Big Pharma's Lack of Risk-Taking Hurts Medical Innovation
CREDIT: Rhoda Baer/National Cancer Institute
Failure to find new drugs has the pharmaceutical industry scrambling for fresh sources of biomedical discoveries and breakthroughs. But a former insider at Eli Lilly says that companies need to abandon their "broken innovation model," and return to their roots as a fearless industry which took risks to discover new medical therapies.
An overriding fear of risk has crippled pharmaceutical innovation in the past few decades, says Bernard Munos, founder of the InnoThink Center for Research in Biomedical Innovation in Indianapolis. Such fear has led the industry to rely upon squeezing more out of known classes of blockbuster drugs, while abandoning the uncertainty of more speculative, but highly promising, drug.
Munos recently laid out the challenges, and possible solutions, in paper he coauthored for the journal Science Translational Medicine. He talked with InnovationNewsDaily about how pharmaceutical giants can take a lesson from smaller biotech companies and their own past to kick start a new era of biomedical innovation.
InnovationNewsDaily: How innovative has the biomedical community been in the past decades? Is it doing better or worse now?
Bernard Munos: Up until about 20 years ago, the biomedical community did a great job of coming up with breakthrough discoveries and translating them into commercial products. The paper provides many examples. The translational research that was carried out by the pharmaceutical industry was frequently quite disruptive of established practices and standards of care (which is what you would expect of breakthroughs). It also entailed enormous risks because there are many unknowns in novel science, and many new ways to fail. The companies which mastered the challenge were richly rewarded, while the others disappeared.
About 15-20 years ago, many non-scientist leaders in the industry, including CEOs, CFOs, and leaders of commercial divisions grew increasingly uncomfortable with the risk and unpredictability inherent to drug R&D. They imported and adopted what turned out to be inadequate tools to manage risk and reduce uncertainty. The result was to transform drug R&D from a creativity-led enterprise to a process-led endeavor.
The impact on innovation has been severe: new drug approvals have steadily declined; 22 of the 25 most prescribed drugs are now generic; 78 percent of prescriptions were filled by generics in 2010 (up from 46% in 2001); and since 2004, small companies have consistently outperformed big ones in the number of new drugs approved, despite much lower R&D spending.
InnovationNewsDaily: Many experts have pointed to a drop-off in the discovery of new drug candidates despite efforts to pursue such candidates. Is that a problem that can be fully fixed by a change in attitude toward accepting risk, or by spending more money?
Munos: There is no shortage of breakthrough science. Consider for instance synthetic biology, tissue engineering , nanotechnology, stem cells, and the many novels ways to harness the immune system. Steve Burrill [President and CEO of Burrill & Co.] reckons there are over 4000 'biotech' companies, many of which are exploring novel avenues to treat diseases.
However, the financial criteria by which new drug candidates are assessed make it very difficult for the products of this new science to compete against 'safe' projects such as new indications and line extensions for existing molecules. Product managers can always 'demonstrate' that an additional claim for an existing blockbuster will yield more certain returns than a similar investment into a speculative breakthrough. This is why a drug such as Seroquel is supported by 72 phase III trials (FDA only requires 2) and 39 phase IV trials. This adds up to an enormous amount of money that was diverted from funding research into potential breakthroughs. (By the way, Seroquel is not a unique situation.)
The industry must also reconsider its HR management practices. Innovative scientists, by definition, have ideas that are frequently at crosscurrent from the mainstream. If drug companies want breakthroughs, they must encourage and protect non-conventional thinking, instead of frequently labeling these employees as 'mavericks' who don't fit in and should be eliminated. The process culture that was foisted upon R&D divisions in the last 10-15 years has taken a severe toll.
CMR International has just published data showing that in 2010, the number of drugs entering phase I, phase II, and phase III were respectively 47 percent, 53 percent, and 55 percent lower than in 2008. Yet, as dire as these figures may be, this is an industry that knows how to do discover and develop breakthrough therapies. It has done it for most of the last century. It can do it again, but it must discard the current broken innovation model and return to one in which scientists are once again free to pursue unfettered science.
InnovationNewsDaily: If risk is a part of innovation, how would you encourage such risk-taking? Do people simply have to accept that they will gamble away X number of dollars?
Munos: This is not a trivial problem since (1) risk mitigation is the most significant factor that drives company survival; (2) there has been until now no good model to mitigate risk in industries dominated by 'black-swan' events (such as blockbusters). There is interesting research in this area. The gist of it is to shift a significant share of R&D spending from expensive late clinical trials of marginally innovative compounds, to high-risk, unconventional discovery research carried out by academic scientists and the many small 'biotech' companies mentioned above.
We know from research that high-risk, unconventional research has produced nearly all the biomedical breakthroughs of the 20th century. This is what [our] paper calls good risk, which must be embraced. In contrast, we must curtail the bad risk involved in pursuing expensive clinical research of marginal compounds. In other words, we must return the industry to a proven, evidence-based innovation model.