December 06, 2007

The Wall Street Journal led with a front page, above the fold article today on how pharmaceutical companies' pipelines are running dry at the same time that many blockbuster drugs are going off-patent. Translation: Pharma's bottom line is about to take a big hit.

Some of the top-selling drugs in industry history will become history as patent protections expire, allowing generics to rush in at much-lower prices. Generic competition is expected to wipe $67 billion from top companies' annual U.S. sales between 2007 and 2012 as more than three dozen drugs lose patent protection. That is roughly half of the companies' combined 2007 U.S. sales. ...

The coming sales decline may signal the end of a once-revered way of doing business. "I think the industry is doomed if we don't change," says Sidney Taurel, chairman of Eli Lilly & Co. Just yesterday, Bristol-Myers Squibb Co. announced plans to cut 10% of its work force, or about 4,300 jobs, and close or sell about half of its 27 manufacturing plants by 2010.

Who is to blame? Companies for not being nimble enough, or the FDA for ratching up the standards for approving new drugs?

There's probably plenty of blame to go around, but there is something to be be said for the fact that FDA regulations act as both a floor and a ceiling on how quickly the industry can adapt its R&D processes to fit evolving scientific discoveries.

And the FDA - thanks in part to longstanding funding shortfalls and an ever growing work load - is locked into what can only be described as a risk averse and reactive decision making.

Consider this excerpt from the FDA's own report on its scientific shortcomings:

FDA's failure to retain and motivate its workforce puts FDA's mission at risk. Inadequately trained scientists are generally risk-averse, and tend to give no decision, a slow decision or, even worse, the wrong decision on regulatory approval or disapproval. ...

The lack of a trained workforce means that the FDA is ineffective in responding to emerging fields that require individuals and work teams with multidisciplinary skills built on very complex, highly specialized, often esoteric bodies of knowledge.

This aspect of the agency's problems - its inability to keep up with the rapid pace of scientific and technological evolution - undoubtedly impacts what projects companies pursue and what type of products come to market.

Congress recently passed PDUFA IV, which is heavily focused on solving perceived gaps in safety regulation at the FDA; but the FDA's own reflections go much farther and deeper, and point to a persistent "science gap" at the FDA that casts a long shadow over the industry and patient health.

Sadly, this isn't a problem that Congress looks set to address any time in the near future.

Posted by Paul Howard at December 6, 2007 10:18 AM

Comments

Post a comment