How Drug Companies Keep Medicine Out of Reach

The battle for the idea has peaked at a time when the pharmaceutical industry finds itself under extraordinary duress. Despite significant advances in drug development technology, the number of new drugs per billion dollars spent on R&D has halved every decade since 1950. And the industry, over the course of the current decade, is watching many of its most profitable drugs come off of patent. In November 2011, Pfizer lost exclusivity on the most lucrative drug ever made, Lipitor. The statin grossed more than $130 billion for the company. The patent on GlaxSmithKline's Advair also went dry in 2011. The drug made $7.8 billion in 2009 alone. Eli Lilly, which has been hit hardest by the patent cliff, lost its patent on Zyprexa in 2011. The antipsychotic made them close to $5 billion per year. The firm is projected to lose half of its total sales across the decade.

"We're public companies, and sometimes the CEOs are kind of stuck," said Derek Lowe, a chemist who has worked in the industry since 1989. "Every one of our drugs is a wasting asset, they're all wasting away in front of you." Lowe also runs a blog about the industry, called In the Pipeline. The site manages to couple reverence for the complexity of drug development with sharp critiques of the industry. Last year, for instance, when it became clear that the industry's largest players had put unprecedented sums into buybacks of their own stock in 2011 -- a total of $76 billion across the largest 15 companies, which is $14 billion more than the entire NIH budget -- Lowe wrote a long post. "It gets me because companies are in effect saying, 'you know what? We are better off spending this money to make the shareholders happy than spending it doing what we are allegedly supposed to be doing, which is discovering drugs,'" Lowe said.

AP05051602420.jpgBill Gates at the 2005 World Health Assembly [Anja Niedringhaus/AP]

I asked Lowe about the state of the industry. "It's tough right now because the drug industry is at this adolescent stage, we're at that awkward stage. We've gone through a lot of the easy targets, and there's a lot of real big opportunities out there, but the reason they're big opportunities is because nobody's been able to do anything with them," Lowe said. "We keep spending tons of money on these things and missing."

Jack Scannell is one of the people trying to usher in a new era of drug discovery. "In very broad terms, I'm pretty pessimistic about the industry," Scannell said. "I don't think at a sort of aggregate, macro level classical R&D as it's been done for the last forty or fifty years has a particularly bright future." Scannell is British, and dropped out of medical school in favor of a PhD in computational neuroscience from Newcastle University. He met Malcolm Young there, and the pair worked a together on systems for analyzing networks, specifically for mapping neuronal activity.

Scannell worked as a consultant in the drug industry and then as an equity analyst, but quit last year to team up with Young once more at small biotech firm Scannell described as "heretical." The company is called e-Therapeutics, and its approaching drug design via the pair's background in networks. "Go back to how the drug industry says it discovers drugs. It looks for individual targets and then it optimizes drugs for high affinity binding on that target," Scannell said. The strategy, to Scannell's and Young's eyes, fails to take into account the complexity of biological systems.

"If you look at the structure of protein-protein interaction networks in cells, or the metabolic networks, these have been designed by evolution to be robust. You've got feedback loops, you've got parallel pathways, you've got redundancies. And what that says is, if you start your search process looking for an individual molecular component you want to perturb to influence a disease, probably evolution has designed your cell that, if you perturb that component, nothing is going to happen." Given the approach, Scannell said, "Maybe it shouldn't be surprising that 95 percent of drugs going into clinical trials fail."

"Historically, you can make a very strong case that the way drugs were discovered when it was cheap and easy -- you can't do all this now because of the regulators, but some of this you might be able to do -- was essentially through broad phenotypic screening, very often in man," Scannell said. "Drugs were regarded as potential tools that might do something useful, and then people essentially searched for uses for the tool. And today we do the exact opposite. Which is we say, we want something that cures Alzheimer's disease, let's design something that cures Alzheimer's disease, and frankly that just doesn't work."

