medical marijuana is taking such a long time to break through into the mainstream. Politics play a huge role in business and tend to turn it into a theater of the absurd.

The FDA does something else: Drug company says they have a drug that does X. Does the drug do X?

That's it (okay, the FDA regulates a lot, but in the context of pharmaceuticals, this is their mandate -- "efficacy"). They require inordinate amounts of proof of efficacy.

Not the morality or ethics behind the application of the drug, but rather: does this molecule, in this concentration, in this delivery route, in this population, have the exact pharmacological effect that they claim it does.

From there, it is up to each person and their doctor to decide what treatments are needed!

Blame the doctors, then, or blame Congress, but the FDA follows it's mandate quite wonderfully.

Why? What's wrong with SSRIs?

> Funny how this model results in the conclusion that it's a good idea to give kids amphetamines when they are known neurotoxins.

Giving amphetamines to children is certainly debatable but amphetamines are not neurotoxic. Methamphetamines are neurotoxic, especially in recreational doses, but non-methylated amphetamines are not.

> Funny how medical marijuana is taking such a long time to break through into the mainstream.

Entirely different issue.

The reason why meth is a public health issue while addy arguably is not is mainly because requiring a Doctor rx, using an exact dosage with no refills, combined with the purity and safety of GMP-produced drugs, eliminates most of the issues behind meth.

I was shocked when I found how just how similar meth and adderall truly are.

Also, with Adderall, you can't afford to just take more to offset withdrawal symptoms, because you only have so much. The temptation to take another as it wears off is pretty substantial, especially for long-time users.

Nor have I ever had any compulsion to clean everything in sight or pluck every hair from my face. It certainly makes cleaning easier, but I certainly don't feel the need to do it anymore on or off of it.

You appear to have become addicted.

I didn't realize this was unusual.

Are you completely fucking stupid? Read these and stop spreading dangerously wrong information - http://www.amphetamines.com/neurotoxicity/index.html - http://www.aapsj.org/view.asp?art=aapsj080248

At least do your research if you're going to act so certain about something. This post has links to a few studies demonstrating said neurotoxicity - http://www.longecity.org/forum/topic/47231-amphetamine-neuro...

>Why? What's wrong with SSRIs?

Gee, I don't know. Maybe the horrible withdrawal (http://en.wikipedia.org/wiki/SSRI_discontinuation_syndrome) combined with the fact that their effectiveness is statistically insignificant (http://www.science20.com/natural_medicine_101_jeffrey_dach_m...).

That is exactly where so much of the inefficiency comes from! How rigorous does an evidentiary requirement have to be before it costs more than it's worth? If getting FDA approval for a new drug cost, say, $100 billion, would the added safety be worth holding back all the drugs that wouldn't be profitable enough to offset that huge up-front cost? A truly efficient FDA would take into account not just the harm of being too lax, but also the harm of being too strict.

(There's an even starker example of this in the Nuclear Regulatory Commission. Their regulations are so strict and red-tapey that the economics of nuclear energy in the US are inferior to those of coal, which is much more dirty and dangerous. Caution has costs.)

Orphan drugs are treated differently: http://en.wikipedia.org/wiki/Orphan_drug

The FDA also maintains a list of pre-approved substances that can be used without testing. I think this is it: http://www.fda.gov/Drugs/InformationOnDrugs/ucm129662.htm

It's insanely difficult to bring a new drug to market. Imagine all of the crazy combinations of people that take them and if you miss one small group that has an adverse reaction you could be talking 1000s of people that are lining up to sue you out of existence or if you're in another company the regulatory body doing it for them. People around the world benefit immensely from our "inefficient and corrupt bureaucratic machinery" because they get safe drugs.

Also, from the article, "Bayer tried to justify its high price by making claims of high R&D costs, but refused to provide any details". This is just plain rhetoric plain and simple. You see politicians do this everyday because there is no real way to refute it.

Now imagine how many labs, hospitals, scientists, doctors, statisticians, patients (oh they do get compensation), and auxiliary clerical workers need to be paid for the whole process.

Most research dollars go into new therapies with completely new mechanisms of action.

Companies are often working in similar areas, that's true. The best example of this is the statins. Lipitor was the 5th statin to hit the market. Was it a me-too drug? I guess, but it was also superior to the other 4 that came out first (less incidence of muscle damage, more efficacious). Did Pfizer say "Gee, let's copy that other statin?" Obviously not since getting a new drug to market takes 10 years and they came out only a few years later.

is this intrinsic to drug manufacture? would regulatory/tort reform help?

I guess you could say it's the price of having access to thoroughly tested drugs that are both safe and efficacious.

Even a common OTC drug like guaifenesin that has been around since the 50's is difficult to find by itself, except in the newly patented time-release formulation (ie. Mucinex). (Although it is an ingredient in many cold medicines.)

I hope so, because the current one isn't working for consumers. Even with the billions spent on R&D, it turns out that many of the drugs Big Pharma turns out are no better than placebos. It's not hard to see why: a big company spends X amount on each failure and needs a 10X hit to offset the costs. If one doesn't materialize, it's not hard to rig the statistics to show some marginal benefit for a chosen winner, and a big marketing budget and the placebo effect takes care of the rest. Thanks to this model, we've finally conquered the scourges of restless leg syndrome, overactive bladder, and general anxiety disorder.

