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Pharmageddon continues

This time it’s Glaxo Smith Kline (GSK). You may remember that GSK was in the papers recently because it was one of the only big pharma companies with a potential vaccine for ebola. Well, now they’re cutting their R&D staff. According to the rumors flying over at In the Pipeline, the biggest cuts are going to happen at their research park in North Carolina.

How these things typically happen is the pharma in question just eliminates a whole research division or therapeutic area. Your job is not spared because you made your company a zillion dollars on the patent you sold to it for a dollar 10 years ago. I used to be in favor of this quid pro quo arrangement. You give me the means to do my research, I give you the fruit of my labor. But now, I’m not so sure. Like everything else, there are predators in the executive suites and on Wall Street who have zero appreciation for the amount of work it takes to create a new drug entity and plenty of people who think they own it. In some respects, researchers have only themselves to blame for not protecting their own interests, those being the need to earn a living in order to consume calories to sustain life and have a roof over their heads.

GSK’s cuts come on the heels of cuts at Astra-Zeneca, which decided to get rid of its antibiotics research unit. Yeah, try to figure that one out. And then there was Amgen that recently announced that it would cut up to 4000 jobs globally including at its research facility in Seattle. So, while the flood of layoffs in the US R&D industry has slowed down a bit since the high water mark of 2009-2010, it’s still not finished yet. After all, sooner or later, the industry will run out of people to lay off. But we’re still going to see pulses of carnage here and there, dumping more over-educated, over-qualified, experienced and talented chemists and biologists into the already saturated labor market. Fun, fun.

In other news, the left sometimes *almost* grasps what the problem is with pharmaceutical R&D but as soon as those of us who really know what’s going on turn our backs, we get more clueless BS from people like Dean Baker. Don’t get me wrong, I’d love to have him on my side. But he doesn’t seem to spend any time talking with people who have actually, you know, been there. There is something bizarrely automatic about the left’s misunderstanding of how drugs get invented and developed. Maybe this has something to do with the complexity of the process. Or maybe it’s just laziness.

Here’s the basic outline of the misunderstanding: The NIH, which we all pay for, does basic research. Then it collaborates with a big drug company and that big drug company turns around and sells that basic research for a ginormous profit. All the big company does is scales the sucker up, runs some admittedly expensive clinical trials, and then produces and markets the drug, delivered fresh and complete from the NIH labs, directly to you the consumer at an enormous markup.

There is just enough truth about the greed of the executive and finance movers and shakers to make this look plausible. Unfortunately, it is one of those beautiful theories easily destroyed by ugly facts.

I don’t want to go into this again because it will take at least several posts to unpack but the NIH rarely delivers a pristine drug to industry. No, the whole idea of basic research is that it is basic. That doesn’t mean it isn’t hard or not valuable. It means there is sometimes little more than a nugget of a something to follow up on. The “drugs” are sometimes nothing more than fragments or completely undruggable. (Undruggability is a whole different topic) Sometimes, there is no drug delivered to industry. Sometimes, it’s merely the suggestion that a specific protein target may or may not be involved in some undesirable endpoint.

The role of industry R&D is to take this very basic research and through many years of real, genuine, honest-to-god research, turn it into something resembling a drug. It is a very expensive process. I’m not surprised at the numbers being batted around. That is not to say that we can’t cut back on the amount of marketing that pharma does. At the end of the day, what is more valuable to you? The researchers that invent an ebola vaccine or the marketers that tell you why you need it? But to get real drugs from real research, a lot of money must be spent in order to pay for many trials and errors and reagents and lab equipment and researchers who need to be fed and housed.

That being said, it sure does look like there is a plan to exploit NIH and academic labs. If you get rid of all your R&D units in the name of shareholder value, or at least cripple them with endless, non-productive mergers and acquisitions and layoffs, you may end up without anything to market. And there are a lot of geeky students out there who are willing to work at subsistence wages to get a PhD. Why not use them as your new staff? That certainly looks like what is happening. It’s a bit of a self-fulfilling prophecy.

