[Ip-health] FT: Drug research needs serendipity

[Rohit Malpani]

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Drug research needs serendipity

By David Shaywitz and Nassim Taleb

Published: July 29 2008 19:42 | Last updated: July 29 2008 19:42

The molecular revolution was supposed to enable drug discovery to evolve
from chance observation into rational design, yet dwindling pipelines
threaten the survival of the pharmaceutical industry. What went wrong?

The answer, we suggest, is the mismeasure of uncertainty, as academic
researchers underestimated the fragility of their scientific knowledge
while pharmaceuticals executives overestimated their ability to
domesticate scientific research.

For all the breathless headlines proclaiming breakthrough discoveries,
the truth is that we still do not understand what causes most disease.
Even when we can identify a responsible gene or implicate an important
mutation, we have made only limited progress in turning these results
into treatments.

Medical research is particularly hampered by the scarcity of good animal
models for most human disease, as well as by the tendency of academic
science to focus on the "bits and pieces" of life - DNA, proteins,
cultured cells - rather than on the integrative analysis of entire
organisms, which can be more difficult to study.

Nevertheless, real scientific progress has occurred, inviting the
question: why do pharmaceutical companies, which spend billions of
dollars each year trying to turn advances into treatments, have so
little to show for their efforts? Answer: spreadsheets are easy; science
is hard.

Like most corporations, pharma companies seek to identify the largest
markets they can find and develop products for these customers - an
approach quite sensible in theory, but less so in practice. First, drug
sales are notoriously difficult to foresee even at the time the medicine
hits the market, so predicting sales a decade or more ahead of
registration, when the research and development process typically
begins, is generally a fool's errand, yielding more false precision than
true insight. Yet much of contemporary pharma R&D is driven by this sort
of rigid planning.

Second, the process of drug development is also very difficult to
predict, because of both our limited understanding of disease and our
inevitably imperfect understanding of the effect any new compound will
have on the body. While design played a pivotal role in the development
of effective HIV drugs, other modern medications were discovered in the
old-fashioned way: by accident. Viagra, for example, was originally
developed as a treatment for chest pain.

In the face of declining productivity
<http://www.ft.com/cms/s/ab1b624e-1c8d-11dd-8bfc-000077b07658.html> ,
pharma companies have been trying to boost output by increasing
efficiency, narrowing their focus to a handful of disease areas,
shelving safe but ineffective compounds without fully exploring their
scientific potential and trying to ensure that each project the company
is working on is carried out with a clearly defined market segment in
mind. Unfortunately, for new medicines in particular, this strategy
often fails significantly to reduce exposure to negative uncertainty -
all the bad things that can happen during drug development - and
eliminates much of the exposure to positive uncertainty (serendipity)
that remains so vital.

So intent are managers on maintaining focus that important opportunities
for novel discovery are lost, as is the intellectual space for tinkering
and capitalising on the chance observations and unexpected directions so
important in medical research. Instead, pharma executives are creating
an ever-more-rigid environment and then wondering why their productivity
is going down, and why they have such difficulty attracting and
retaining talent.

Fortunately for patients, hope may lie just round the corner. As pharma
companies cut costs by outsourcing large parts of their operations,
service providers have sprung up around the world to fulfil these
functions. This is good news: while the pharmaceutical industry is ripe
for disruptive innovation, the barriers to entry have been far too high
for anyone new to break through. If the trend to outsourcing continues
and if the main competence of pharma companies becomes (as some have
suggested) simply their ability to orchestrate the entire process, it is
not difficult to imagine that an innovator - particularly an innovator
with a greater appreciation of the nuances of science - might be able to
do this a lot better.

The next-generation pharma company will create a lean, agile
organisation able to capture, consider and rapidly develop the best
scientific ideas in a wide range of disease areas and aggressively guide
these towards the clinic. Small market size will not deter their pursuit
of promising drugs with a clear and comparatively inexpensive path to
clinical development; their ideal portfolio will consist of an extensive
collection of such molecules, cheap options that may offer unexpected
benefit to patients and provide disproportionately large returns to
investors.

If pharma companies want to stay in the game, their leaders will need to
resist the false comfort of revenue predictions and valuation
spreadsheets, and instead resolve to look uncertainty in the face,
acknowledge its presence and embrace the opportunity it represents.

David Shaywitz, a physician-scientist, is a management consultant in New
Jersey; Nassim Nicholas Taleb is author of 'The Black Swan: The Impact
of the Highly Improbable' (Penguin, 2007)

Copyright <http://www.ft.com/servicestools/help/copyright>  The
Financial Times Limited 2008