Here's the case for a more caring, sharing pharmaceutical industry — one that works with academia, and other public bodies, in the public interest to discover the medicinal drugs and vaccines our global society urgently needs. And not just for the interests of shareholders.

It's a model for open source pharma — an alternative way of funding and working in drug discovery.

For some it's a naive idea, for others it's the only way forward, and has been for some time. 

"Thinking in particular about neglected diseases, or poverty-related diseases, we have long accepted that there is a need for alternative models," says Els Torreele, executive director of Medecins Sans Frontieres' Access Campaign. "And in fact for the last 20 years there have been several successful experiments in piloting different ways of doing research and development to ensure drugs are developed even where there's no market incentive."

That includes ensuring the drugs are affordable and available to those that need them.

"We've shown it's possible in a not-for-profit way, with public and philanthropic resources, so there's no reason not to do it for 'profitable' disease, or any diseases," says Torreele. 

But that's still not how we do business today. 

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Here's how we do business

About seven years ago, a small American university off-shoot called Pharmasset developed a promising candidate drug to treat hepatitis C. The drug was so promising that it quickly attracted the attention of a giant called Gilead Sciences. Gilead bought Pharmasset faster than you can say "I'm cured!"

They paid a hefty price: $11 billion (€9.5 billion). It's a huge sum of money by anyone's standards. But that was all right, because Gilead knew it could sell a 12-week course of the drug, now known as Solvadi, for $84,000.

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That's some return on investment, isn't it?

"Well, that's a bit of a special case," says Dr. Christine Rollier, an associate professor and preclinical vaccine developer at the University of Oxford. "But not even developed countries can afford that treatment for all their hepatitis C chronic patients, really."

Yet it's been a success.

The pharmaceutical industry is "not a normal market," says Torreele.

"It's health," she says. "People will sell their homes for health. Companies know that and they'll ruthlessly exploit it, too." 

Perhaps they think they can get away with it, because we've been trained to think that drug development is expensive. And it is. But it needn't be as expensive as that.

On the one hand, prices get inflated by the market. Inefficiencies at the heart of drug development drive costs up. These are real and yet unnecessary costs. Advocates of open source pharma say it could kill some of this inefficiency and drive costs down again.  

But today you still get situations where it appears perfectly normal for a company, such as Nostrum Laboratories, to justify their raising the price of a drug by 400 percent as a "moral requirement."

You also get American investment bank Goldman Sachs asking whether curing patients is a sustainable business model. That was in a recent report.

And you get top pharmaceutical firms like Pfizer, which reported full-year revenues in 2017 of $52.5 billion, ending research into new Alzheimer's and Parkinson's drugs because it's just not "promising" enough — where promising means profitable.

The examples are legion, but basically the market is deciding what drugs get made, and who gets treatment.

The 'financialization' of health

So after all our early successes in pharmacology — from eradicating some diseases to doubling life expectancy — we've hit a wall.

Over the past decade, a number of significant drugs and vaccines have become patent free. That's forced the industry to do whatever it can to maintain or maximize profits. For instance, it will produce "me-too" drugs, which allow companies to repatent compounds with only minor adjustments. A report by Professor Aidan Hollis, an economist at the University of Calgary, says me-too drugs "diminish the incentives for innovation."

And that means fewer new drugs.

At best, companies will let academia do the early, risky research, even up to Phase 2 clinical trials, funded with public and philanthropic money, and then swoop in with the big dollars to finish off the job, just as Gilead did with Pharmasset's hepatitis C drug.

Companies buy up the intellectual property (IP), keep it tight in a vacuumed state of secrecy, and reap the rewards royally. 

"This is the financialization of the industry," says Torreele. "It's no longer about getting products out there to benefit patients, but a complex system with a lot of money involved, trying to make a lot more money."

"But this only works because you have public health systems paying for it," she adds.

What's real and what's unreal

Two or three decades ago, the system seemed to work better.

"We have lost control," says Piero Olliaro, head of implementation research at the special program for tropical diseases (TDR) at the World Health Organization (WHO), and a visiting professor at Oxford University. "We've lost control in the sense that there is no real system to define what sort of price is justified for a medicine." 

There is, however, an unreal system, and that's one that claims it costs $2.6 billion or more to develop new drugs and vaccines. That figure was pushed in a study by Tufts University.

Olliaro and Torreele contest the Tufts study. Together they were two of a group of authors who published a paper called "An open source pharma roadmap."

