Bookshelf: Fighting Disease Is Only Half the Battle

Bookshelf: Fighting Disease Is Only Half the Battle

Miller Op-ed in The Wall Street Journal
August 25, 2004

As a fresh-faced medical intern, a colleague of mine once greeted a new patient with a breezy, "So what's your problem?”  "Oh, just a touch of leukemia," the pallid fellow answered. 

But that was in the mid-1950s, when there was no such thing as "a touch" of leukemia or any other cancer.  We knew almost nothing about the disease then, except that it was a death sentence and a gruesome end. 

A half-century of new drugs has changed all that.  Blood-related malignancies such as leukemia and lymphoma are now among the most curable forms of cancer.  Similar treatment breakthroughs have occurred for arthritis, hypertension, and cardiac disease, and new vaccines have virtually eradicated many dreaded childhood illnesses.  Such success has not spared the pharmaceutical industry its share of criticism—indeed, more than its share.  In "The Truth About the Drug Companies," Marcia Angell, a lecturer at the Harvard Medical School and a former editor of The New England Journal of Medicine, joins the fray.  She accuses the drug industry of profiteering, of making itself "a marketing machine to sell drugs of dubious benefit" and of using "its wealth and power to co-opt every institution that might stand in its way, including the U.S. Congress, the FDA, academic medical centers, and the medical profession itself.”  She believes that the industry "feeds off the NIH" and that new drugs "nearly always stem from publicly supported research.”  She blames the industry, "corrupted by easy profits and greed," for the paucity of genuinely innovative and affordable new drugs. 

How persuasive is she?  In 1999, the National Institutes of Health investigated whether its research funding commonly leads to the development of new drugs, the profits from which taxpayers might be entitled to share.  Of 47 drugs that had earned revenues of $500 million or more, NIH support had figured significantly in only four. 

Dr. Angell's denunciation plays down the drug companies' huge investments in research and development.  The research-based pharmaceutical industry (that is, excluding companies that make generic drugs) currently spends upwards of $33 billion annually on R&D, investing a far greater percentage of sales (17.7 percent) in research and development than any other industrial sector, including electronics (6 percent), telecommunications (5.1 percent), and aerospace (3.7 percent).

Such vast expenditures are not surprising, given the uncertain success of any new drug candidate.  Only one in every 5,000 products screened is ultimately approved as a new medicine; the others drop out because of concerns about safety, efficacy or profitability.  And only three in 10 of the drugs that are approved and marketed ultimately produce revenues that recoup their R&D costs. 

This state of affairs encourages drug companies to focus increasingly on financial blockbusters—usually treatments for chronic conditions that affect large populations—and to neglect products with more modest prospects, no matter how medically important or technically feasible.  And drug companies do develop too many "me-too" drugs, which differ little from earlier products, and spend disproportionately on promoting them. 

But in large part, these strategies are the result of the industry's being the victim of government policies, not the beneficiary.  Development costs have soared in recent years, despite more precise technologies for discovering, purifying, and producing drugs.  On average, it now costs more than $800 million to bring a drug to market (including both out-of-pocket and opportunity costs).  One important reason all but ignored in Dr. Angell's account: The highly risk-averse FDA keeps raising the bar for approval, especially for innovative high-tech products and technologies. 

Human gene therapy, immunotherapy tailored to individual patients and "biopharming" (the production of drugs in gene-spliced crop plants and animals)—all have been hit especially hard by the FDA's slow and burdensome regulation.  But Dr. Angell's prescription is for regulators to become even tougher and less "accommodating.”  ("There is now," she believes, "far too much emphasis on speed at the FDA.")  She asks that the agency require testing of new drugs not against placebos but against other drugs for the same condition, a far higher standard, and an inappropriate one: It would reduce the number of drugs and the availability of backup drugs approved—for example, for patients who might be allergic or otherwise intolerant to a first-line medicine.  Such a standard also fails to take into account that a drug approved for one purpose is often found later to have other uses. 

As for Dr. Angell's accusation that the industry has bought off the political process, history argues otherwise.  The companies have tended to defend the public-policy status quo instead of using their lobbying muscle for reform.  They squandered one opportunity, for example, in the mid-1990s, when Congress seemed willing to rethink the drug-approval process.  The industry lobbied for—and got—the toothless FDA Modernization Act of 1997, which left in place many of the FDA's worst excesses. 

Incensed at the industry's "lust for profits," Dr. Angell wants it "to be regarded much as a public utility," complete with price controls.  Does she not understand that free markets and competition help to discipline costs, stimulate innovation, and enhance the quality of the product on offer? 

Dr. Angell's tome is not enlightening.  Her diagnoses are wrong, and her cures are far worse than the disease.