[Ip-health] FT: Drugs groups told to rethink R&D spending

[James ARKINSTALL]

Excerpt
(Garnier) speaks out against the "marketing wars", helped by regulations
permitting drug advertising in the US, that have left companies with
"oversize sales and marketing machines" costing twice as much as the
amounts spent each year on R&D.

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Drugs groups told to rethink R&D spending
By Andrew Jack in London
Thursday Apr 24 2008 14:25

Large pharmaceutical companies must radically overhaul the way they conduct
research and development and sharply cut back their marketing activities in
order to survive, the outgoing head of GlaxoSmithKline will say on Friday.

In a challenge to both his own successor at GSK and the entire industry,
Jean-Pierre Garnier, who retires next month, argues that declining research
and development productivity is at the centre of the "malaise" of declining
valuations in the medicines sector.

Writing in the latest edition of the Harvard Business Review, Mr Garnier
defends large pharmaceutical groups such as GSK, rejecting the idea that
"the more-nimble new enterprises like those in the biotech sector will
supplant the lumbering dinosaurs" of the big companies.

But he says that successfully developing new medicines will require
stripping away bureaucracy and returning power to the best scientists,
recognising that "critical mass in fundamental research is the size of one
human brain".

He calls for separation of two aspects of drug research normally
intertwined by companies: the discovery of high-risk "first in class"
therapeutic breakthrough medicines, and the development of "best in class"
compounds such as Pfizer's Lipitor, the fifth blood-thinning statin to be
launched but the most effective.

"By intertwining the processes . . . we have been demanding that R&D try to
perform as a ballet dancer and a football player at the same time," he
writes. "We end up with low productivity in both pursuits."

"First in class" research requires "true discoverers", strong experimental
biology skills, and partnerships with academia over many years. "Best in
class" work needs speed, using top chemists assisted by rigorous patent
reviews.

Mr Garnier also calls for companies to abandon the traditional "instant
blockbuster" model, with regulatory approval for use in very large numbers
of patients leading to the identification of side effects. He argues for
the launch of "progressive blockbusters", with gradual authorisation of
drugs safely tested in pools of smaller patients with similar genetic
profiles or common diseases.

He speaks out against the "marketing wars", helped by regulations
permitting drug advertising in the US, that have left companies with
"oversize sales and marketing machines" costing twice as much as the
amounts spent each year on R&D.