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Drug Development Needs Private Industry

Benjamin Zycher, Ph.D.
Wall Street Journal
June 28, 2008

The pharmaceutical industry is a popular villain these days, thanks in part to the premise that drug companies are concerned more with profits than drug safety. Now there's another criticism increasingly being heard: that most drug innovation comes from publicly funded research, such as that sponsored by the National Institutes of Health.

"The pharmaceutical industry likes to depict itself as a research-based industry, as the source of innovative drugs," says Dr. Marcia Angell, author of "The Truth About the Drug Companies." "Nothing could be further from the truth," she claims. "Innovation comes mainly from NIH-supported research in academic medical centers. The drug companies do almost no innovation now."

Dr. Angell is wrong. The private-sector contribution to pharmaceutical science is immense and indispensable. Joseph A. DiMasi and Christopher-Paul Milne (both of Tufts University) and I examined the development histories of 35 drugs and drug classes identified in the scholarly literature as important or that were among the most prescribed in 2007. Our study found that both NIH-sponsored and private-sector pharmaceutical research are crucial.

Consider Epogen, a breakthrough drug to treat anemia. Epogen is an artificial form of a hormone called erythropoietin that stimulates the production of red blood cells. Identified in the 1950s, its clinical potential was noted in 1976 by a researcher at the University of Chicago. According to current mythology, the private sector took these discoveries, produced erythropoietin on a large scale, and then reaped huge profits all without contributing any scientific advances of its own.

In fact, as the medical literature makes clear, using erythropoietin to treat patients with renal failure remained impossible even in the mid-1980s: There was no source from which sufficient quantities of the hormone could be obtained. But crucial scientific work continued in the private sector. Amgen, a prominent pharmaceutical firm building upon research from both industry and academia, identified the erythropoietin gene and developed a DNA engineering process with which to produce human erythropoietin in hamster cells. Once the crucial scientific and production issues were resolved, clinical trials became feasible. The drug was approved in Europe and the U.S., yielding immense medical benefits for patients.

Beta blockers such as Inderal (propranolol) and Toprol (metroprolol), which treat angina, hypertension and related conditions, are another example. After a major advance in the science of cell biology at the University of Georgia in the 1940s, many years of work followed in the private sector, in particular at Imperial Chemical Industries (subsequently part of AstraZeneca). This work, led by James W. Black (who shared the Nobel Prize in Physiology or Medicine in 1988 with two others), was directed at developing the earliest beta blockers and investigating their pharmacological and toxicological effects. Beginning in the mid-1960s, the pharmaceutical industry developed improved beta blockers with a broad range of therapeutic advantages.

Modern antidepressant drugs such as Prozac (fluoxetine) are yet another example. The antidepressants developed in the 1950s and 1960s by pharmaceutical firms (e.g., Hoffman-Laroche and J.R. Geigy Ltd.) had significant adverse side effects, inducing a search for improved alternatives. Private-sector research, combined with work on the science of brain chemistry by Julius Axelrod at the National Institutes of Health (for which Axelrod won the Nobel Prize in Physiology or Medicine in 1970), led to the development of a series of newer drugs and drug classes with greater effectiveness and improved safety.

Research conducted or sponsored by the NIH tends to be concentrated in the basic science of disease biology, biochemistry and disease processes. A major goal of that work is to identify biologic targets that might prove vulnerable to "attack" by drugs yet to be developed. Private-sector research is weighted heavily toward applied science: discovering ways to exploit the findings of basic science in pursuit of treatments and cures.

NIH and private-sector research efforts are thus complementary. Among our 35 drugs and drug classes, our study found that private-sector research was responsible for central advances in basic science for seven; in applied science for 34; and in the development of drugs yielding improved clinical applications and/or manufacturing protocols for 28. All or almost all of the drugs and drug classes would not have been developed or their development would have been delayed significantly in the absence of the scientific or technical contributions of pharmaceutical firms.

The economic benefits of investments in pharmaceutical science are considerable. But some current policy proposals such as federal negotiation of drug prices, and the importation of medicines subject to price controls overseas would diminish private investment. Because public and private investments in pharmaceutical research are strongly complementary, a reduction in private research and development would erode, perhaps sharply, the economic benefits of NIH research efforts as well. That is something that the critics of Big Pharma might want to consider.

Mr. Zycher is a senior fellow at the Manhattan Institute for Policy Research. This op-ed was adapted from "The Truth About Drug Innovation," released earlier this week by the institute.
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