Merrill Goozner: Industrial Policy for Big Pharma


I first met Steve Clemons in Japan in the early 1990s when industrial policy was the subject du jour for up-and-coming policy wonks like him and sympathetic journalists like myself. How to resuscitate America’s manufacturing base to compete against the Japanese threat, we wondered. Times change. These days, most Democrats wouldn’t be caught dead uttering the “IP” word while yesterday morning I attended a session in Washington sponsored by the free-market Manhattan Institute that was promoting a government-led industrial policy to replenish the pharmaceutical industry’s new product pipeline, which has slowed to a trickle in recent years. Robert Goldberg, the vice president of the Manhattan Institute’s Center for Medical Progress, referred to his proposal as a “Sematech consortium” for the drug industry.
It gets better. The confab’s keynote speaker was Andrew von Eschenbach, the Texas cancer surgeon and Bush family friend who recently decamped from the National Cancer Institute to run the Food and Drug Administration. One of the panelists was Janet Woodcock, now the chief of operations at FDA after running its Center for Drug Evaluation and Research, which makes her the highest ranking career bureaucrat at the agency. Quite a coup for the free marketers at the Manhattan Institute: Top Bush administration officials showing up to back industrial policy.
What’s up? Despite the billions poured into pharmaceutical industry and government-funded biomedical research in recent years, new product approvals at the FDA dropped to 20 new drugs last year, down from 34 the year before and about half the level of the mid-1990s. Genomics, proteomics, metaboleomics — we know more about how the body works than ever before and we still don’t know how to cure our most intractable medical problems: incurable cancers (most of them); dementia in its multiple forms; neurological disorders like Parkinson’s and Lou Gehrig’s disease; many forms of heart disease.

Moreover, the drug industry blockbuster economic model is clearly dying. To maintain the profits to which they’ve become accustomed, they need to sell their drugs to tens of millions of people. By definition that means a one-size-fits-all approach, often promoted by direct-to-consumer advertising and the thinly disguised bribery known as physician detailing. That approach winds up subjecting millions of people to inappropriate care. If you want to see where that road ends up, track Merck’s stock over the past three years.
The scientists on the cutting edge of drug discovery, whether at government regulatory agencies, in universities or at drug and biotech company labs, understand better than anyone that the old model no longer works. Two years ago, Woodcock authored a report calling for creation of a “critical path” initiative to identify technologies that can help translate the wealth of basic science knowledge generated over the past several decades (the Human Genome Project, the microbiology knowledge generated by the War on Cancer, and more recently the War on Bioterror) into therapeutic products that might actually help someone who is sick.
The scientists brought together by the Manhattan Institute sketched out some of the more intriguing ideas on this critical path. Can we use genetic markers identified in people who suffer the relatively rare side effects of drugs to create diagnostic tests that will enable physicians to pre-screen people before prescribing widely used medicines like statins (to lower cholesterol) or painkillers? When a new cancer drug like Iressa works in only 5 or 10 percent of the patients who have lung cancer, can we generate a test that will identify which patients will actually benefit from the drug by identifying the mutations that are specific to their tumor? You’ve probably heard the phrase “personalized medicine.” It will take some critical thinking about how we test and approve drugs to get there.
To get the ball rolling, the government has created the Critical Path Institute under the leadership of University of Arizona pharmacologist Ray Woosley, who had been touted as a potential FDA chief if Al Gore had won the 2000 election. In the Institute’s first effort at reducing drug industry development costs, it has lined up 12 major pharmaceutical companies in a consortium that will share data on pre-clinical toxicology testing — the kind of information that previously was never shared because it might help competitors by identifying failed pathways you’ve already trod. “We’re essentially like Sematech,” said Jeffrey Cossman, the chief scientirfic officer at the Institute.
The Institute’s efforts are nascent. The FDA has been systematically underfunded by a succession of administrations and now relies on industry user fees for nearly half of its budget. Therefore, it doesn’t have much money to devote to this effort. But it was clear from today’s meeting that the highest levels of the agency are committed to the process. Industrial policy for Big Pharma will have bi-partisan support no matter who wins the next election.
The old industrial policy wonk in me is intrigued by this effort. But I see some real problems down the road. More rapid drug approvals and regulatory approval of tests based on genetic markers will hinge on accepting surrogate markers of drug efficacy (rather than tried-and-true clinical trials) and elegant theories of genetic causation that may or may not be true. Let me give just one an example. Today’s imaging technology can show the sugar uptake of fast-growing cancer cells. Successful cancer drugs dramatically slow sugar uptake, so, in theory, if one sees that in an image test it is a sign they are not growing so quickly anymore. One way to bring drugs to market more quickly is to use that imaging technology to show the drug candidate has slowed the uptake, and base the approval on it.
But does that mean the person with cancer who takes that drug will actually have their tumor shrink? Does it mean it will add years to their lives? Or months? Or will it turn out to be just one more false hope in the long war on cancer?
The answers to those questions can only be determined by controlled clinical trials, which have been the gold standard at the agency for nearly half a century. I heard a lot of talk about the rapid advances in basic science today, but I didn’t hear the phrase “clinical trial” mentioned once. If the “critical path” turns out to be a subterfuge for getting around the FDA’s current requirement that hard, clinical evidence of efficacy is needed before a new drug gets approved, the agency’s leadership, the companies, the institutes and think tanks that have signed onto this agenda will run into a justifiable consumer (and payer) revolt when, as is inevitable, some of the elegant scientific theories turn out to be false premises.
Merrill Goozner, author of “The $800 Million Pill” and blogger at, directs the Integrity in Science project at the Center for Science in the Public Interest.


