InformEx: 5 min with Jeff Kiplinger 2016


Among the challenges the industry faces, which do you think are the most pressing?

These open ended questions always make me think in big picture terms, and for a scientist this means I’m probably beyond my expertise! I think we need to consider re-inventing an R&D based culture.  The pharmaceutical industry has fallen into a trap similar to Hollywood studios – blockbuster products are so valuable that we can’t really invest in properties that might only earn several hundred million dollars over their lifetime.  This has unbalanced the value equation between R&D effort and commercialization, and we’re ignoring long-term dollar benefits to human health in favor of focusing on profit margin. While it’s true that high prices encourage innovation, they also focus innovation only on the high-price opportunities.  The emergence of functional medicine points to wellness as a goal in addition to disease treatment.  Do we have an incentive to work towards wellness?

R&D vs Profit Margin

Photo courtesy of StockMonkeys.com(CC Attribution)

What do you believe are the most creative solutions?

It may be a non-starter these days, but national governments have a role they’re neglecting in directing corporate R&D toward wise choices.  It’s time to look at incentives, ground-up and based on long-term vision, that could help turn the industry from its present focus on a short-term profit goal. In terms of creative solutions, could we extend profitability through regulatory changes in such a way that innovative, speculative programs have higher value?  Offer more support to innovators in academia, contract R&D organizations, and institutes?  Eliminate some of the current tax incentives that make corporate restructuring more valuable than developing new products?

What should be the common goals within the industry and/or marketplace?

We need to redevelop our thinking about the value of ground-up R&D.  Too little value is placed on primary science and on long-term research.  The industry and the marketplace both count value in terms of what they can sell right now, based on market forces and not human health. 

When you think about scientists working on human health programs, their focus is on the value of treating and curing disease.  The market size and value for an approach that doesn’t yet exist is hard to determine.  If we look back 30 years at the drugs in development in 1986, an unmet need was defined more in terms of numbers of patients.  Now it’s the cost of development vs. profit margin. 

I’d say a common goal would be to swing the pendulum back a little bit, so that the human health component gets its due again.  The impact on the science side of the business would be immediate.