Chapter 1
Introduction: Drug Discovery In Difficult Times
Malcolm MacCoss
At the time of writing (mid-2011), the pharmaceutical industry is facing probably its most difficult time in recent history. As little as a decade ago, the fact that the aging population in the Western world was increasing (i.e., the post-War baby boomer population was reaching retirement age and thus moving into a demographic that requires the use of more medications), coupled with the likelihood of worldwide expansion of modern medicine into large populations of developing countries, led to an assumption that this would move the industry into a golden era of drug discovery and commercial growth [1]. This was expected to be supplemented with the promise of the utilization of the fruits of modern molecular biology and genomics-based sciences following the completion of the Human Genome Project [2, 3]. However, despite large increased investments by pharmaceutical companies in research and development (R&D), the number of new molecular entities (NME) approved by the U.S. FDA has not increased at the same rate as the increase in R&D investment [4]. This lack of productivity in the pharma R&D sector has been much analyzed and continues to be a topic of great concern and discussion both within and outside the industry [1, 4â13], and ex-heads of research and development at major pharmaceutical companies have joined in the discourse [5, 6, 8, 14, 15]. In addition to this lack of productivity, we now find the industry under attack from a number of directions, and this has led to a dramatic reduction in the pharma workforce, at least in the Western world. In fact, since 2000, according to Challenger, Gray, and Christmas, as reported in Forbes [16], the pharmaceutical industry has been under such stress that it has cut 297,650 jobs, that is, about the size of the current Pfizer, Merck, and GlaxoSmithKline combined; thus, the manpower equivalent of three of the largest pharmaceutical houses in the world has been eliminated in a decade. Various mergers and acquisitions, driven by commercial and economic pressures, have led to eradication of a number of well-established pharmaceutical houses that for decades had provided the world with numerous life-saving and quality-of-life-enhancing medicines. The industry that was, for most of the past two decades of the twentieth century, the darling of Wall Street, with Merck, for example, being âAmerica's Most Admired Companyâ for 7 years in a row, is now under major duress.
So what has gone so badly wrong with this once booming industry? This has been the subject of many editorials, publications, and blogs that are too numerous to mention here, but it all really stems from the coming together of a âperfect stormâ of events and an industry that, apparently, was unprepared for the evolving situation.
Patent expirations, in particular, have become an issue for an industry that has been driven by a business model based on blockbuster drugs (generally considered to be a drug molecule that brings in more than $1 billion per year in sales). However, one result of this model is that the revenue created by a blockbuster drops dramatically overnight when the patent exclusivity expires and generics are allowed to enter the marketplace. This phenomenon, of course, is not new, but what is different now is that in the business model driven by one or two blockbusters per company rather than by a larger number of mid-sized products, the loss of a blockbuster has a much greater impact on any particular company. The research and development divisions of pharmaceutical companies have not been able to produce new replacement products for compounds going off patent in the time frames that the blockbuster products they are replacing have exclusivity in the marketplace. This issue is exacerbated by the increasing cost of research and development [4, 5] and, in addition, the time frame that the first-in-class molecules are on the market before the âfast followersâ or later entrant âbest-in-classâ molecules are approved for marketing is rapidly shrinking [5]. This problem has been noted for years. I well remember, in the mid-1980s when I had recently joined the industry, being told by high-level research managers that it was necessary to have a follow-up blockbuster already in place in the late-stage pipeline before the original one was approved, as this seemed to be the best approach to dealing with this conundrum. But the limitations of this approach are readily apparent. First, it is not clear that it is possible to predict with any degree of exactitude which project will lead to a blockbuster and which one will not. The time frame from initiating a project to the launch of an NME from that project is so long that much can change in the biomedical science environment and in the regulatory and commercial space during that period. Thus, companies have had to rely on bigger blockbusters at the expense of working on medicines for some diseases that were likely to bring in less revenues to the company â the inevitable spiral is then started, with more and more effort being put into products based on their commercial viability rather than on the unmet medical need that has driven the industry, and which has served it so well. In a speech made to the Medical College of Virginia in 1950 [17], George W. Merck made this famous comment, â. . . We never try to forget that medicine is for the people. It is not for the profits. The profits follow, and if we have remembered that, they have never failed to appear. The better we have remembered it, the larger they have been . . . How can we bring the best of medicine to each and every person? We cannot rest till the way has been found, with our help, to bring our finest achievement to everyone. . .â Recent trends in the industry (with some notable exceptions) suggest a drift from this mantra.
But the demise of the blockbuster business model is certainly not the only driver of the present situation. Some companies have attempted to overcome the problem of stagnant pipelines by acquiring, or merging with, other pharmaceutical companies that had, apparently, a more robust array of later stage products. The trouble with this approach is that the respite is at best temporary, and the merging of different corporate cultures has usually taken much longer to sort out than even the pessimists had predicted. In addition, there are an inevitable number of lay-offs (as already pointed out) that occur due to redundancies and overlaps in the merging of two large organizations, and such cost cutting is at least partially a result of the need to show a stronger balance sheet after the merger. Each of these acquisitions has left the preponderance of leadership and middle management in the new organization coming from the original company that had the deficient pipeline. It is not always clear whether the reasons for that deficiency had been fully understood â thus, eventually leading down the line to another pipeline crisis and leaving the true problem(s) unsolved. At best, these mergers have bought some time for the company making the acquisition, but several studies have questioned whether in the middle-to-long term they have provided a solution or even whether they have given rise to a stronger and more robust company than what would have been the case if the merger had not occurred and the two companies had progressed independently [4, 18]. Altogether, this has resulted in a longer downtime for productivity in the research operations of the new organization than expected and, in particular, the effects on morale have been devastating. How this has impacted the innovation effort is difficult to quantify, but it has to be considerable. It is generally considered that innovation, particularly innovation that often takes years to mature in the extended time lines of drug discovery, needs a stable and secure nonjob-threatening environment to allow appropriate risk taking for the great discoveries to occur. The insidious low morale seen in many pharmaceutical research organizations now makes it very hard for even the most motivated drug researcher to put in the extra hours that were once commonplace and which are often necessary to produce hand-crafted molecules with the right properties to be drug candidates for human use. The loss in productivity of this lost extra time investment is impossible to calculate, but it must be huge.
