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Jewish World Review April 25, 2002 /14 Iyar, 5762

Mort Zuckerman

Mort Zuckerman
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Consumer Reports

A critical tipping point | So many emotions collide as we take our daily pills. There is gratitude that our maladies can be treated so easily and efficiently with medication. But feeling better, we fret about the cost. Then, suspicions fester that the pharmaceutical industry must be taking too much in profit. It isn't, in fact. The real cause for anxiety, instead, is that bringing new drugs to market costs so much and takes so long that more and more Americans are being deprived of hard-won advances in medical science.

The drug companies face tough times for two reasons. First is the cost of clinical trials required by the Food and Drug Administration. Today, roughly 40 percent of the $30 billion the 20 top drug companies spend on research and development goes to clinical trials. Second, the profits to meet such costs are being eroded because their patents are expiring. Patents for mechanical instruments extend for generally 18 to 20 years; for drugs, patents have a life span of just 12 to 14 years. That's because patent licenses begin when a new drug is registered, before it can win FDA approval and start earning back its investment.

And approval is hardly a given. Eight of the top 15 drug companies did not get the go-ahead for a single drug last year. In 1980, drug companies spent some $2 billion on R&D, and 34 new drugs were approved. Last year, the drug companies spent close to $30 billion, but only 24 drugs were approved. It is costing lots more, in other words, to get much less. And even those drugs given the all clear by the FDA don't pay their way. Seven of 10 of the drugs approved by the FDA never make enough money to even justify their development costs.

This is no small issue. Getting through all the phases of clinical trials typically required for approval of a new drug can run anywhere from $300 million to $800 million. No wonder the drug companies want to improve the process. Drug costs, it is true, are increasing by about 18 percent a year. But only 4 percent is due to price increases. The rest is the result of replacing older, more invasive, expensive, and less effective medical treatments-a tradeoff, in other words, of modest cost for better medicine.

Faster, smarter. The FDA reviews are essential, but they must be better managed. Given that the agency still lacks a new chief, it exhibits the tendency in every bureaucracy without leadership: Its first priority is to avoid problems. Yes, some biotech companies present sloppy and incomplete drug applications to the FDA. And yes, such applications routinely run to 100,000 pages or more. But the fact remains that the process for bringing new drugs to market has become much too long and cumbersome. Information requests from the FDA often lack clarity, and the level of technical expertise of FDA reviewers sometimes falls short. The result? Since the 1960s, the approval time for new drugs has increased from approximately eight years to more than 14, dramatically increasing the cost of each new pill that comes to market. That's just not right. The FDA and the drug companies must find ways to reduce the period from synthesis of a new drug to its sale to consumers-without sacrificing quality. In Europe, this process is much faster and efficient. That's why some of the best new drugs today are available abroad but not here.

How to fix a system so obviously broken? For starters, the FDA must raise salaries and hire additional reviewers. It makes no sense to increase the budget of the National Institutes of Health by $2 billion with the purpose of encouraging new drugs while leaving the FDA's budget inadequate to review these drugs for qualification. In fact, what this does is threaten to bog down the review process even more.

Democrats in the Senate are unwilling to approve anybody for the FDA's top job who has any experience with the drug industry. This is just shortsighted. There are plenty of people in the drug industry who understand the process and have the ethics to be fair-minded and objective. In fact, it is an understanding of this process that makes a background in the drug industry such a big plus. That kind of knowledge would allow a new FDA chief to accelerate the reviewers' work without diminishing the quality of their reviews. Ted Kennedy, the chairman of the Senate committee now objecting to an industry designee, might recall that his father, Joe Kennedy, was appointed the first head of the Securities and Exchange Commission precisely because he understood how the financial markets worked.

The costs of a mandated clinical-trial process should, as a matter of fairness, be reflected in the cost of the drugs approved. But it is important to all of us-pill takers today and tomorrow-that the pharmaceutical companies maintain sufficient profitability to sustain the pace and quality of the advances that have made such an enormous difference in the quality of life of so many Americans.

JWR contributor Mort Zuckerman is editor-in-chief and publisher of U.S. News and World Report. Send your comments to him by clicking here.


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04/13/99: The Evil of two lessers

© 2001, Mortimer Zuckerman