Those research and development (R&D) costs of 2, 3, or 4 billion dollars can include all kinds of add-ons, like the cost of failure, marketing, and so-called "opportunity costs."

"That's basically what they would have gained if they had invested their money on the stock market instead of investing in R&D," says Torreele. "But that has nothing to with what's spent on R&D."

But Torreele and Olliaro say the true cost of R&D could be as low as a few hundred million dollars for some diseases.

"A couple of million" is the sort of money that Christine Rollier says she tends to need to go from preclinical research to Phase 1 and even Phase 2 trials.

"Then if we get interest from a pharmaceutical company who wants to develop it further, that's actually good news. And if they want to make money on it, that's not bad either, per se," Rollier says. "It's okay for academia to drive research for vaccines or therapeutic medicines for low-and-middle income countries, and for the industry to pick it up, if the product gets used and is inexpensive."

Rollier knows how hard it can be to get funding from industry, especially in early, risky stages. But she says she also sees how the industry has a clear role in drug development. And she also says if you want to sell your candidate, it will have to come with intellectual property.

De-risking drug discovery

"There's no point being critical of the pharmaceutical industry, they employ very smart people, just like us in academia, and they want to do good science and create benefits for patients, too," says Chas Bountra, professor of translational medicine in the Nuffield Department of Clinical Medicine at Oxford.

"It is a business," he says. "But the culture is changing in academia and industry. And we need to work together to increase the probability of success."

Bountra used to be a vice president and head of biology at GlaxoSmithKline.

And as a former industry head, Bountra will readily tell you that drug discovery is hard work. Of course, it is hard work, and that makes it expensive, too.

For a start, there are hundreds of known diseases, with 10s of sub-diseases, and many other rare diseases and evolving mutations. Human disease is itself "incredibly complex," he says, and that means you can't lump all Alzheimer's patients, for instance, in the same basket.

There's even a downside to one of the strengths of the industry: its ability to develop new technologies, like robotics and high-throughput screening. "It reduces costs but our choice has gone up, and we're not very good at picking out targets from this bigger and bigger orchard of fruits," Bountra says.

So imagine you shared those choices in an open, free and transparent way. You would get results quicker as competing labs would learn from each other's mistakes, exchange ideas and perspectives — you'd collaborate.

It does happen. Large firms and academia do share their compound "tool boxes." But it could probably also happen more broadly.

Torreele mentions a recent discovery of two new tuberculosis drugs.

Tuberculosis, according to the WHO, kills more people than HIV and malaria combined.

So when the new drugs hit the market, it was a win for patients. Perhaps not as big a win, however, as may have been possible. The drugs were developed in isolation, but it turns out they may work better together, complimenting each other. 

"It's the TB community that's trialing those drugs together, now, not the companies, because they have no incentives," says Torreele. "If we had developed these drugs in an open way, we would have combined them during the development phase, not six years after they had got to market."

But still one of the greatest inefficiencies in drug discovery is that most drug candidates fail very late in the process, when most of the money has gone.

About 80-90 percent of candidate drugs fail in Phase 2 trials, and of the 20 percent that progress to Phase 3, a further 50 percent fail as well, says Bountra.

With those statistics, is it any wonder that publicly-traded companies are risk-averse? That's a lot of wasted cash. With more people working on a shared project, though, developers could fail fast and move on together.

Recurring mantras   

Divisions of labor remain. You often hear both industry and academia say that universities are incapable of bringing drugs to market. They can do the early leg work, the mantra goes, but only the industry can turn candidates into viable products.

Olliaro, however, says no.

"I challenge the idea that only pharma can do clinical trials. That is wrong," Olliaro says. "They farm out clinical trials to contract research organizations and that adds enormously to the cost of R&D. But people in the not-for-profit sector also know how to do clinical trials, and we do it with patients in mind."

If Olliaro is right, then academia pitching in right through to the end in an open source setup would bring down costs even more.

The future of drug development is clearly a complicated affair. Much of the control still rests with industry, although it gets public help to de-risk the nature of drug discovery and still gets to make a profit at the end. But all players could start to redress the balance. And if they do, we might one day hear a little more about the industry working pro bono — at least on the most pressing medical urgencies. After all, healthy people are far more useful to society and the economy all round.

"To be very blunt," says Torreele, "someone who's dead is much cheaper. But that's not the point. As a society, we have a core value that values people's health." 

 

Zulfikar Abbany has produced a panel on the issue of how we fund drug development for the 2018 Battle of Ideas. He'll also speak on the panel on Sunday, October 14, in London.