Three Views of a Train Wreck

Despite and arguably because of the enormous public health benefits arising from the introduction of new medicines, the industry is in the midst of crisis. We detail in this chapter the decline in research and development efficiency, which has been termed “Eroom's Law,” a playful inversion of the bettern known Moore's Law of Computing. An explanation of declining efficiency follows as is a brief summary of some remedies taken by many biopharmaceutical entities, including the abandonment of therapeutics targeting particularly difficult indications such as Alzheimer's disease and antibiotics. We also convey how the industry has developed into a sort of food chain, with smaller companies and government grants supporting the earliest stages of research, which are then acquired by medium-sized companies, which in turn are consolidated into large companies. This food chain is fundamentally in doubt based on shrinking Federal spending on research combined with a decline in venture capital support for early-stage start-ups.

Blockbusters and Bombs

The first indications of future trouble are identified. For most of history, new medicines arise from nature but this approach came into question as evidenced by the development of the cancer drug Taxol. As understanding of biology and chemistry incraesed, a degree of over-confidence arose as researchers assumed that new technologies would allow them to predict the most effective medicines. These changes were a response to an environment confronting twin pressures in the form of rising generic medicines coupled with ever more costly research and development activities needed to develop new products to replace those devastated by generic competition. These issues were exacerbated by a rising dependence upon “blockbuster” products, which conveyed short-term revenues but inevitably needed to be replaced by even more profitable products once generic competition intervened. Dependence on blockbusters was exemplified by the story of ulcer medicines, which was disrupted by an audacious study by an investigator who used himself as a Guinea pig to make his point. As such risks increased, the industry became more cautious and the race was on to make incremental improvements upon competitors’ products. All the while the cost of developing new medicines continued to escalate.

Introduction

The traffic was unusually heavy for a Monday afternoon. I left my office at the Yale University Center for Molecular Discovery, just four miles from the intended destination, and encountered a backup on I-95 North that was usually reserved for later in the week. Being a beautiful summer day, it seemed a few too many fellow commuters in New York City and western Connecticut had decided to call it an early day. Leaving the highway for the back roads, I pulled into the parking lot five minutes late....

Bridging the Valley

The withdrawal of large company support for early stage research, combined with shrinking Federal expenditures, has created a “Valley of Death” in drug discovery that creates both pressing challenges and extraordinary opportunities. This chapter details the opportunities that could be created by incentivizing new innovative and entrepreneurial research into novel medicines. Many “experiments” are currently under way to identify novel means of addressing the Valley of Death and successful examples include a partnership between Yale University and Gilead Sciences, a California biotechnology company. We also explore the potential and limitations of academia rising as a means to address the need for early-stage drug research and conclude the chapter and the book with the idea that the Federal government could play a key role were it to more actively and creatively function as both the largest source of public venture capital as well as the key regulator of new medicines.

Sea Monsters, Immunauts, and Death Panels

We return to the rise of biotechnology, revealing the risks and rewards arising from recombinant DNA technologies as evidenced by the formation and ultimate dissolution of the first biotechnology company. Cetus succeeded in creating innovative breakthrough but its business side lost to competition, hastenign its demise. We then transition to witness the rise and fall of Seattle-based Immunex, which again introduced revolutionary medicines but whose inability to manufacture enough product fated it to be acquired by Amgen. In another venture, a founder of Immunex started a second company, which developed a product that was a technological hit but failed due to a structural means by which new medicines are prescribed. Such challenges were observed and addressed by other startups, such as Amgen and Genzyme, which executed successful scientific and business strategies. The rise of Genzyme in particular reflected an opportunity afforded by the passage of the Orphan Drug Act, which granted special incentives to products targeting low-incidence diseases.

Triumph and Tragedy

Industry growth mirrored innovation taking place in all aspects of understanding disease and ways to ameliorate it. All of this knowledge was needed to tackle the most deadly disease of modern times, HIV/AIDS. The surprisingly old history of a modern disease is related as well as the role that a key research organization, the National Institutes of Health (NIH), played in combatting the deadly virus. We also demonstrate how serendipity intervened in the form of a set of failed cancer medicines developed by a Detroit scientist years before AIDS was widely recognized. The discovery and advancement of pain-relieving medicines, from aspirin to Vioxx, is related. The triumphs and tragedies of these needed medicines fave rise to patient activism and critique of the FDA, some of which reflects an imbalance between resource availability and reactions to over- and under-regulation.