I asked Derek Lowe, the chemist and blogger, for his thoughts on the principle of delinking R&D from the actual manufacture of drugs, and why he thought the industry, facing such a daunting outlook, would reject an idea that could turn fallow fields of research on neglected diseases into profitable ones. "I really think it could be viable," he said. "I would like to see it given a real trial, and neglected diseases might be the place to do it. As it is, we really already kind of have a prize model in the developed countries, market exclusivity. But, at the same time, you could look at it and it will say, 'You will only make this amount of money and not one penny more by curing this tropical disease.' Their fear probably is that if that model works great, then we'll move on to all the other diseases."

***

In January, at the final WHO meeting before the World Health Assembly in late May, a number of countries began agitating over the circumstances of the November meeting. China, in particularly, argued loudly for the democratic ideals of the WHO, and every state's right to be heard. The meeting grew so contentious that the Director-General, Margaret Chan, began to sing "Getting to Know You," from the musical The King and I to try to calm the negotiators.

The tactic failed, and Nils Daulaire made it clear that the U.S. would kill what remained of the idea if any country moved to reopen negotiations at the World Health Assembly.

The meeting grew so contentious that the Director-General, Margaret Chan, began to sing "Getting to Know You" to try to calm the negotiators.

I spoke with Daulaire in February, and asked him to clarify the U.S. position. "I'm not sure that I understand that the treaty is the sole way or the preferred way to get to the aim that we have, which is to make more products available at affordable or no cost to the people who need it most," Daulaire said. "I think the idea of the treaty is ill-considered, and is not going to lead us in the direction we want to go."

Daulaire argued that the process of drafting a treaty is long and expensive, and that it would be better to model something on the Global Fund to Fight AIDS, Tuberculosis and Malaria or the GAVI alliance. "If we had started that process [of designing GAVI ] in 2000 by proposing that we would have a binding international treaty with required contributions, etc. we would still be negotiating the terms of that treaty," Daulaire said. "I just consider the amount of time we're spending debating what is essentially a dead idea to be not very well spent. It's simply a dumb idea."

Ideas, though, are powerful things, and last September, as it became clear that the developing world planned to fight for the treaty at the November meeting, Daulaire's office put out a quiet call for competing ideas. The request came via email from the Institute of Medicine, a wing of the National Academy of Science. The message was leaked to the blog Don't Trade Our Lives Away .

"HHS was hoping that an independent body such as IOM could suggest alternative ideas for consideration at the WHO," the email reads. "Given that these ideas need to be developed before the WHO Executive Board meeting in January, there is insufficient time (and insufficient money) to employ the usual IOM consensus committee study process." It concludes, "The IOM is committed to being of service to the country and this is one of the times when we can pull together and make a special contribution."

Daulaire arrived at the November meeting in Geneva without a competing idea to put forward.

Daulaire's other suggestion has been criticized. "You cannot think that the R&D mess that we are currently in is going to be solved with the GAVI model," Judit Rius of MSF said. "GAVI is basically about taking vaccines that have been produced by Pfizer, GSK, and by other northern pharmaceutical companies, and giving those companies huge subsidies so that they will give time-limited price discounts and accelerate delivery to the developing world."

This R&D void was also acknowledged by John-Arne Røttingen, the Norwegian doctor who led the second expert working group for the WHO, known as the Consultative Expert Working Group (CEWG). The report of a first expert group was thrown out for issues of political malfeasance -- it became clear that proposals from developing countries were excluded from consideration, and that experts met with pharmaceutical industry representatives but not civil society members.

I spoke with Røttingen by phone, and asked if he thought the ideas within the R&D treaty could be implemented through some kind of global partnership. "To actually get agreement on something like this with wide member state involvement, you need some sort of platform to negotiate," he said, implying a treaty negotiation would provide such a forum. "GAVI and the Global Fund are first and foremost mechanisms for procurement for commodities that already exist. The R&D landscape is completely different. In addition to agreeing on financing and doing collective action here, you also need to agree on some principles and norms on how to structure the R&D system. That's a lot more complicated than just buying commodities in a market."

