Inside Salk; Salk Insitute

Insider's View

William R. Brody

William R. Brody

There is a saying that the "experts are always wrong.” Over the past couple of decades, experts predicted a doomsday scenario known as the “patent cliff” that prompted a great deal of handwringing in the pharmaceutical industry. Many pharmaceutical companies were relying heavily on profits generated by a small number of so-called “blockbuster drugs” that emerged during the early- to mid-1990s. With these cash cows slated to come off patent between 2005 and 2015, there were no replacement blockbusters in the pipeline. The fear was that an influx of generics would cause a sharp drop in prices, resulting in the companies’ revenues falling off the patent cliff.

At the same time, the number of new molecular entities (read “unique drugs”) being approved by the U.S. Food and Drug Administration dropped to a 20-year low, and various groups blamed the FDA for clogging the pipeline. In reality, however, there were very few novel drugs being sent to the FDA for approval. Rather, more prevalent were the “me-too” drugs: already approved drugs that, when combined, could be priced like a new unique drug.

Indeed, the profit fears were justified when looking at individual drugs, as a company can suffer a real shock when a blockbuster comes off patent. The classic example is Pfizer’s cholesterol-lowering drug Lipitor. A highly effective cholesterol lowering statin, Lipitor came on the market in the mid-1990s and by its peak in 2006, generated nearly $13 billion in sales. After Lipitor came off patent in 2011, a number of companies started selling generic versions, and by 2013, Pfizer’s sales of the drug had dropped to $2.3 billion, still a healthy number, but far from the pre-cliff days. Other blockbuster drugs similarly took the plunge. Novartis’ blood-pressure drug Diovan, Bristol-Myers Squibb and Sanofi’s anti-clotting drug Plavex and Merck’s asthma and allergy drug Singulair all lost patent protections in 2012. Each drug sold in the billions at its peak, and in each case, generics flooded the market and revenues of the former patent holder took a dive.

In a fit of panic, various organizations that represent diseases like cancer, diabetes and Parkinson’s, lobbied Congress to set up a completely new research funding organization called “Faster Cures.” Fortunately, the proposal lacked sufficient support to get out of committee, but had it passed, it would have led to major cuts in the NIH budget, just at a time when basic science was making startling discoveries that would lead to groundbreaking new drugs.

The experts were wrong. Pharmaceutical companies combatted the patent cliff in three ways: 1) Developing mergers with other big pharma companies, eliminating thousands of employees and drastically cutting research budgets to raise profitability; 2) Acquiring the rights to develop and market drugs produced by biotech companies; and 3) Retooling their R&D programs by moving from their traditional corporate headquarters to set up labs in Cambridge (England and Massachusetts), Silicon Valley and San Diego. These moves allowed them to take advantage of the developments in molecular biology, genomics and the significant discoveries from universities that identified new targets on which drugs could act.

With these changes, the industry is again thriving, and the drug development pipeline– which doomsayers warned would slow to a trickle–is churning out new drugs faster than ever. Last year, the FDA approved 44 new (NME) drugs, the most since 1996, its previous high-water mark. These included 12 drugs for treating infectious diseases, 8 new cancer therapies and other drugs for treating everything from gastrointestinal disorders to neurological diseases.

So what happened? Put simply: science happened. In the past, most drugs were developed by a shotgun approach that involved one part savvy and nine parts luck. Drug companies developed hundreds or thousands of different molecules and threw them all at a disease hoping for a therapeutic effect. It was often brute force science that produced drugs, not an understanding of how they worked.

Thanks to decades of discoveries by scientists at Salk and other basic research institutions, we not only have a detailed understanding of many diseases, but, in fact, often have identified a target molecule against which a drug can work to enable or disable the function of that molecule. With this powerful knowledge, researchers are no longer groping blindly through the molecular haystack, but instead are precisely targeting the molecular weaknesses of diseases.

The science of genomics is allowing the segmentation of patient groups who seem to have a common disease (like breast cancer) but are quite disparate based upon genetic mutations in the tumor. Armed with that information, clinical trials can select a subset of patients with a disease who are most likely to respond to a drug. Previously, a drug against breast cancer might affect survival in 10 percent of patients, and was therefore deemed unsuitable for FDA approval. Today, armed with genetic sequencing, we treat only the 10 percent of patients who could have an 80- to 90-percent improvement in survival–a dramatically positive result and an approvable drug.

Thanks to basic science, the patent cliff turned out to be a molehill. Faster discoveries lead to faster cures.