Strategy & Management

Devalued and Distrusted

The Biggest Challenges Facing the Pharmaceutical Industry, and how it can Restore its Broken Image

08.05.2014 -

A Pharma Veteran's View - Dr. John L. LaMattina is the former Senior Vice President of Pfizer, and President, Pfizer Global Research and Development. In this role, Dr. LaMattina oversaw the drug discovery and development efforts of over 12,000 colleagues around the world directed towards new treatments for diseases like cancer or AIDS. He retired from Pfizer in 2007 and is now a Senior Partner at PureTech Ventures and serves on the Boards of Ligand Pharmaceuticals and Trevena Pharmaceuticals. LaMattina has written the books "Drug Truths: Dispelling the Myths About Pharma R&D" and "Devalued and Distrusted: Can the Pharmaceutical Industry Restore its Broken Image?" Recently, he gave a webinar on the topic "Challenges Facing the Pharmaceutical Industry" on ChemistryViews.org, after which he shared his thoughts with CHEManager International. Jonathan Rose and Dr. Michael Reubold asked him about the changes and challenges he has seen in the pharma industry during his three-decade career at Pfizer and since.

CHEManager International: Dr. LaMattina, in what ways have you seen the pharmaceutical industry change over your three-decade career at Pfizer and since?

J. LaMattina: The changes have been very dramatic. Mergers and consolidations have resulted in many of the companies that I applied for job at in 1976 are no longer in existence. When I began at Pfizer in 1977, the pharmaceutical industry was highly fractionated with probably close to 100 different companies looking to discover and develop new drugs. The industry has consolidated greatly since then. However, the biotech industry has developed since the 1970s and literally hundreds of these small companies exist today.

More important, however, have been the breakthroughs in science - e.g. the unraveling of the human genome and advances in laboratory capabilities - that would have been seen as pure science fiction when I started. I am envious of the young scientists starting out in drug discovery today. This is a much better time to do drug R&D than it was when I started decades ago at Pfizer. The immense amount of knowledge now available about biological processes and diseases have provided new insights as to what projects to attack in the lab.

What do you think are the biggest challenges facing the pharmaceutical industry today?

J. LaMattina: First, the challenges in bringing to market a new medicine are harder than ever before. Of course, you have to prove to the FDA that your drug is safe and efficacious - as well as show that it is at least as good as other drugs out there that are already being used to treat the disease your drug targets. To prove this, you need to run clinical trials involving thousands of patients for at least 3-5 years. Such studies add not just time, but also costs as these types of trials can cost $300-800 million. This is a major change. There are tremendous new hurdles in clinical development that didn't exist years ago. But just as big a hurdle is generating the data necessary to show the value of your new drug to payers. Given the great drugs that have gone off-patent in recent years, you had better be able to show major improvements over existing therapy, otherwise your expensive new drug won't be reimbursed.

Second, it's imperative for the pharmaceutical industry to improve its image and reputation.

In recent years an increasing number of drug candidates fail in clinical trials. What are the reasons for this declining success rate?

J. LaMattina: There is no doubt that a higher percentage of drugs are failing in late-stage clinical trials. A recent paper in "Nature Biotechnology" showed that from 2003 to the end of 2011, 40% of drugs that entered Phase 3 failed to reach the market. The major reasons are the hurdles described before. Many times, the only way to prove that your compound is truly superior to existing therapy is to demonstrate it in clinical trials. What we are seeing is that this is a tough hurdle and a lot of compounds don't clear it.

What is the most significant misconception the general public has about drug companies?

J. LaMattina: The biggest misconception is that drug companies are not innovative and that most innovation occurs in research institutes, universities and biotechs. This is completely false! Major new drugs have been and will continue to be discovered in-house in Big Pharma. Furthermore, the public doesn't understand that, while great science is done in academia, it is the biopharmaceutical industry that discovers and then tests the experimental drug to prove or disprove medical hypotheses. Nowhere else is this done!

My personal opinion is that people have no clue about the value that pharma companies bring to the healthcare system, how difficult drug R&D is, and how much money an effective pill can save on overall healthcare costs.

How would you describe the image the pharmaceutical industry has in the public compared to other sectors and how has this image changed over the past decades?

J. LaMattina: In the late 1980s and early 1990s, the big pharmaceutical companies were routinely listed as among the most admired companies in the world in Fortune Magazine's annual survey. In fact, Merck & Co was THE most admired company in the world for seven straight years. This same survey now shows few pharmaceutical companies in the top 50.

What do you think are the reasons for this development? Are they "home-made" or is the pharmaceutical industry treated unfair by its critics or by politicians?

J. LaMattina: I think that there are a number of reasons for this. First of all the overaggressive selling of drugs for diseases for which they have not been approved has led to the settling of lawsuits in the billions of dollars. This has certainly caught the public's attention.

Second, there have been some high-profile issues of drugs causing unanticipated side-effects resulting in public distrust. It must be noted that all drugs cause side-effects and I think that the public's expectations are way too high on this point.

Also, I don't think that TV ads have helped Big Pharma. The laundry list of side-effects announced in every such ad - which can at times take up 30 seconds of a 60 second commercial - reinforces the public's concerns about the safety of new drugs. Furthermore, people perceive that these ads are expensive and these costs help to drive the high cost of new medications.

That's an interesting angle. Is this typical for the U.S.? Do you see regional differences when you compare the image of the pharmaceutical industry in the U.S. with Europe, Asia or other parts of the world?

J. LaMattina: No. I think that the negativism exists in Europe as well. It may be less in Asia.

So, when you think of the pharmaceutical industry as a patient who has a disease or deficiency syndrome, what would your prescription look like?

J. LaMattina: First, I would recommend stopping the illegal detailing of drugs, and second, stopping the TV ads. Third, make all clinical trial data available in a timely fashion, and fourth, make all payments by pharma to healthcare professionals completely transparent. Finally, use scientists as ambassadors for their profession.

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