Getting the drugs we need

A drug company executive and university professor tackle the cost, safety and future of pharmaceuticals

Bill Snyder
Published: July, 2005

Steven M. Paul, M.D., president of Lilly Research Laboratories, and long-time Vanderbilt pharmacologist Alastair J.J. Wood, M.B., Ch.B., trade opinions about the challenges facing the nation’s pharmaceutical industry. Their points of agreement—and disagreement—may surprise you.

Wood, a former candidate for FDA commissioner, is a managing director of Symphony Capital LLC, a biopharmaceutical investment firm in New York City. Paul is former scientific director and chief of the clinical neuroscience branch at the National Institute of Mental Health. They were interviewed by Lens editor Bill Snyder in 2005.

There is concern that fewer novel drugs appear to be coming to market. What’s causing this, and what can be done to solve the problem?

Photo Courtesy of Steven Paul, M.D.
PAUL—(For) virtually every disease or cluster of diseases that we are working on right now, the science is incredibly rich. The number of novel, potentially disease-modifying drug targets that have been discovered as a result of the revolutionary advances in biomedical research over the past two decades is truly remarkable.

(But) if you look at the costs to discover and develop a new drug, from the inception of a discovery project to its launch into the marketplace, we now believe that the number as of 2005 is well over $1 billion. It’s been rising almost exponentially over the last 20 years ...

The cost of discovering and developing a new medicine, of course, includes all of the compounds that never make it through the various phases of discovery and development—indeed the attrition rate for drug discovery and development has actually increased somewhat over the past few years despite the incredible science we have at our disposal.

We’ve got on the one hand this enormous scientific and medical opportunity that we must take advantage of, and on the other hand this enormous challenge of cost.

One of my major concerns is that with all of the political and economic issues that the industry is now facing, we could literally “throw the baby out with the bath water.” We might literally need to re-invent a new industry. My worst fear is that the pharmaceutical industry may go the way of the steel industry or the automobile industry or, God forbid, the airline industry.

This would be most unfortunate.

WOOD—Whatever that number is, I don’t think that’s sustainable into the future, at least to develop the kind of high-risk drugs that we need ...

Just to pick Alzheimer’s, we don’t have terrific data on the fundamental biology right now, so developing drugs to prevent Alzheimer’s rather than to treat patients’ symptoms is in some ways a leap in the dark, at least in terms of an investment. If we’re going to make these leaps and we should—God, I hope we do—then we need to develop some means of reducing the risk to the people who make that investment ...

I think we need to fundamentally change the drug approval process ...

PAUL—I disagree with Dr. Wood on this one. I believe that Alzheimer’s disease is a great example of how understanding the fundamental biology of a disease will likely, in my opinion, lead to effective treatments. Over the past decade or so, there have been several genes identified which have been shown to unequivocally cause the disease in certain families or in one case to dramatically increase one’s risk for developing the disease.

By understanding how these genes influence disease pathogenesis, several novel approaches to treatment have emerged. We now have three or four different types of “anti-amyloid” drugs that are in early clinical development—that I believe for the first time gives us a reasonably good chance of modifying the disease process itself…

Unfortunately, most of us believe that the best way to treat Alzheimer’s disease is to prevent it from occurring in the first place (but) the current drug development process—including the current limits on intellectual property protection—provides such incredible disincentives for discovering “preventative” agents that very few companies would even approach this at the present time.

Photo by Dana Johnson
WOOD—We’re talking about Alzheimer’s, but you could talk in the same way about other diseases of aging like osteoarthritis, for example, which is going to be a huge problem for my generation. We need to be prepared to develop drugs that lower amyloid deposition (in the brain) or that slow the deterioration of the loss of your cartilage in your hip joints, without the confidence, other than a hope, that that will affect the ultimate endpoint.

I don’t think at this stage… that we know with any degree of certainty that lowering amyloid deposition pharmacologically in the brains of humans will necessarily prevent Alzheimer’s ... but I think that we need to be prepared to approve drugs based on imaging techniques or whatever… that show a reduction in some surrogates ...

I think we should give limited (patent) exclusivity on the basis of that, and give an extended exclusivity when people demonstrate a hard endpoint… We need to develop regulatory approaches that… encourage the taking of risk. And of course that’s going to have to make some fundamental changes in attitude at the FDA itself.

PAUL—I absolutely agree. The (intellectual property) challenges right now are formidable. The effective patent life for a new drug today is probably averaging only 10 years or so in the U.S.. If it takes 15 years to both discover and develop a drug, five or even 10 years may be too little time to recoup the investments required.

We must be assured that once a drug reaches the market we have a sufficient period of time of patent exclusivity to recoup our investments. Right now with the current patent laws there are also huge incentives for generic companies… to come in and challenge patents in a way that is like winning the lottery…

By the way, I believe that generic drugs are one important way to reduce prescription drug prices in this country. Prescription drug costs in the U.S. could be reduced by 10 to 15 percent overnight if physicians would prescribe generic drugs when they should. But there will be no more generic drugs if there are not patent protected drugs in the first place.