What is missing in the equation is the experienced R&D staff that will know “when to hold’em and when to fold ’em” when it comes to actually making the potential drugs. In other words, there will be a lot of reinventing of the wheel in academic labs as they sort through how to do it on limited soft money.

It’s a research strategy only a banker could love.

***********

One bright spot for the journal famished: Nature is experimenting with making its journal archive and current issue available as a free “read-only” version. That’s to circumvent the habit of some poor researchers who have to sneak around to satisfy their paper habit, a phenomenon known as “dark sharing”. You have to know someone who has inside access to a license, usually some friend who is still in industry or someone at a university. This is what we are reduced to: sharing illicit copies of nerdy papers like they’re banned versions of Tropic of Cancer. Read-only versions that you can’t save or refer to later is  better than nothing, I guess, though not quite as good as getting a subscription to Nature and Science for Christmas.

 

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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?

 

 

Calling all medicinal chemists, time to contact Virtually Speaking

I was mulching my flower beds, listening to the latest Virtually Speaking with Dean Baker and Jay Ackroyd when I heard the same moronic bullshit about how drugs are REALLY all discovered in academic labs using government money and the drug companies just put the finishing touches on them, develop them and charge a small fortune.

I’ll give you the fortune bit, for sure.  There’s no doubt that the marketers and finance guys are charging what the market will bear and then some.  They’re greedy, ruthless and cruel.  The whole drug industry has pivoted to serve the owners and the owners want money.  That affects what gets researched, promoted and sold and at what cost.

BUT

There is absolutely no truth to the idea that academia passes on almost fully formed drugs to industry where we researchers add our special sauce flourishes and then cash in big.

I repeat.

There is absolutely no truth to the idea that academia passes on almost fully formed drugs to industry where we researchers add our special sauce flourishes and then cash in big.

If Dean Baker and Jay Ackroyd and Yves Smith want to propagate this myth, they can knock themselves out.  But it’s no more true that the idea that Bill and Hillary Clinton did something nefarious with a land deal in the Ozarks.

Maybe it’s what they want to be true, maybe it fits their worldview, maybe it’s wishful thinking but it not true.  And I should know because I’ve worked in both industrial and academic settings and I actually DO the kind of drug discovery that Jay and Dean talk about so confidently but have no clue about.

The truth is that academia rarely submits a fully realized drug entity to industry for development.  What it submits is frequently just an idea.  Sometimes, that is just a target (a protein, receptor, gene, etc) and sometimes, it consists of some very basic building blocks.  Those building blocks will not resemble the final drug product until industrial medicinal chemists spend years and years rescaffolding it, making new appendages for it, and developing whole libraries of potential drug compounds that may not resemble the initial compound in the least when they are finished.

So, yes, the NIH funds a lot of research but, no, that research does not result in anywhere near effective or consumable drugs until industrial chemists get their hands on it and bend it to their wills.  By the way, those industrial chemists used to be academic chemists.  It’s not supposed to be an adversarial relationship.

Anyway, for all you pharma researchers out there who are pissed off by the “everybody knows” truthiness and yet more dissing of your shrinking profession and want to set the record straight, let Jay Ackroyd at Virtually Speaking know.  God only knows why Jay won’t simply invite someone like Derek Lowe on his show to tell it like it really is.  It’s almost like they don’t want to hear the truth, that somehow by sticking their fingers in their ears and singing “la-la-la, I can’t HEAR you”, that that’s going to make the poor graduate students working for peanuts into unsung heroes and pump lots of righteous indignation into the put upon American people.  Well, those graduate students ARE unsung heroes, but so are many of my former industrial colleagues in medicinal chemistry and drug design who have slaved tirelessly for years wrestling some academic’s decidedly un-druglike molecule into a real drug that can be developed.

