R&D

In the battle over health care that lies ahead, how strongly will the public rally around the need for innovation in confronting health care costs?  Does the public view innovation as relevant to the challenge in the first place?

These aren’t idle questions. The news that growth in overall national health care spending has been moderating has raised speculation that innovations in payment and health care delivery are already paying off, notwithstanding the unquestioned impact of the Great Recession.

Looking ahead, uncertainty over the fate of the Affordable Care Act and the likelihood of federal budget cuts yet to come has many fearing that innovations will be vulnerable. And it is not just federal spending that will be at risk. Hospitals and health plans will all be watching their margins carefully to assess how far and how fast they can keep making investments that support innovation (such as investments in healthcare IT, analytics and care coordination) but that may take months or years to generate a return.

All of which places the role of innovation in controlling costs center stage. After all, this is what undergirds the Triple Aim that so many health care leaders have embraced as the only realistic alternative to arbitrary cutbacks in health care services and spending. Health care leaders can defend innovation if they have public support. But do they?

Continue reading “Innovation is Key to Controlling Health Care Costs”

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The most over-used and under-analyzed statement in the academic vocabulary is surely “more research is needed”.

These four words, occasionally justified when they appear as the last sentence in a Masters dissertation, are as often to be found as the coda for a mega-trial that consumed the lion’s share of a national research budget, or that of a Cochrane review which began with dozens or even hundreds of primary studies and progressively excluded most of them on the grounds that they were “methodologically flawed”.

Yet however large the trial or however comprehensive the review, the answer always seems to lie just around the next empirical corner.

With due respect to all those who have used “more research is needed” to sum up months or years of their own work on a topic, this ultimate academic cliché is usually an indicator that serious scholarly thinking on the topic has ceased. It is almost never the only logical conclusion that can be drawn from a set of negative, ambiguous, incomplete or contradictory data.

Recall the classic cartoon sketch from your childhood. Kitty-cat, who seeks to trap little bird Tweety Pie, tries to fly through the air.  After a pregnant mid-air pause reflecting the cartoon laws of physics, he falls to the ground and lies with eyes askew and stars circling round his silly head, to the evident amusement of his prey. But next frame, we see Kitty-cat launching himself into the air from an even greater height.  “More attempts at flight are needed”, he implicitly concludes.

Continue reading “Less Research Is Needed”

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For the last decade, as the biopharmaceutical industry has struggled — largely unsuccessfully — to live up to its anticipated potential, a litany of experts, analysts, participants, and commentators have offered up their diagnosis and treatment for pharma’s productivity problem.

The basic question they’re all trying to solve: how can it be that despite profound improvements in many aspects of drug discovery, actual productivity – measured by cost per new NME – seems to be declining?

That’s the problem that Jack Scannell (an industry analyst at Bernstein & Co.) and colleagues tackle in the latest issue of NRDD (here – abstract only), expanding upon a nice piece of work they did on this subject last year to now offer an even more comprehensive and thoughtful review of this important subject.  While painfully depressing, the article is worth reading, as it cogently summarizes many years worth of hand-wringing and angst.

Having spent much of the last decade wrestling with many of the same issues (his topics will be familiar to regular readers of this column), I was perhaps most struck by the rather dismal take-away: there isn’t a clear unifying explanation for the R&D productivity problem; perhaps if each company examined its internal failures rigorously, new insight might emerge, but meanwhile, essentially, beatings will continue until morale improves.

More specifically: the payor environment is likely to make reimbursement increasingly difficult; regulators will always have an easier time tightening screws than loosening them; each success raises the bar higher; and the only immediate solution is likely to be continued R&D cuts.

Continue reading “Pharma: Beatings to Continue Until Morale Improves?”

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The congressional legislators who oversee the Food and Drug Administration and control the nation’s coffers have shown again that they neither understand drug development nor the regulatory problems that plague it.

In February, Sen. Barbara A. Mikulski(D-Md.) unveiled a bipartisan bill intended to spur innovation in research and drug development for chronic, costly health conditions such as Alzheimer’s disease, cancer, diabetes and heart disease.

According to the press release, the bill will invest “in public-private partnerships to ensure scientists and researchers are able to develop new safe and effective drugs,” shrink product development timelines, increase the number of drugs in the development pipeline and expedite the FDA review process.

However, there is currently plenty in the development pipeline. The federal government is boosting funding for research and development on Alzheimer’s disease; the Department of Health and Human Services alone will allot more than $500 million to it in fiscal year 2013. Moreover, drug companies spend more than $65 billion annually on R&D.

For example, there are now nearly 100 drugs in development for Alzheimer’s disease, dementias and other cognitive disorders, and almost 900 medicines being tested for cancer.

Continue reading “Wrong Rx for the FDA”

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It’s easy to muster a cynical response to Tuesday’s announcement that the world’s largest health products company, J&J, is replacing their current CEO William Weldon (athletic white male and former sales rep who rose through the commercial organization) with Alex Gorsky (athletic white male and former sales rep who rose through the commercial organization).  After all, he will be in good company, joining Novartis’s Joe Jimenez (athletic white male – see here — with a background in marketing) and AZ’s David Brennan (athletic while male and former sales rep), among others.  Indeed, of the major pharma companies, only Lilly’s John Lechleiter is a scientist (no word on whether he’s athletic; I’m told by Stephen Colbert that he is white).

Even the world of biotechs have fewer medical scientist leaders than you might think (and more white male athletes); true, Gilead, Vertex, and Seattle Genetics are led by scientists, as was Genentech prior to its acquisition by Roche.  Yet, many other distinguished large biotechs don’t have medical scientists at the helm – consider Amgen (Kevin Sharer, and his designated successor, Robert Bradway); Celgene (Robert Hugin), Biomarin (Jean-Jacques Bienaime), and Genzyme, prior to their acquisition (Henri Termeer), to name a few.  As detailed by Monica Higgins in “Career Imprints,” the development of the biotechnology industry owes much to “the Baxter Boys” – a group of mid-level Baxter-trained managers like Termeer who went off in search of new challenges.

As the pharmaceutical industry seems headed along the lines anticipated in 2010 by Morgan Stanley analyst Andrew Baum (now at Citi) and gradually moves from a “research and development” model towards a “search and development” model, it’s easy to attribute this change to senior leadership teams that never fundamentally understood research, and lacked appreciation for its unique challenges and culture.  In simple terms, it’s easy to see why someone more comfortable with the more traditional business processes of making and selling things would look for reasons to remove discovery — the most uncertain and difficult to manage part of the enterprise (even if it’s where, however inconveniently, value is initially created).

Continue reading “Can We Really Expect Innovation from an Industry Stuck on White Male Former Sales Reps? Perhaps.”

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