WOOD—I actually think we should also offer extensions of exclusivity on the basis of certain agreed performance goals. For example, if you were developing (the first) statin today… and you demonstrate that it lowers cholesterol, that’s a demonstrable indication for which you would get exclusivity.

But if you come back a few years from now and demonstrate… that you’ve also reduced cardiovascular mortality or morbidity in a significant way, I think that’s not an unreasonable reason to get an extended exclusivity… I’m trying to incentivize the performance of the right studies.

Wouldn’t that also encourage pharmaceutical companies to do more post-marketing surveillance?

WOOD—It could be done in the same way… I think there’s a need for a liability protection for companies where they’re either conducting a mandated phase IV (post-marketing surveillance) study, which most of the time they don’t conduct, of course. But if they’re conducting a safety study, they should get liability protection for that…

There are going to be companies which might even disappear as household names because of just astronomic liability… The numbers are being thrown around of more than $100 billion in terms of the liability risk to Merck (over Vioxx), for example. That’s a lot of money.

PAUL—Let’s not forget that somebody’s got to pay for such product liability litigation—justified or not. Because of the tremendous incentives trial lawyers have in litigating such cases, I think the legal system is in need of tort reform. This is not to say that people don’t have the right to recover damages when they’ve been injured, but in this country right now, I believe this system is out of whack.

WOOD—I think it’s unbelievable that an industry that produces things that cure people of diseases that ail them has managed to shoot themselves so frequently in the foot and get themselves into a position where they’re now in public opinion polls regarded as somewhere down beside tobacco companies…

PAUL—This situation hasn’t escaped most of us, and it’s a problem that we’re trying to quickly correct… For example, I believe industry designs and executes clinical trials as good as anyone in the world… Having said that, we as an industry have been accused—with some justification, in my opinion—of not being as transparent and objective as we should be in presenting and publishing our data. Do we always publish all of the relevant data on a given drug? Do we highlight negative as well as positive results?

Just this past year at Lilly we reiterated a code of conduct called the Principles of Medical Research, which fundamentally says we will publish all data that patients and doctors need to know about our drug, period, including any negative results, and of course all safety data that we gather on our medicines.

To help communicate our clinical data, we’ve established a comprehensive clinical trial registry, which is on our Web site,, so that all data on all marketed products, phase I through phase IV, are going to be on a public accessible database…

How can the government and universities help solve the problem?

WOOD—I don’t think that public money should be committed to the development of drugs. There is a total failure of any evidence that government resources have been successful in developing drugs, at least in my view.

I have some concerns that… NIH… (is) somehow going to get into drug development… (and that) is going to distract us from the fundamental reform of the licensing system in this country to incentivize the development of the drugs that we need.

PAUL—If you back and look at the top 50 marketed drugs,… almost every one of the top 50 had its origins in some research that somewhere in time was funded in the public sector, like the NIH.

However, virtually none of those drugs, with just a few exceptions, would have ever been discovered and made available to patients without enormous investments and risk on the part of the private sector. Not just in the discovery and validation of a target that these drugs work on, but all of the screening, chemistry, pharmacology, toxicology/metabolism, safety testing, etc., let alone downstream development activity and manufacturing capabilities… work that’s required to bring a drug to market, and that most people don’t really know about or appreciate…

It’s the entire body of that research that allows us to do what we do, and without that enormous investment by the NIH and other federal agencies, we wouldn’t have what I have called the incredible substrate for drug discovery and development that we currently have…

We must preserve this synergistic public-private partnership… but we must find ways to improve it further moving forward. I think that NIH resources are best spent in funding all of the fundamental as well as clinical translational research that will allow us to more definitively address the therapeutic and diagnostic approaches we will take in the future.

I really doubt that precious NIH funds are better diverted to discovering or developing drugs, perhaps with some few exceptions… certain orphan diseases or drug to combat bioterrorism, and perhaps some infectious diseases as well.

WOOD—We have a system that incentivizes the development of symptomatic therapies and/or incentivizes the development of therapies for very short treatments: antibiotics… painkillers, and other symptomatic therapies. We’ve moved now into a situation in which we’re developing drugs to prevent diseases. We’re developing drugs to be taken for a lifetime.

And politicians, academics and drug companies have done a very poor job of articulating that for the public… One of the reasons prescription drugs are a much more major part of our health care dollar today is that we don’t just take 10 days of an antibiotic…

We need to explain to people that the ideal model of health care would put surgeons and anesthesiologists out of work, and we would treat diseases by pills. You know, (the doctor) on Star Trek didn’t do much surgery. He waved things at people and people swallowed things and so on… We’re going to have to redesign the model of the ’50s, if you will…

And the reason that’s important, is that whereas in a model where you’re treating symptoms or disease in an individual, you can much more easily understand and articulate the risk/benefit ratio for that patient, when you’re preventing a disease, you never ever know the patient benefited from the drug, ever. But you always know the patient who developed an adverse event.

PAUL: I think it starts with society understanding… what benefit/risk actually means. It’s become clearer to me, given my experience in the industry, but I’m not sure it’s clear to the average citizen.

All drugs have benefits and risks that manifest differently among patients. It is critical that patients and doctors fully understand these risks—and carefully monitor for side effects or the usually rarer serious adverse events that can occur with virtually all drugs.

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