An Industry In Transition

"For all the benefits they bring, the pharmaceutical industry's biggest companies . . . increasingly face a conflict between the goals of corporate wealth and public health." So says the blurb on the cover of "Big Pharma: Exposing the Global Healthcare Agenda," a 2006 book by Jacky Law, a pharmaceutical journalist.

The statement echoes what industry insiders themselves say: The pharmaceutical industry has lost sight of its mission; it is being far more influenced by Wall Street than the public's need for safe, effective, and affordable medicines. That's how Paul J. Reider, vice president for chemistry research and discovery at Amgen and a member of C&EN's advisory board, characterized the state of the pharmaceutical industry at a gathering last year of C&EN advisory board members and staff.

The indictment is harsh; yet it embodies esteem and deep concern for an industry that once enjoyed almost universal respect and admiration, especially among people whose own lives or those of their loved ones have been saved or made better by the wondrous works of drugmakers.

That time seems so long gone. Commanding the headlines now are approved drugs proving unsafe, companies depending more on marketing than science, people becoming seriously ill in clinical trials, prices soaring beyond the public's comprehension, and companies making deals to bar entry into the market of more affordable versions of off-patent drugs.

The industry's problems came into sharp focus in 2004, when Merck withdrew its blockbuster arthritis drug Vioxx from the market. Merck is now faced with numerous lawsuits, many of which are premised on the view that the company withheld or ignored information about the drug's risks to maximize the drug's use and thus sales. Merck is vigorously defending itself but so far with mixed success.

Merck is not alone in having to face the fallout of drugs turning out to be harmful. AstraZeneca, Johnson & Johnson, Sanofi-Aventis, and Wyeth are also under scrutiny, and the perception of an industry in trouble persists. It is compounded by consistently low numbers of new chemical entities from drugmakers in recent years and criticisms that the Food & Drug Administration is ineffective in ensuring the safety of drugs in the market.

Against this backdrop, C&EN asked the question: Where does pharma go from here? And to answer that question, C&EN deployed three of its most experienced reporters to examine key facets of the industry and how things might shake out within the next decade. What they found is described in the following pages.

Senior Editor Rick Mullin examines how the industry will evolve from its current business model based on blockbusters. Mullin explores the following questions: What is the alternative to blockbusters? How will personalized medicine change the drug development paradigm? What will happen to expectations of the industry? How will the industry respond to growing public outcry over drug prices?

Mullin's reporting suggests an industry that's struggling mightily to be true to its mission while continuing to satisfy the lofty expectations of investors. There is no obvious alternative to blockbusters; companies instead are trying to meet earnings expectations through aggressive cost cutting and streamlining of R&D operations. These measures are encouraged by the ascendance of biotech companies, which have emerged as major sources of drug candidates and upon which traditional drug companies are increasingly relying for the content of their drug development pipelines.

On drug pricing, though, the industry is not budging, even though its primary defense of pricing, which is that its profits need to be high to cover the enormous cost and risk of bringing a drug to market, is not resonating with the public.

Senior Correspondent Stu Borman considers the process of drug discovery and development and how it could be made more efficient in light of new technology and emerging specialized fields such as genomics, proteomics, and systems biology. Across the board, Borman reports, companies are evaluating all phases of discovery and development—from lead identification and validation to clinical testing and manufacture—to eliminate bottlenecks and increase productivity.

Ironically, as researchers look to the latest in technology and techniques to find and develop safe drugs more rapidly and less expensively, Borman reports that the move away from some traditional practices and the rush to embrace unproven technologies may have contributed to the industry's current state of low productivity.

Senior Editor Bette Hileman examines how the regulatory climate in the U.S. is evolving. Her reporting indicates that Congress and FDA will likely be overshadowed by state governments in shaping regulation of drug safety, pricing, and marketing. States are taking the lead in requiring universal health insurance, in controlling drug prices and advertising, and in pressuring pharmaceutical companies for fuller disclosure of clinical trial results, Hileman finds. A disturbing trend, she reports, is the increasing tendency by pharmaceutical companies to carry out clinical trials in countries where participants are poor, illiterate, and easily can be abused and exploited.

Overall, the picture painted by Mullin, Borman, and Hileman is of an industry on the defensive but undeterred in its determination to win back the public's trust.

Meanwhile, Assistant Managing Editor for ACS News & Special Features Linda Raber, Associate Editor Corinne Marasco, and Assistant Editor Rachel Petkewich sampled a broader range of opinions about the industry's future for a special Web-only feature. They talked to people whose lives depend on, or whose livelihoods are affected by, the pharmaceutical industry and distilled the interviews into essays focusing on pharma's impact on real people. They solicited a wide variety of viewpoints, from chemical scientists working in the industry to pharma bloggers to a soon-to-be graduate of medical school to patient advocates.

The interviews poignantly reveal how the future of pharma is very personal to many people, who told C&EN what they hope—and sometimes what they dread—the future will hold for pharma. There is optimism, albeit tempered with stark reality, for many. For all, there is determination. These profiles aim to put a human face on pharma in this special issue.

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