What's In Store For BioPharma R&D In 2015?
By Anna Rose Welch, Editorial & Community Director, Advancing RNA
How the industry is tackling R&D these days is a hot topic, if traffic on this site is any indication. Last year, we posted a short feature about Lupin’s initiative to launch two new U.S. R&D centers. Looking at some numbers this week, it is still one of the top performing pieces on Bioprocess Online, which suggests to me the industry is itching to learn how companies are investing in the continuation of their pipelines.
But companies aren’t the only ones invested in this. Recent headlines have boasted about several government initiatives that might prove to be influential — or at least could get the gears turning — on the shape and prominence of R&D in the years to come. These are the Precision Medicine Initiative, the 21st Century Cures initiative discussion draft, and Senator Elizabeth Warren’s proposal that law-breaking drug makers pay 1 percent of their blockbuster profits to the NIH to use for research.
So far, Obama’s Precision Medicine Initiative and the 21st Century Cures initiative have earned industry approval, while Warren’s proposal for the bill, borne out of her “populist ire,” has not won any favor. Indeed, it immediately elicited the disapproval of PhRMA, which called it a “misguided policy” because of its potential to divert funds from companies’ R&D programs.
I think at the very least, if it were to pass (of which even Warren herself is skeptical), it could be a possible start at fixing pharma’s image problem in the eyes of taxpayers — which will be one of many steps to tackle in the fight for a patient-centric industry. For instance, the more donated for R&D, the higher the potential of new treatments being discovered and the better off (and happier) patients will be. However, because of concerns that this fine will likely lead to cuts in R&D programs for the companies affected, and because the NIH is not the sole and “ultimate source” of Big Pharma drugs/profits, it’s going to be hard to convince lawmakers and the industry this is the way to go for R&D.
News from last week suggests some of the Big Pharma players, as PhRMA asserts, are doing their part in R&D — at least in terms of R&D for late-stage products. Fierce Biotech recently reported that Novartis, Bristol-Myers Squibb, and Pfizer (despite previous criticism over R&D cuts) pushed a lot of money into their late-stage programs in 2014. Novartis shelled out $9.9 billion in 2014, Pfizer hit $7.2 billion, and Bristol-Myers spent $4.5 billion — all of which were big increases in R&D spending over 2013.
But there’s also early-stage work that needs to be done and many areas of unmet medical need that, while risky from a business perspective, are going to be key missions for pharma if helping patients is the end goal. Both Warren’s and the 21st Century Cures initiative are shedding some valuable light on the work and responsibilities of the NIH. While the NIH might not necessarily lead to Big Pharma blockbusters, the Institute does hit on less profitable, but important areas of research, Alisson Hoffman, a health care law and policy expert from UCLA, told Aljazeera.
Though pharma pipelines are hardly reliant on NIH discoveries, more funds for the NIH could indirectly boost pharma’s R&D, especially since we’re entering an age where Big Pharma is exploring new options for its R&D—one of which is snapping up developments from academia.
In an interview with Forbes, Brent Saunders, CEO of the M&A-goliath, Actavis, has identified this as the age of “a revolutionary new kind of drug company: ‘growth pharma’.” Why invent your own drugs when you can snap them up from biotechs and universities? (By the way, this guy had himself injected with Botox in front of 1,000 Allergan sales reps. I’d say he means business.)
If “growth pharma” inspires other companies in the industry to turn to universities to fill pipelines, the NIH becomes a bigger player in the grand plan of boosting R&D and filling pharma’s pipelines, as academic programs are often recipients of NIH funding.
According to the Chicago Tribune, academic research only accounts for 25 percent of new drugs, while biotechs and pharma carry the real weight. But a quarter of new drugs is still a significant percentage. Behind each drug are the faces and names of many patients. Where would these patients be without these new drugs?
Even if Warren’s proposal is, as the Tribune’s Megan McArdle calls it, just “a populist gesture aimed at tickling the fancy” of the public, there could be some weight to the argument the NIH should receive more industry funding. If the M&A trend is here to stay, as analysts are predicting, the NIH’s funding would more significantly affect the development of “growth pharma’s” pipelines.