A few comments on Bernard Munos’ solution for the pharmaceutical industry’s woes…Posted: August 3, 2011 Filed under: Strategy Leave a comment
Matthew Herper’s “The Medicine Show” blog on Forbes.com has a new series of posts on fixing pharma’s R&D machine. One post in particular caught my eye, “Seven Steps to Medical Innovation”, which lists Bernard Munos’ strategic plan to fix what ails pharma. Munos came up with this list from his observations during a 30 year career in sales at Eli Lilly and his own personal research on the issue (more on Munos here).
Let’s take a look at the list…
1. Regain the trust of physicians, regulators and payers.
I can’t argue with this point. Pharma has a bad reputation among all of these constituents, physicians most of all. A friend recently did a sales rotation and he said the tension (with many, but not all physicians) is palpable. For the most part, they would prefer to never see another sales rep again, but they do, mainly for the free samples. Many physicians are quite cynical about anything big pharma companies say and are always looking for the “catch”, assuming that drug companies have no qualms about bending the truth to increase sales. Improving the reputation of drug companies probably wouldn’t go far in fixing the R&D problem, but it’s an important goal, nonetheless.
2. Stop chasing blockbusters, which help lots of people a little bit, and start chasing breakthroughs, which help patients a lot.
Hmm… not so sure about this one. Blockbusters “help lots of people a little bit”? I think one could argue that the statins have helped lots of people a lot. Just take a look at the long-term clinical trials and the reductions in cardiac events and death. Norvasc? Enbrel? Blockbusters too and huge steps forward in treating hypertension and arthritis, heck one might even call them “breakthroughs”.
3. Do what works. Stop trying to manage drug discovery with Six Sigma processes.
Not sure how helpful “do what works” is, since if companies knew what worked, they’d probably be doing it. However, I can throw my support behind the disdain for big pharma’s attempt to industrialize R&D. I won’t say anything further on it, since it’s a widely recognized issue and has been commented on many times.
4. Lower costs with collaborative research.
Hmm… again, not so sure about this point. I can agree that collaborative research has a lot of positive aspects: access to experts who are familiar with the nuances of a biological target, access to creative thinkers who don’t come from big pharma, etc. However, I’m not sure how much it will reduce costs. The expensive part of R&D is the “D” part and the numerous clinical trials that are run (I’ve seen numbers that breakdown R&D costs about 1/3 “R” and 2/3 “D”). Doing the pre-clinical work (where most collaborations occur and discoveries are fleshed-out) isn’t what’s driving up R&D costs.
5. Mitigate risk by developing lots of potential breakthroughs, not by trying to develop projects that seem low-risk. History says the risk is never low.
6. Don’t move anything into human trials unless it is a potential breakthrough.
I’m combining these two points because I think they are related. I have a problem with Munos’ argument that developing lots of “potential breakthroughs” mitigates risk. What is the risk he speaks of? In R&D terms, it’s investing money in a project that fails to generate a positive return. The problem with his point is that even if you developed a lot of “potential breakthroughs”, they are just that potential breakthroughs. What makes or breaks a new drug are the clinical trials which is where most of the risk (and cost) lies. Pharma companies have plenty of “potential breakthroughs” (just listen to any pipeline presentation), what they don’t have is the money to send each one through the gamut of clinical trials. So choices have to be made. If Munos is arguing that the choices should be in favor of “potential breakthroughs” versus low-risk, incremental improvements, he’ll get no argument from me.
7. Cut research and development.
If nothing else, Munos knows how to get people’s attention, and I think that was the purpose of how this point was worded. Delving a bit deeper, Munos suggests that pharma companies should cut their R&D by outsourcing it to small, independent research labs that don’t suffer from the “big pharma” mentality. This is already happening to some extent through the academic collaborations that almost every big drug company has (or is planning to) set up. Munos argues that this should go further and that big pharma should open up their R&D organizations to the outside, offering up their internal resources to outside researchers. Pfizer plans to do this with their academic collaborations where they provide access to internal Pfizer technology. It will remain to be seen how beneficial it is.
So what’s the verdict? Munos makes some good points, but is a little lean on the details. My biggest concern is that this is being pushed as a “solution” to the problems of big pharma R&D and reeks of “if only these companies do X, Y and Z, everything will be better.” It’s that sort of thinking that got big pharma into the mess it is in today, with a top-down approach to R&D management. However, I do commend Munos for trying to change the system, because it certainly does need to change.