In the midst of all of this turmoil, companies have been desperately trying to reinvent themselves and to understand why the productivity of their research endeavors has been so poor. All the major pharmaceutical companies have undergone much introspection leading to reorganization and revamping of the way they do things. Mostly, this has been driven by two goals: first, to pinpoint excesses and overspending in their operations and to eliminate them, and second, to highlight better ways of carrying out their operations to become more efficient and streamlined so that they can get to the finish line faster and with a better potential product [19]. Both of these are perfectly laudable and appropriate goals. Unfortunately, it is difficult to quantify precisely the elements that go into making an innovative and creative research environment. These two goals are driven by hard numbers, and Six Sigma-type methods have been extensively used to quantify and then to drive all the excess spending out of the system to give a lean, flexible work environment. Such an environment requires much attention to the process involved and thus a close monitoring of the discovery process. While this undoubtedly has had the desired effect of reducing costs, it is very unclear whether it has at the same time improved the productivity of the research groups. Much innovation and true problem solving goes on âunder the radarâ and emerges when sufficient information has been gleaned to qualify it for consideration. Unfortunately, this is difficult to justify in the process-driven environment described above. True innovation does require pressure to deliver on time lines, but it also often requires individual freedom to operate and for everyone to live with the consequences. Often, innovation is also enabled by some amount of extra resources over the strict minimum calculated by methods mentioned above to allow researchers to follow-up on unexpected findings.
Any evaluation of a complex research environment requires that the entire operation be broken down into numerous smaller categories, with each of these being closely interrogated. It is often the way these operations are flexibly integrated at the macro level that determines the overall productivity of a complex organization â not necessarily the optimization of the specific parts. Nevertheless, the current paradigm is to break down the drug discovery process, up to the delivery of a candidate for toxicity testing, into target identification and validation, hit identification, hit-to-lead, lead optimization, and candidate selection. It is fair to say that this is a relatively new consideration. A decade ago, it was considered one continuous process with much overlap of the above-mentioned categories. This continuous operation gave a certain amount of autonomy to the scientists involved and certainly gave ownership of projects to the project team members. The more recent breakdown of the drug discovery process into its constituent parts has led to smaller companies being able to specialize in various elements of the overall endeavor, and nowadays the use of specialist contract research organizations (CROs) for various parts of the process is commonplace. A decade ago, such companies would have been based in the United States or Europe and were used primarily to prepare chemical libraries in new areas of research or to supplement in-house research to help with load leveling within the internal operations. However, the past decade has seen a dramatic shift of the preparation of chemical libraries (to supplement and diversify internal repositories that tend to be a footprint of previous in-house programs) to CROs in the emerging nations of China and India where a highly skilled workforce, supplemented by a scientific diaspora of Chinese and Indian scientists trained in the West and returning home, was able to take on these tasks at a reduced full time equivalent (FTE) rate lower than in the United States or Europe. The explosion of science now being witnessed in this area has become transformative, with all companies now associated in some way with out-sourcing of some elements of their research operations. Many consider that the big winners of the future will be those who are the most successful at this venture, and some major pharmaceutical companies have relocated entire research groups and/or therapeutic areas to China or India. This âoutsourcingâ has greatly increased the complexity of research operations and the operational landscape has changed overnight. The planning, oversight, and monitoring of drug discovery programs with parts of the work going on in different regions of the world, in distant time zones, and sometimes with language issues, has become a huge factor in any pharmaceutical company. Thus, the deep discussions on the last day's results over coffee after work in a close working laboratory environment with friends and colleagues has been replaced with late-night (or early morning) teleconferences with specialist scientists one might never get to meet in person. It remains to be seen if this sea change in the way we do research will be appropriately productive in the long run, but certainly in the short term, because of the financial savings involved, it is a process now taken very seriously by management in pharma operations. My own view is that it will all depend on whether this can deliver the quality drug candidates necessary to sustain the growth of the multibillion dollar pharmaceutical companies, and the ones that will be the most successful are those that will blend the appropriate skill sets of their CRO colleagues with the in-house skills to get the job done quicker and cheaper than it was done previously. But costs in China and India are already starting to rise, and there is always, even in today's electronic world, an issue of turnaround time in the iterative âdesign â synthesis â assay â redesign â synthesisâ drug discovery cycle that is so much an important driver of the productivity and speed of delivery of drug candidates. This point is being addressed now by âfull-serviceâ CROs in India and China that are taking on more and more of the early biochemical and biological assays as well as the chemical synthesis, thus, shortening the iterative cycle by having the full cycle performed on the same site.
Of course, there are several other elements to the âperfect stormâ that has hit the industry. Certainly, since the voluntary removal of Vioxx from the market because of cardiac issues, there has been an intense scrutiny of other drugs that have been introduced, particularly with regard to cardiovascular ...