More on Drug Discovery and public funding

Following up on the last post on Virtually Speaking’s recent episode featuring Dean Baker and his comments on drug discovery, I’ve had a nice conversation with Jay and I think we are a little closer to understanding what’s going on here.  In some sense, we may have been talking past each other, in another sense, there are still some engrained biases there that the left will need to fight its natural impulses in order to contain.  But it is all good.

So, in the interest of fairness, I am posting a link to Baker’s proposal to a public funding mechanism for drug discovery.  I confess that I haven’t had time to read it yet, what with moving and work related activities, making sure Brook is studying for her finals, and driving back and forth between PA and NJ, so I’m going to hold off critiquing it until I do.  However, I will say that any policy proposals that don’t involve the input of people who actually have the experience of drug discovery are probably not going to work very well.  After all, we’ve had a couple of decades of the MBA class restructuring on a regular basis without the input of their R&D staff and how did that work out?  We do have opinions and are well trained in the scientific method, so, you know, take advantage of our expertise before you set up some new system that might be as unworkable as the old one was.

Here’s the link to Dean’s Financing Drug Research: What are the Issues?   I just noticed that it was written in 2004.  At this point, given the last decade of craziness, it’s out of date and due for a rewrite.  I mean, for one thing, there really isn’t an American drug discovery industry anymore.  There are only remnants and a whole lotta unemployed chemists with lots of time on their hands.

And here is a recent post from Derek Lowe on the subject of The Atlantic’s recent article, How Drug Companies Keep Medicine Out of Reach.  Derek touches on some of the mythology surrounding the drug discovery process. Says Derek:

At some point, the article’s discussion of delinking R&D and the problems with the current patent model spread fuzzily outside the bounds of tropical diseases (where there really is a market failure, I’d say) and start heading off into drug discovery in general. And that’s where my quotes start showing up. The author did interview me by phone, and we had a good discussion. I’d like to think that I helped emphasize that when we in the drug business say that drug discovery is hard, that we’re not just putting on a show for the crowd.

But there’s an awful lot of “Gosh, it’s so cheap to make these drugs, why are they so expensive?” in this piece. To be fair, Till does mention that drug discovery is an expensive and risky undertaking, but I’m not sure that someone reading the article will quite take on board how expensive and how risky it is, and what the implications are. There’s also a lot of criticism of drug companies for pricing their products at “what the market will bear”, rather than as some percentage of what it cost to discover or make them. This is a form of economics I’ve criticized many times here, and I won’t go into all the arguments again – but I will ask:what other products are priced in such a manner? Other than what customers will pay for them? Implicit in these arguments is the idea that there’s some sort of reasonable, gentlemanly profit that won’t offend anyone’s sensibilities, while grasping for more than that is just something that shouldn’t be allowed. But just try to run an R&D-driven business on that concept. I mean, the article itself details the trouble that Eli Lilly, AstraZeneca, and others are facing with their patent expirations. What sort of trouble would they be in if they’d said “No, no, we shouldn’t make such profits off our patented drugs. That would be indecent.” Even with those massive profits, they’re in trouble.

And that brings up another point: we also get the “Drug companies only spend X pennies per dollar on R&D”. That’s the usual response to pointing out situations like Lilly’s; that they took the money and spent it on fleets of yachts or something. The figure given in the article is 16 cents per dollar of revenue, and it’s prefaced by an “only”. Only? Here, go look at different industries, around the world, and find one that spends more. By any industrial standard, we are plowing massive amounts back into the labs. I know that I complain about companies doing things like stock buybacks, but that’s a complaint at the margin of what is already pretty impressive spending.

The point is that drug discovery ain’t rocket science.  It’s much, much harder.  Are there ways to make it easier and less expensive to the average consumer?  Yeah, probably, but it’s still bloody hard and in some respects, the left has as much to answer for as the right does when it comes to the cost and expense of developing drugs.  If we’re all in this together, then the left has an obligation to learn all that it can about the mechanisms of drug discovery and who is making a fortune on drug failures as well as successes because we know that the right isn’t going to do it.  Let’s be better than them.  M’kay?