Can We Afford The Cures Biopharmaceutical Companies Seem Capable Of? Part 4 of 4

By Rob Wright, Chief Editor, Life Science Leader
Follow Me On Twitter @RfwrightLSL

Can Biopharma Jump The S Curve Part 4 of 4

If a company could develop a drug that would wake someone up from the dead and that person would be perfectly healthy, how much would it cost, and how much would you be willing to pay? This was a topic of discussion among several biopharmaceutical R&D heads debating the dilemma of developing drugs to meet unmet medical needs in a politically charged environment that only seems to be focused on how much something costs, not how well it cures. I had the rare privilege to sit in on the conversation, which I recorded toward the development of this four part article. As the conversation was quite frank, it was decided to produce the article in an anonymous fashion. However, the conversation and comments are real. In part 1 for example, these executives discuss what has changed in biopharma R&D, and look at some of the lessons learned from Gilead’s Sovaldi price point. In part 2 we dug into some of the hurdles the biopharmaceutical industry is facing, and looked at some of the rather inequitable differences that exist between patents that protect drugs that save lives, and lengthy copyright protections for cartoons. Part 3 of the conversation explored whether or not governments should play a greater role in pricing regulations, and evaluated the challenges presented in being able to create a product people can access. We conclude our R&D head discussion by asking if biopharmaceutical R&D can be disrupted that it doesn’t just follow the S curve, but perhaps can jump it to radically change how new therapies are brought to market.

Can We Disrupt The Biopharma R&D Process So That We Can Just Jump The S Curve?

“I think we’re doing better than we have been with certain types of early kills due to toxicology or safety,” says one head of R&D. “The biggest challenge before us is early kills due to lack of differentiation. Many of the products being approved are not making a profit. This is because they are not different from the competition, and as a result, end up being priced relative to the competition, and often end up late to the market and not used. Bring differentiated products to market is tricky, because when you’re making these decisions you’re not looking at the current market, but a future market, and trying to determine how you will be different when you launch in a few years. You need to guess where the field is going to be and guess what your profile is going to be like. But I think the answer is that, if you fill up your early development portfolio – and that’s where I think people are going, bringing ideas early, before the bidding war has driven them to the point of being non profitable. Then, potentially, you have the luxury to kill not just the failures, but the ones that are not likely to be successful. But that is also tricky, because the team believes there’s going to be a drug that looks just like a drug that’s already there. How do you stop developing those “me-too” drugs before you dump tens or hundreds of millions of dollars into their development?”

“One of the dangers that people fall into is dealing with the question of is this going to be “better than” without having any definition of what does “better than” mean,” adds an R&D peer. “On the payer side they don’t define actually what better means (e.g., 5 or 10 percent better than what we paid for). I think we don’t do that inside enough and say how much better does this need to be than what is already out there to be something we’re going to take forward. We live on a hope sometimes of just being better, and then you end up living in a disappointing space of it being so little better that it’s on the fringe.”

“Well, when you make the choice it has to be a lot better, because by the time you launch, your drug’s not going to be as good as you thought it was going to be, and the competition’s going to be better than it used to be,” another R&D exec chimes in.

“Being very rigorous about that is the key to the early kill, because if the whole thing doesn’t get better it gets worse,” shares a different R&D head. “Being significant better can massively reduce costs, and you can pick that up much more quickly. Personally, I think there’s far too much that goes on where people are striving to show differentiation, even from an early stage, rather than defining to what degree something needs to be superior.”

“I agree with that,” says a different head of R&D. “If you have rigorous target product profiles and you actually don’t allow yourself to dilute it, if you don’t hit the target profile, you kill and move on.”

“With all due respect, the Big Pharma R&D model simply doesn’t work,” says one R&D head with finality. “It’s gotten so outsized where the smartest people in these companies are working at such a high level that they are disconnected from what everybody’s doing. They’re acting as if they are portfolio managers and not heads of R&D. How does it make sense to have the greatest brains in these companies not to be truly involved in the innovation and discovery process? People think Google is so innovative, but they are in the same boat. In the early days, they were just a couple of guys being smart and innovative. Not so anymore. The heads of R&D need to actually be in the labs and looking at everybody’s data. We need to be making decisions not based on some differentiation factor, but on the science and the innovation. Real research organizations don’t have to set up outside innovation centers to be innovative.”

One of the great limiting factors that we’re dealing with, honestly, is we aren’t smart enough,” says a different head of R&D. “We don’t know enough about human disease biology. Sure we have made a lot of progress in biology, but I can tell you, anybody who claims wisdom and knowledge just doesn’t know what they’re talking about. The complexity of biology is such that we do not have the tools. I wish we could say that our target was genetically validated. I think we are way away from a predictive system. But when you compare it to other industries or companies, such as tech or Google, you have to realize that these are man-made systems. Our biology is evolutionary, and made over three and a half billion years. I don’t think we know 10 percent of what we need to know. Someone from the Gates Foundation once asked me when will we see the day when biopharma comes up with a vaccine for every virus? I replied, “Well, probably the same when day you guys figure out how to fix the virus in my Microsoft software, and those viruses are all man-made.”