I would argue that it's actually impossible to economically conduct sufficient studies to reliably predict the efficacy and long term safety of drugs in the general population. And you're right, every drug on the market has passed Phase 3 trials because they're cherrypicked. A big drug company knows how many drugs it needs in production to ensure that some percentage of them are statistically likely to get through Phase 3 trials. To believe otherwise is to believe a drug company would bet a multi-billion-dollar enterprise purely on a research gamble. Is it possible for them to lose? Sure, 'statistically likely' isn't a guarantee. But it's much better odds than depending on stumbling into an actual cure.

I'm not suggesting all drugs are worthless; only that drug companies do not need to produce effective drugs to stay in business.

Pretty sure the opposite has been proven, e.g. GSK's shenanigans with paroxetine.

On the net I don't think this is a good thing, but it should free up a lot of vary intelligent people to work on other lines of research. Hopefully, we may eventual start to develop the tools to build direct DNA specific medicines on the fly by using the fruits of those other lines of research.

As you mentioned the patent cliff is looming for a number of big pharma actors, and what this is going to result in is less innovation and more strategic moves to other "easier" markets such as generics or OTC drugs. This is just plain bad for everyone in the end.

I'm not willing to increase my chance of getting killed by medicine on behalf of someone else's profit margin. They have a big, powerful lobby, they should suggest process improvements. And make some on their end, as well, nobody's charging them billions in fees, they spend that money on the typical big-company waste in the process of complying with those regs.

At this point in time the FDA has incredibly high standards of safety for weight loss drugs and not without reason. But what are the costs of the 40% of obese Americans who will get diabetes, cardiovascular disease, etc, etc?

EDIT: I am trying to say that while obesity is 'bad', giving them a drug that adds to their risk levels is not a solution.

If you are still pro your position, bear in mind that you are now throwing dice and hoping that: (people who improve) >= (people who suffer + nothing happens).

Are you qualified to play dice with peoples lives?

Mind you, this drug is already approved for use in humans. The FDA made the call that preventing cleft palates in babies (mind you the company offered to restrict the label to "non-child bearing women") was more important that reducing levels of obesity.

The FDA "suggested" the company run a 10,000 person clinical trial (estimated at $100M) to prove it didn't.

From what it looks like the FDA is going to renew qnexa by April 2012.

And we have already gone past "letting the at risk group decide for themselves." it's hard to be succinct and explain the many reasons why we dont use that particular system when it comes to medication.

The communication to the patient should be fully transparent, and it should be up to the patient to choose what they want to do, not just regulators.

An excellent read on another case coming up before the Indian Supreme Court, regarding Swiss drug co. Novartis's blockbuster anti-cancer drug Gleevec.

http://www.nytimes.com/2012/03/07/business/global/indias-sup...

I think that judgement might be more important, as the NYT article points out how the US govt is trying to influence the outcome. http://keionline.org/sites/default/files/tpp-10feb2011-us-te...

What are your thoughts on Gleevec ?

First of all, you need the brains to develop the drug. I can't imagine that this involves a team much larger than a pre-series A startup.

Does the development process for creating a new drug promote failing fast?

Does keeping the entire R&D process in house help or hinder?

How far can a team get before it needs to try a drug on humans and how much does it cost to get that far?

Are there any startups that just manage a portfolio of patients with symptoms/diseases/disorders and automatically pair those patients with drugs that might benefit them?

Should the process allow the patient to "price" his or her own life/health, whereby patients can opt in to Phase 1 trials for a lot more money than Phase 2 for example and name their own price in the process?

How much of the money spent is actually (time*wages) for a lot of people for an unnecessarily long process? Is burn rate a consideration when creating a new drug? How long does it take to get a drug to market? Can price be reduced by half by reducing the time it takes by half? Do a lot of people in the process spend their time waiting?

Is drug development in the US far more expensive than elsewhere because the entire healthcare system here is more expensive (vicious cost cycle / positive feedback loop)

Anyways, just tossing some ideas out there because I get the suspicion that pharma R&D is ridiculously archaic.

Then large companies like Bayer acquire the research and spend millions on getting it through FDA process.

I know advancements are being made in automation for various research activities and I'm sure there will continue being a lot of advancements there. (The need for automation is fully recognized at the industry level)

Add to the fact that science progresses; we now know more about the human body and generally everything compared to 20 years ago, so more stringent rules and testing are required.

Classic example: before thalidomide, nobody cares about how drugs work in pregnant women. Now all drugs have pregnancy category (how safe it is to be used by pregnant women) approved by FDA, and figuring out this pregnancy category comes with a cost.

No it's not. Example:

1980: Drug A is invented to treat illness X, proves to be the most effective

1990: Drug B is invented for illness X, effectiveness is tested against Drug A

2000: Drug C is invented for illness X, effectiveness is tested against Drug B

2010: Drug D is invented for illness X, effectiveness is tested against Drug C

In other words, always compare effectiveness to the current few best treatments. Nothing spirals, nothing becomes harder to prove.

