How Valeant, Anthem, and chirping crickets suggest Saunders’ social contract is doomed

This piece originally appeared in the Timmerman Report.

When Allergan CEO Brent Saunders announced his manifesto on drug pricing at Allergan just after Labor Day, he was met with acclaim and approval (some examples here and here). He called for a return to the social contract between biopharma companies and patients. In his view, patients understood in the past that developing drugs was risky and cost a lot of time and money, and therefore patented drugs would be expensive. Drug companies, holding up their end of the social contract, felt an obligation above simple profit-making—that drugs are supposed to keep patients healthy or to get them back to that state. That meant pricing had to take into account the public good, not just profit maximizing, and be reasonable. Moving forward, Saunders announced that, among other things, Allergan would commit to value-based pricing and to limit price increases to no more than single-digit percentage hikes per year.

These are worthy and admirable goals. But I look at other recent events and can’t help feeling his effort is doomed. Continue reading

How Distributed R&D Could Spark Entrepreneurship in Biopharma

This piece originally appeared in the Timmerman Report.

Remember the patent cliff and the general lack of new and innovative medicines in the industry pipeline? That was the big story of the past decade in biopharma. It caused a lot of searching for the next best way to organize R&D to improve productivity. One doesn’t hear that quite as often today. There are more innovative drugs both recently approved and moving forward through the pipelines of several biopharma.

The conversation these days has shifted toward drug pricing, and how the public is going to pay for some of these new, exciting drugs (the answer, in some cases, is maybe it can’t).

I don’t think the industry out of the woods yet. One of the main reasons drug prices have become such an issue is because even though there are new, innovative drugs, there aren’t enough of them. At the same time many of the drugs being approved are incrementally better but nevertheless being priced at a premium. And good reporting has made the public more aware of how many of our existing drugs are rising in price on a yearly basis. Especially in a time of little inflation, prices of most goods have not been going up at nearly the rate of pharmaceuticals.

Biopharma sits in a tough place. Analyses suggest the cost of developing a new drug has generally been doubling every nine years, which may be a by-product of some combination of the complexity of biology, our inability to predict which drugs will work, and the “better than the Beatles” problem. The question then is how to overcome these issues and increase the efficiency of developing new, innovative drugs. Without some kind of change, the industry is looking at a very difficult future in which price hikes run headlong into the wall of payers who finally say enough. Then what? Continue reading

The power law relationship in drug development

All opinions are my own and do not necessarily reflect those of Novo Nordisk.

A few weeks ago a friend and I had the great opportunity to go see Nate Silver speak at the University of Washington. He’s a funny, engaging speaker, and for someone like me who makes his living generating and analyzing data, Silver’s work in sports, politics and other fields has been inspirational.  Much of his talk covered elements of his book, The Signal and the Noise, which I read over a year ago. It was good to get a refresher. One of the elements that particularly struck me this time around, to the point that I took a picture of his slide, was the concept of the power law and its empirical relationship to so many of the phenomena we deal with in life.

Nate Silver graph small

Figure 1: Slide from Nate Silver’s talk demonstrating the power law relationship in business–how often the last 20% of accuracy (or quality or sales or…) comes from the last 80% of effort.

Because I spend way too much time thinking about the business of drug development, I started thinking of how this concept applies to our industry and specifically the problem the industry is facing with creating innovative medicines.

Continue reading

The innovators dilemma in biopharma part 3. What would disruption look like?

All opinions are my own and do not necessarily reflect those of Novo Nordisk.

h/t to @Frank_S_David, @scientre, and the LinkedIn Group Big Ideas in Pharma Innovation and R&D Productivity for links and ideas

Part 1 is here.

Part 2 is here.

In the previous parts to this series I’ve covered both why the biopharma industry is ripe for disruption, and what the markets might be that could support a nascent, potentially disruptive technology until it matures enough to allow it to supplant the current dominant industry players.  In this final part I’d like to ask what disruption would look like and provide some examples of directions and companies that exemplify what are, to my mind, these sorts of disruptive technologies and approaches. With, I might add, the complete and utter knowledge that I’m wrong about who and what specifically will be disruptive! But in any case, before we can identify disruption, it’s worthwhile to ask what are the key elements of biopharma drug development that serve as real bottlenecks to affecting  human health, since these are the elements most likely to provide an avenue for disruption. Continue reading

Biopharma should choose targets using a baseball-style draft

All opinions my own and do not necessarily reflect those of Novo Nordisk

I was sitting around last evening checking out how the end of my fantasy baseball season is working out (for the record, first out of ten in one league and fourth in the league I wrote about here) and I starting thinking again about the parallels between baseball and drug development (which I previously wrote about here and here for example, and also Stewart Lyman has a nice piece on a similar theme here). And it hit me that there’s another way in which biopharma could take a  page from baseball: fantasy and Major League Baseball both.

