Pharmaceutical R&D Productivity: The Path to
Innovation examines the convergence of scientific,
regulatory, social, political, and economic factors that
are inhibiting the development of new molecular entities
(NMEs), resulting in the current discovery deficit that threatens
the pharmaceutical industry and the delivery of healthcare
as we know it.
Based on more than 20 probing interviews with key industry
executives, this report takes a refreshing look at the core problems
plaguing the pharmaceutical industry and offers potential solutions
toward securing the future of innovative drug discovery and development.
Analysis points include the following:
Integrating new technologies into the R&D, marketing,
and reimbursement stages has proven to be extremely difficult. The
introduction of so many new technologies during the 1990s has
diverted attention and valuable resources from the traditional
methods of developing new pharmaceuticals. The report points
out that there will be a necessary lag between the integration
of new research techniques like combinatorial chemistry and
genomics and the resulting spike in productivity. The impacts
of 3 major R&D enabling technologies are assessed, and
the issues associated with successfully translating new technologies
into validated, profitable, and accepted medicines are evaluated.
The world pharmaceutical industry has taken a wrong
turn in its choice of management techniques with the result
that creativity has been inhibited. The report looks
at changes in the management structures of large pharmaceutical
companies and identifies some of the mistakes made by industry
management in the past. Several organizational and functional
management models are evaluated.
The frenzy of mergers and acquisitions (M&As) in
the late 1980s and early 1990s led to severe diseconomies of
scale in the industry. The M&As led to such upheaval
in the personal and professional lives of R&D scientists
that morale has suffered. The report examines the culture and
typology of R&D scientists, the academic versus the applied
science mindset, the mechanisms of scientific creativity, and
the kinds of incentives and organizational structures that
motivate scientists to do their best work.
Innovation as measured by NME output has dropped in
Europe and Japan . The report identifies increasing
regulation, low profitability, the growth of antiscience attitudes
in Europe , and the economic downturn in Japan as contributing
factors in the global decline in R&D productivity. It also
analyzes trends in patent applications and explains why variability
in the enforcement of world patent agreements has affected
the pharmaceutical industry’s willingness to innovate.
The report also examines the U.S. Regulatory situation,
outlining the role and development of the FDA in particular,
as well as the safety-related problems that struck the pharmaceutical
industry and the FDA in 2004 and the spring of 2005—an
ongoing development that will likely exert a chastening effect
on new product development. Finally, drug prices worldwide
have been subject to consistent downward pressure, reducing
motivation to innovate.
The high cost of bringing an NME to market reinforces
the blockbuster mindset The blockbuster model restricts
the choice of disease targets, ill-serves small-population
chronic diseases, and ignores the economic advantages of personalized
medicine to reduce drug costs, attrition rates, adverse drug
reactions, and patient noncompliance. The report also offers
a critique of the Tufts and Bain models of R&D costs.
Pharmaceutical R&D Productivity: The Path To
Innovation provides case studies of how these
and other productivity issues have played out at major global
pharmas, especially focusing on GlaxoSmithKline and Sanofi-Aventis.
It concludes with four possible scenarios for the future.
About the Authors
Bryan Reuben is professor emeritus
of chemical technology at London South Bank University. He obtained
his M.A., M.Sc., and D.Phil. degrees from Queen’s College,
Oxford , and held a postdoctoral Fellowship at Brookhaven National
Laboratory. He has worked with the consultancies REMIT Ltd.,
the Economists Advisory Group, and Decision Resources, and has
published numerous books with Michael Burstall and Harold Wittcoff
pertaining to the technology and economics of the chemical and
pharmaceutical industries. In addition, he remains a mainstream
scientist who has engaged in recent work on the separation of
the antibiotic nisin from fermentation broth and the structure
of protonated amino acid clusters.
Tragically, Michael Burstall died during the early stages of
this project, but his influence permeates it. Mike was educated
at Brasenose College , Oxford , and worked with Proctor & Gamble
both in England and the United States . He lectured for many
years at the University of Surrey and worked with several consultancies:
the Economists Advisory Group, REMIT, and Decision Resources.
He is sadly missed, both as colleague and friend.