A Dangerous Trend?

Over the past few years, our work, first at Yale University and later at the Center for Research Innovation in Biotechnology at Washington University in St. Louis, has tracked sources of scientific and medical innovation in the pharmaceutical and biotechnology industries (1). As reported in a series of articles published in Drug Discovery, an obvious trend is a reduction in the breadth and depth of organizations participating in new drug research and development.

Over the past few decades, Pfizer has been a leader in a fundamental reshaping of how drugs are discovered and developed. Our data revealed that Pfizer leapfrogged from a middling company to become the dominant holder of new molecular entity (NME) approvals from the FDA. But this impressive climb arose not as a result of fundamental investment into research and development, but as a result of mergers and acquisitions. The present dominance of Pfizer thus represents the accumulation of many legacy companies over the past two decades. Indeed, an analysis of the league tables for NME holders over time reveals that Eli Lilly had consistently been the most prolific research and development organization in every decade from the 1940s through the 1990s. This dominance ended abruptly at the beginning of the new millennium when it was surpassed by Pfizer as a consequence of mergers and acquisitions. Moreover, Pfizer set a trend of aggregation that was matched by Merck, Novartis, Sanofi-Aventis and GlaxoSmithKline, such that Eli Lilly no longer ranks in the top tier in terms of new drug development leaders.

Given Pfizer’s position as a trendsetter for the industry, a recent article from John LaMattina, a former president of Pfizer research and development, raises troubling concerns (2). LaMattina points out that the intended CEO of the new Pfizer is far from being an advocate of in-house research and development. Our studies have already revealed a trend in which large, established pharmaceutical companies have progressively shunned preclinical and early clinical development activities. Were Pfizer to accelerate this trend (much as Allergan has done), its peers might do the same.

These trends are all the more concerning given the changing model for drug development that has evolved over the past few decades (3). The current model resembles a food chain in which relatively young biotechnology companies serve as the sources of preclinical and then clinical-stage therapeutics. It is generally understood that following the establishment of human proof-of-concept (generally positive phase II clinical trial data), the compounds are carried across the finish line by pharmaceutical companies, which have the resources and expertise to execute large and expensive phase III clinical trials, as well as the subsequent sales and marketing of new medicines following licensure.

This later-stage involvement has created “the valley of death” in drug development, which reflects the resource constraints that preclude the advancement of novel ideas into preclinical and then clinical candidates. One problem is that the source of “feed material” for drug development is evaporating as a result of a series of unfortunate trends. Our data reveal that startup companies, which have been successful in developing new drugs, are being rapidly acquired and are then dismantled coincident with their first FDA approval. Compounding this, the flow of venture capital into companies at the early (i.e., discovery or preclinical) stages of the development process has been staunched because of concerns about the capital investment and timelines required for new product approval.

Were the newest manifestation of Pfizer to accelerate the retreat from drug development, the valley of death would widen further and the public health implications could be devastating. Given its role as a trendsetter for the industry, the management of the new Pfizer should consider its options carefully. Furthermore, all interested parties, including industry players, regulators, patient advocates and investors, should work together to identify new models that incentivize the creation of new medicines.