Biopharma could institute a draft for drug targets.  And to explore this I’m going to employ the time-honored, not to mention trite and artificial, format of a series of questions and answers.

Continue reading

Lack of replication no surprise when we’re studying really complex problems

All opinions are my own and do not necessarily reflect those of Novo Nordisk

For another nice take on this topic see Paul Knoepfler’s blog post here.

One of the sacred (can I say sacred in reference to something scientific?) tenets of the scientific method is reproducibility.  If something is real and measurable, if it’s a fact of the material world, then the expectation is that the result should be reproducible by another experimenter using the same methods as described in the original report.  One of the most well known (among physicists anyway) examples of irreproducible data is the Valentine’s Day Magnetic Monopole detected by Blas Cabrera back in 1982.  Great experimental data.  Never repeated, and therefore viewed as insufficient proof for the existence of a magnetic monopole.

So it’s troubling that in the past few years there have been numerous stories about the lack of reproducibility for different scientific experiments.  In biomedical science the number of  reports on the difficulty of reproducing results has gotten so great that the NIH has begun thinking about how to confirm and require reproducibility of some kinds of experimental results.  Just a few days ago another field, that of psychological priming, saw the publication of an article that the effects of “high-performance priming,” could not be reproduced.  This is another field undergoing serious questioning about whether/why results don’t reproduce, with commentary from such luminaries as Daniel Kahneman. Continue reading

Internal and external motivation and the GSK big-bonuses-for-a-successful-drug initiative

All opinions are my own and do not necessarily reflect those of Novo Nordisk.

The story in the Times of London about GSK’s new strategy for incentivizing its R&D teams by rewarding millions (yes millions) of dollars to deserving members of the team that gets a drug to approval has provoked a flurry of responses.   You can see posts from Derek Lowe, John LaMattina, and David Shaywitz that do a nice job of summarizing why this seems like a really bad idea in a lot of ways.  I don’t want to restate their arguments, other than to agree wholeheartedly that rewarding the lucky scientists will overall disincentivize researchers, will be difficult to administer fairly especially given the collaborative nature of biomedical research and the long, long timeframe for a drug to be approved, will have a great likelihood of upsetting and causing hard feelings in employees, and also misses the point that motivation is hardly what’s lacking in R&D these days.

I’d like to touch on that last point with respect to what I feel is particularly worrisome in this:  the complete externalization of motivation on the part of scientists, and the downstream consequences for ethical behavior and human health.  A recent survey commissioned by the Law Firm of Labaton Sucharow suggests that ethical standards on Wall Street are troubling.  About a quarter of respondents had observed or had firsthand knowledge of misconduct at their companies, and about a quarter also admitted they would engage in insider trading to make $10 Million if they thought they could get away with it.  If these GSK-type bonuses become the standard in BioPharma R&D, will we see a rise in unethical behavior on the part of scientists?  And could that lead to endangerment of human health, with clinical trials performed on compounds that are pushed farther than they should be because the R&D team is looking ahead to the possible prize?

I remember a mentor at Merck asking me after my first year how I liked my bonus.  I responded enthusiastically.  He nodded, smiled a  little and said, “Enjoy the feeling.  Because next year it won’t be the same.  It’ll just be something you expect.”  And he was right.  We talk about the perks of working for BioPharma, but there’s actually a cost to being in an environment that provides the kinds of lavish benefits we get in industry.  It can cause the personal source of motivation to shift from internal to external rewards.  Ultimately, for people who are creative, I think the best work is done when internal motivators are a strong part of the driving force–something Daniel Pink describes in his book Drive.  It’s why I think games work so well as a tool for getting things done.  They tap into internal motivating factors.  After all, no one (other than World of Warcraft Gold Farmers and the like) spends hours playing a game because they’re being paid to. We should not be trying to make an engaging, exciting pursuit like research into just something we do because it pays the bills.