Truths About Pharma

A new report out of the GAO sheds some useful light on that majestic pharmaceutical industry everyone's always talking about. The GAO was asked to look into the industry's trends because, despite R&D increases over the past decade, there's been a sustained drop in the number of genuinely new drugs being submitted to the FDA. The culprits? Well, among other things, entirely 68 percent -- more than two-thirds -- of the drug company's new applications are for "me-too" drugs, knockoffs of other company's blockbusters with enough molecular differences that they evade patent restrictions. Such spending, reports the GAO, is safer than socking money into so-called "New Molecular Entities," the drugs with the potential to offer new treatments. Going for new blockbuster drugs (drugs capable of generating $1 billion a year) or knockoffs of old ones is the easier road to profits.

Other culprits are a lack of qualified research scientists, technological hurdles, and the patent system, which allow for exclusivity on minor changes or new uses for old drugs, thus disincentivizing new research. All fair stuff. But this is an industry driven, as one would expect, by profit, not a desire to find awesome new drugs to better the world. That's for the good -- we need the pharmaceutical industry. But some better and more stringent bargaining by Medicare wouldn't harm things much, and if you channeled that money back into academic research -- and possibly created a new government pipeline through the NIH for translating molecular discoveries into drugs -- you could do quite a bit of good.

At Tapped, too.