The pharmaceutical industry is experiencing unprecedented late-stage setbacks, product recalls, and difficulties in generating
high-quality drug candidates. The problems are not specific to any one company or research effort but rather a result of the
industry's limited knowledge of biology and chemistry. (See "Depth of the Problem," page 47.) Therefore, a key challenge is
the industry's ability to transition to "new biology" -- genomics and proteomics -- which seeks to understand the causes
of diseases through their biological structures and functions at the cellular level.
Those problems raise fundamental questions about the core of the industry's future:
- How can the industry accelerate the validation of new drug targets?
- How much will it cost and can companies afford to do it alone?
- Should pharma companies shift focus and resources from small-molecule drugs to biotech products?
- How much should a company invest in R&D to remain competitive?
Running Out of Targets The pharma industry typically navigates through narrow straits defined by:
- the number of validated drug targets -- currently about 500, mostly receptors and enzymes
- the number of chemical entities suitable for use as pharmaceuticals: the US Pharmacopoeia lists only about 9,500 compounds
that have survived safety testing through Phase I
- the economics of bringing new drugs to market.
Despite the excitement surrounding the Human Genome Project and other recent breakthroughs, the number of validated targets
has not increased significantly. Carbohydrate-like targets or phospholipid signaling systems could yield new drug targets
but are beyond R&D's reach because of their complex chemistry. Companies are already using many of the simpler and well tolerated
chemicals and are now faced with the challenge of using the remaining chemicals, which are structurally more complex, bigger,
and not as well tolerated. Additionally, the increasing demands from physicians, consumers, managed care companies, and regulators
have also raised the bar for new therapies.
Productivity Gap
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To get out of the eye of the storm and into calmer waters, pharma companies must simultaneously improve the efficiency and
effectiveness of the small-molecule R&D process, expand the scope of R&D endeavors, redistribute research expenditures, and
change the organizational and financial risk-reward model to fund a broader portfolio. They must also align investor expectations
with lower productivity during the next five to ten years.
New Game Plan The industry has begun to expedite drug development and discovery through redesign and the introduction of new technologies
such as interactive voice response for clinical supply chain management, remote/electronic data capture for clinical trials
management, high-throughput screening, and predictive toxicology assays. Pharma companies should continue to aggressively
take advantage of new technologies, but they cannot counteract the inherent limitations of the current R&D model. On the other
hand, investments in biology predictive software, combinatorial chemistry, and screening technologies have the potential to
extend the use of already validated targets.
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