The news last week that Novartis is cutting 2,000 R&D jobs in Europe and the US to offset reductions in drug prices leaves the future of drug discovery uncertain. The move by Europe’s second biggest pharmaceutical company follows Pfizer’s announcement in February to close its R&D department in Kent with the loss of 2,400 jobs.
Novartis’ action is “part of a pattern” of big pharma cutbacks, says Professor David Fox, Science Associate at the Royal Society of Chemistry. “Novartis are behind the trend in terms of shifts, we’ve seen it with GSK (GlaxoSmithKline) and Pfizer… it’s a symptom of industry fragmentation.”
Open Innovation
Developing a new drug costs hundreds of millions of pounds, with only one in every ten thousand compounds discovered making it to market. The time it takes to produce a single drug can be upwards of seven years.
Investment into research and development reached a record $67.4 billion in 2010 but the number of drug applications and approvals has dropped from 26 in 2009 to 21 last year.
Researchers and industry leaders stressed the need for open innovation in a debate around the future of medicine at King’s College, London last week.
The pharmaceutical industry depends on patent protections to recover the cost of research and secure future funding. As a result the industry is defensive over its intellectual property (IP). This prevents companies working together to provide medical solutions in a shorter timeframe.
R&D from big pharma is responsible for almost all of the 300 drugs on the World Health Organisation’s Essential Drug List. Production of these drugs would not be possible without patents.
Profit Drive
In the past decade there has been a fall in the manufacture of “blockbuster” drugs – products that provide a dramatic change in medical treatment and generate billions of dollars for pharmaceutical companies.
“Over the last ten or fifteen years we’ve come to accept incremental benefits… at non-incremental prices,” says James Peach, Director of Stratified Medicine at Cancer Research UK.
Gone are the days when the invention of a new drug can be attributed to one person. Beta-blockers were invented by Sir James Black in 1958. Considered to be one of the most important contributions to pharmacology in the 20th century,
Research into one of the most commonly prescribed medications – antibiotics – has produced only three classes in 40 years. Cyclic lipopeptides and glycylcyclines were invented in response to increased bacterial resistance, and oxazolidinones are used as a last resort to treat MRSA (multidrug-resistant Staphylococcus aureus)
Pharmaceutical companies cite factors such as cost, the difficulty in establishing market dominance, and the insignificant financial return for the slow pace of antimicrobial development.
For organisations that are not used to working together, charities can be a catalyst. Non-profit organisations can provide start-up capital for projects that may not pay off in the future. Working with charities means companies are not “checking their wallets on the way out”, says Peach.
In a recession-hit global economy the need for open innovation is, Fox believes, paramount to the pharmaceutical industry’s success. “Institutions don’t have the capacity for separate research,” says Fox, “There needs to be a new model of partnership.”