5 comments on “Merrill Goozner: Industrial Policy for Big Pharma

  1. Gregory D. Pawelski says:

    The needed change in the “war on cancer” will not be on the types of drugs being developed, but on the understanding of the drugs we have. The system is overloaded with drugs and underloaded with the wisdom and expertise for using them.
    Cancer patients usually undergo four or five courses of chemotherapy before medical oncologists can tell whether the treatment is having an effect. By that time, the tumor may have grown so large that it is too late to switch to another chemotherapy regimen or the patient may be so weakened by the treatment that trying another approach is not immediately feasible. Medical oncologists treat a lot of patients but they don’t know going into treatment if it’s going to work.
    A major obstacle in controlling cancer growth and metastasis in patients is the widespread inappropriate use of anti-cancer drugs. As the increasing numbers and types of anti-cancer drugs are developed, oncologists become more and more likely to misuse them in their practice. Between 2002 and 2004, 395 cancer drugs were submitted for clinical trials.
    It would be highly desirable to know what drugs are effective against particualr cancer cells before these cytotoxic agents are systemically administered into the body. Cell culture assays are clinically validated drug tests on living specimens of cancer cells to determine the optimal combination of chemotherapy drugs. These assays are specifically tailored for each individual patient based on tumor tissue profiling, with no economic ties to outside healthcare organizations, and recommendations are made without financial or scientific prejudice.
    Recommendations are designed scientifically for each individual patient. Various assays are performed on a tumor sample to measure drug activity (sensitivity and resistance). This will determine not only what drug or combinations of drugs will not effectively work, but which will be most effective for an “individual’s cancer. Then a treatment recommendation is developed through what is know as “assay-directed” therapy.
    At one time, chemosensitivity testing was considered unreliable because it was only fifty percent accurate and it took too long to get the results. Today, preliminary results are completed in about seven days and chemosensitivity testing has progressed to the point where it is <90% effective.
    The key to improving drug sensitivity tests is related to the number and types of drugs tested. The more anti-cancer drug types there are in the selective arsenal, the more likely the system is to prove beneficial. In order to acquire sufficient data, tumors are tested with at least two assay endpoints, and most often three, for sensitivity in any one patient. On average, up to twenty drugs and combinations at two concentrations in three different assay systems, is an effective way to avoid false-positive or false-negative data. Careful choice of drug doses and administration intervals also improves outcomes.
    Conventionally, chemotherapy is prescribed by medical oncologists according to fixed schedules. These schedules are standardized drug regimens that correspond to specific cancer by type or diagnosis. These schedules, developed over many years of clinical trials, assign patients to the drugs for which they have the greatest statistical probability of response.
    However, patients with cancers that exhibit drug resistance are on the wrong side of the probability curve. They will likely receive treatments that are wrong for them. A failed attempt at chemotherapy is detrimental to the physical and emotional well-being of patients, financially burdensome, and may preclude further effective therapies.
    Every cancer patient should have his/her own unique chemotherapy trial based on consultation of pathogenic profiles and drug sensitivity testing data. Research and application of drug sensitivity assays are being encouraged by growing patient demands, scientific advances and medical ethics. Drug sensitivity tests are not a luxury but an absolute necessity, and a powerful strategy that cannot be overlooked.
    A chemo-induced gene mutation can happen when the original chemo received does not work. The cancer comes back. When it does this, the cancer comes back more aggressively. The mutagenic effects (changes in form) of chemotherapy on a genetically-unstable tumor, drives the tumor into a state of more aggressive behavior.
    A cell culture assay uses living tumor cells to determine which drug or drug combination induces apoptosis (cell death) in the laboratory. Each patient is highly individualized with regard to sensitivity to chemotherapy drugs. A patient’s responsiveness to chemotherapy has its own unique individuality.
    There has been a veritable deluge of new approvals of cytotoxic drugs in recent years as the tortuous FDA process has been speeded and liberalized. In many cases, a new drug has been approved on the basis of a single very very narrow indication. But these drugs may have many useful applications, and it may take years to find out. Cell culture assay testing offers a way of seeing if any of these new drugs might apply to an individual’s specific cancer.


  2. pagoff says:

    Pricing of medication is a major issue. Taking obscene advantage of it’s patent protected monopoly, big pharma brings new drugs to market at prices of up to $10,000/month–maybe even higher. These single drug costs often exceeds the median and average income of individuals and families in the U.S. This is not a sustainable path and this industry which is one of the three most profitable sectors in the U.S. economy needs to rethink itself.
    If needs to more efficiently develop new drugs. It needs to charge realistic prices for their product taking into account the tax supported research that has made most new technologies possible.


  3. Carroll says:

    If the pharmaceutical industry actually worked on producing “cures” it would obviously mean less profitibilty in the end..hence they have no interest in “cures’ only treatments.
    I wonder how much money they put in the hands of the isolated few researchers who actually are trying to break thru real cures.


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