I’m really insulted by this poor performance by Ackroyd and Baker.  The left deserves people who are not lazy and who will actually go out of their way to get to the truth.  Otherwise, the drug industry will continue to fail, drugs will continue to skyrocket in price and no one will be able to do anything about it because they’ll all be off chasing wild geese or red herrings or whatever it is you call it that is just a waste of time and energy.

Jay and Dean aren’t even seeing through a glass darkly at this point.  If they would only come and actually, you know, talk to us, we could tell them what’s really going on so they could talk more intelligently about a subject they clearly know nothing about at the present time.  I’m not sure what is holding them back.  Is it the absurd notion that those of us who work(ed) for industry  are as greedy, ruthless and conservative as the guys who laid us all off?  Even if that were true, (it’s not, not by a long shot) is that a good reason for ignoring what we have to say?

You can’t fix a problem if you are totally ignorant.

Here’s Jay’s links if you want to set the record straight.

Jay on Facebook

Jay on Twitter

VS Guests on Twitter

VS in Second Life

VS Ning

VS on BlogTalkRadio

VS on Facebook

VS on Itunes

And here is Dean Baker’s twitter feed.

 

 

 

 

The State of Labor

Every now and then, someone will sum up a concept so clearly and elegantly that truth cannot be missed.  I only wish Dean Baker had written it last year when Chris Bowers and the rest of Whole Foods Nation were in the “You like me!  You really LIKE me!” stage as the Obama campaign was fluffing them.  Here it is, all you need to know about the working class:

“Most of us work for a living; the rest are bankers.”

If you are not a banker or someone who owns a huge chunk of an international corporation, you are working class.  You depend on a banker of a corporate owner for your livelihood.

And you are incredibly vulnerable.

Rich people are not like you and me.  Wait, I think someone else said that.  Well, he’s dead now, he won’t mind.  He was right, of course, the very wealthy and well connected are Jet Setters.  They think globally, not locally.  That whole citizenship/patriotism/pride in country thing is soooo outre.  Everyone knows that labor is cheap everywhere else in the world and people are swappable like new widgets.  And if your own workers are too expensive or still covered by a bothersome union, have no fear!  You only have to shutdown your American research facilities and with the money you save, you can buy up some struggling little companies with  good ideas.  Buy them up!  Drink their milkshake!  Corner the market on innovation.  Never think beyond the next resort season.

It’s all about power and accumulation and not having to answer to anyone and a huge, global game of Monopoly where you can charge rent on everything from St. Charles to Park Place.  Don’t worry about the proles getting in a high dudgeon about it.  Hire a bunch of mindf$^&ers who will convince the gullible to vote against their own interests.  Or tell them that losing their jobs is a sacrifice for the greater good.  Keep them from associating with each other.  Make them call each other racists and teabaggers.  Sit back and watch the fun.

But seriously, folks, when the mindf%*(ers convinced the Whole Foods crowd to vote for Obama, the neofeudalists won.  It is going to be very, very hard to work our way out of the predicament we are in.  Unless we can wake up the working class in the next couple of years, we will not be able to turn this around.  We will have turned ourselves into a highy stratified society consisting of the superrich and everyone else.  We won’t mix.  There will be no equality.  No innovation.  We’ll have our own caste system.  Even higher education will be pointless.  There will be no jobs.  It will only be the masters and their servants like Jane Austen’s England. And don’t think that Sonia Sotomayor is going to make a bean’s worth of difference on the USSC.  I wouldn’t be surprised if she were just the kind of justice the bankers (and their bonuses) love.  We shall see.

We Clintonistas were the canaries in the coal mine, last year.  We saw where the working class was headed when the Democratic party abandoned us.  And we tried, desperately, to get the attention of the Whole Foods crowd, to no avail.  But the truth is, the self-identified “creative class” were *always* one of us.  They just didn’t know it until now.  And until they accept us as their equals and join with us in solidarity, we will have no power as a Union.

Happy Labor Day.


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