Trials and Tribulations

The testing of new medicines is a complex, labor- and cost-intensive practice that has evolved over the past 200 years. This chapter explains some of the jargon used by medical practioners and industry scientists to explain how the cure for scurvy by a promising young British Navy captain gave rise to the naming of Royal Navy sailors as “limeys.” More than a century later, the Nazi atrocities of the Second World War likewise contributed to the rise of modern ethical practices and examples of how these have been implemented include the approval of breakthrough cancer medicines. In doing so, we discuss the different “phases” of clinical trials and relate the lessons learned from a tragic 2006 clinical trial in London that caused one volunteer's head to swell so large that he was referred to as “the Elephant Man.” By understanding how the size and intensity of clinical trials has grown over time, one begins to appreciate the parallel escalation of drug costs. Finally, we discuss the thalidomide crisis and how the bravery and persistance of a new female FDA employee overrode a multi-national conglomerate to prevent America from falling victim to the severe birth defects experienced by many other countries.

Autophagy

The title of the chapter is a Greek term that literally translates into “eating oneself” and is representative of a trend of mergers and acquisitions that has subsumed the drug development enterprise over the past three decades and now fundamentally threatens our ability to develop new medicines. We begin with two examples of acquisitions by Eli Lilly & Company. One product resulted from an unexpected discovery by Pfizer scientists of a drug meant to treat angina that had the unexpected but not undesired effect of treating erectile dysfunction. The second acquisition, of New York-based Imclone, was the final step in a high profile controversy that led the jailing of its CEO and the celebrity Martha Stewart for insider trading. Despite these two acquisitions, Eli Lilly largely did not participate in the merger mania of the past few decades and we relate how this most innovative company fell through the rankings to become a middling contender. This waning resulted from the meteoric rise of Pfizer as one of the most aggressive purveyors of pharmaceutical industry consolidation and the unlikely rise of Valeant Pharmaceuticals, a company with a checkered history and ongoing woes.

Drama on the I-270 Tech Corridor

This chapter focuses upon one particular geographic region in suburban Washington, DC, which serves as a microcosm for the challenges and opportunities of the larger drug development enterprise. Our story begins with the efforts to sequence the human genome, an ambitious project that led to an increasingly bitter and highly publicized rivalry between the personalities of Craig Venter and Francis Collins from the private and public sectors, respectively. This same initiative gave rise to the dramatic growth in a cadre of biotechnology companies in suburban Maryland dedicated to exploiting the commercial opportunities associated with the human genome. The bubble would ultimately be burst as a result of various legal and executive decisions and in doing so, obliterated billions of dollars in wealth and effectively shudder an entire sector. All the while, another upstart biotechnology company, MedImmune, continued on a lower profile but ultimately more successful path to introduce innovative new medicines. However, this company would itself suffer a series of setbacks of its own making that resulted from the failed commercial launch of an improved influenza vaccine.

The DNA of Biotechnology

This chapter relates the birth of the biotechnology industry, whose origins can be traced back to the Spanish flu and which would later revolutionize both fundamental understanding of life as well as create new and improved products. We then relate how the birth of biotechnology transitioned from St Louis, Missouri to San Francisco largely based on the inspiration of one man and how this controversial revolution was almost upended by popular culture. Our story then turns to the creation of one of the earliest biotechnology companies, Genentech, and why the creation of this company was mired by criticism that cost two key inventors of DNA research the Nobel prize. Genentech and other companies would soon come to embrace a technology, known as monoclonal antibodies, which allowed for selective targeting analogous to the use of modern smart bombs and create its own conflicts with the rise of aggressive patenting. The opportunities arising from the technologies inspired many government and academic investigators to become entrepreneurs, foster companies such as MedImmune to develop revolutionary new therapies to prevent a major killer of premature infants, Respiratory Syncytial Virus (RSV).