I first learned about the R&D treaty in December, in a speech Røttingen gave at conference at Mt. Sinai Medical School, in New York. In his talk, he specifically called on the Gates Foundation to take a position on the matter. The Foundation is the one of the WHO's largest funders, and its second largest funder of researcher for neglected diseases -- only the U.S. government contributes more each year.

"The Gates Foundation has unfortunately been very absent in the process," Røttingen said when we spoke. "They have not been willing to engage I would say, and have not come forward with any constructive ideas on how they could be a part of a more concerted action. They seem to be satisfied with the status quo where governments are in general not contributing their fair share to this area of R&D."

Their absence has been noted by others. "I think it's very interesting that Gates is not commentating on this," one longtime observer said. "He has been asked about it, and he either claims to not to know anything about it or says, 'Oh that might be interesting, we have to look into it.' But they are singularly failing to publicly engage in this despite Gates acknowledging the lack of funding. And I think that's a sign in itself."

The Foundation did not respond to multiple requests for comment for this piece.

I spoke with Jamie Love again in March as the WHA meeting approached. He was in Geneva once more, this time working to expand copyright exceptions for products that benefit the blind. I asked him for his thoughts on whether the idea could be brought to life through some agreement other than a treaty.

"You can argue about whether or not it should be through treaty or some other legal instrument, but that's a separate issue of whether the commitments should have a binding nature," Love said. "And if you look at what takes place at GAVI or these other PDPs or the Global fund, they've struggled to keep their funding levels up." He added by email: "It depends a lot on what you think you are doing -- creating a global system of finance, or just passing the hat for some odd donations."

I also asked Love about Gates's role in the process.

"Frankly, it's our perception that they're really, in their own channels, in opposition to it," Love said. "We'd like to be able to work with them once in a while, not always be the on the other side of the street," he added. "Nobody's really eager to make enemies of the biggest philanthropist there ever was, right? But we've kind of done it I guess, because you know sometimes you just gotta do what you gotta do. You can't ignore some issues, so we step up, which we often do when other people are looking for cover."

Love and others point to Gates's complicated history with Microsoft and his departure from Harvard as an undergraduate as coloring his view on the need for strong intellectual property law.

"He slowly, as Foundation and as a philanthropist, is being drawn into more open-source policies," Love said. "If you look at the licensing he does on his own government-funded research, he has experienced a little bit of frustration when he doesn't get sufficient openness in the research he's funded himself, so he's begin to put things that much very much like open-source provisions in his own licenses," Love said. "That has been progress, and people have noticed that. It used to be that if you applied to the program to fund libraries -- I know somebody that did this -- she was told you had to eliminate the words 'open-source' because they couldn't fund anything that had even the words."

In the current debate, documents submitted to WHO working groups attacking the idea were largely authored by individuals and groups that receive support from Gates.

The Gates Foundation was also the largest funder of Nils Dualaire's Global Health Council. They donated more than $30 million.

On May 19th, Jamie Love will again fly to Geneva, this time for the 66th World Health Assembly. It remains unclear whether the developing world states will challenge Nils Daulaire and his promise to kill what remains of the R&D treaty.

Presented by

Brian Till is a Research Fellow with the American Strategy Program of the New America Foundation in Washington, D.C., and the author of Conversations With Power. More

Brian Till is a Research Fellow with the American Strategy Program at the New America Foundation in Washington, D.C. He writes on foreign policy, the strengths and shortcomings of the millennial generation, and the perils of the digital age. Previously a nationally syndicated columnist, he is the author of a book of interviews with former global leaders, including Mikhail Gorbachev, Fernando Henrique Cardosso, Bill Clinton, F.W. de Klerk, and Pervez Musharraf: Conversations With Power.

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