(EDIT: this assumes that drug A works "satisfactorily". Drug D still have a chance if it has markedly differentiating features, say if drug A is injected while drug D is taken orally.)

(as a side note, cancer drugs are hot because of precisely opposite of these -- most are fairly new, those that are old are not exactly pleasant to take, there is no "silver bullet" found yet so there are lots of room for improvement.)

Another take on the market saturation is that when the current therapy is simply already good enough, ie. the "silver bullet" has been discovered. That's the reason why there has been no new drugs developed for headache in recent few years (or pain management drugs in general). It's a totally different story when, say, aspirin was first introduced: there is a lot more room to improve on / differentiate from its side effect profile, pharmacological properties, etc.

http://www.wired.com/medtech/drugs/magazine/17-09/ff_placebo...

http://www.wired.com/wiredscience/2011/10/cannabinoids-place...

i.e. if they see they got better on the placebo they won't care when they find out - they have clear evidence that it does work.

Tell you what. When these companies stop being the most profitable in America, or even just when their EPS starts declining, I'll believe you.

What are they going to do then? The only thing they really can, slash costs. It seems unlikely the all the slashing is going to come out of everything except R&D.

We're ultimately going to have to deal with the fact that as a society we've chosen to make it extremely expensive to bring new drugs to market. Basically, our extremely high standards are/were sustainable only because we also gave them patent protection. It is going to be economically infeasible to have both extremely high standards for new drugs, then refuse to protect them for long enough to recoup their costs. There is no law of economics that says a thing must be produced; raise the cost above what can be recovered and what happens is that it won't be produced.

[1]: http://biz.yahoo.com/p/sum_qpmd.html

(And don't even think of trying to sell me on it being a net money saver. It won't be after the special interest groups are done with it.)

I'd suggest it's much cheaper to look into how we could reduce the regulations making it so expensive, rather than throw government money at a problem of the government's creation. At the point where we are seriously talking about the entire edifice collapsing one must take seriously the question whether the costs of our regulatory regime have managed to exceed the benefits. Right now we have a terribly irrational balance between those who are hurt taking insufficiently vetted drugs vs. those who are hurt by not having drugs available for years that turn out safe. The former are visible and the latter invisible, but they are still real. A classic recipe for irrationality.

That part's pretty easy. Reduce the guarantees we require demonstrating the safety and effectiveness of new drugs.

We also took in hundreds of billions less than we would have if not for the avoidable economic implosion and earlier ill-advised tax cuts.

It seems to me that this is a large part of the problem and perverts the incentives in the industry not to produce what people need but what they can sell.

There has got to be a more efficient way for doctors to discover what drugs are useful to the patients they treat.

Heck, look at the tech startup industry. Very few if any of us learn about new startups from traveling salespeople. We learn about them from websites like Hacker News, TechCrunch, TechMeme, etc.

Do we have doctor bloggers that make an effort to learn about new drugs and discover what is and isn't worthwhile?

I would imagine that the very reliance on salespeople actually makes it harder to bring good, useful drugs to market because the industry generates its own noise for doctors that they themselves need to cut through.

Every pharma salesperson I've ever known has been for all intents and purposes indistinguishable from viagra spam emails in my inbox, except for they have a pulse and "pay" for readership through expensive dinners and other niceties.

The entire drug information dissemination machine is broken.

It's plenty corrupt when you look at the big fishes, just not as much as the pharmatical industry (yet).

The majority of blockbuster drugs are about to go off of patent protection. This is where the majority (if not all) of the profit in the industry comes from, as well as a huge chunk of the rests of their costs.

It's an interesting time in the industry but the patent cliff is real and the industry is going to change quite a bit more in the next few years.

The model is absolutely unsustainable - there isn't enough blockbusters in the pipeline to replace the current, not by a very long shot. And we know what is in in the pipeline because remember it takes 7-11 years to bring a candidate from preclinical through FDA approval, so we have a very good idea of what's coming out (and what's not).

I can't really think of any industry that had their business model collapse that didn't come out of it better than they had been.

Individual players, technologies and processes may disappear, but it's not like demand will, and so long as there is demand, there is a potential market.

But ultimately I agree, we may be in for a rough transitory period as far as drug research goes, but what arises from the ashes will likely be a far leaner and more effective beast. It's not like scientists care who is paying the bills.

If this is the case, I imagine that any disruptions will occur at the C-suite level mostly, paving the way for entirely new ways of looking at the problem of bringing a new drug to market.

Every once in a while an academic research lab will spin off a biotech to develop a new compound, but in general this is not how things have been done in the past. There is a current trend to in-license things from academia to lower the companies' exposure to early R&D risk. This ignores the fact that early research costs pale in comparison to the later clinical trials where most potential drugs go to die. Cancer is particularly bad with something like a 98% failure rate. In-licensing from academia isn't going to buy you much comfort when the thing doesn't work in a phase III clinical trial.