American Scientist

The $800 Million Pill: The Truth Behind the Cost of New Drugs. Merrill Goozner. vi + 297 pp. University of California Press, 2004. $24.95.

The title chosen for Merrill Goozner's The $800 Million Pill was outdated before the book was even released. The dollar amount cited is the average cost of developing a single new drug, according to a Tufts University study published late in 2001. But in late 2003, the consulting firm Bain and Company put the cost at a staggering $1.7 billion. This figure included some marketing costs not counted in the Tufts study.

The high—and rising—cost of prescription drugs has been on the minds of many people, from angry protesters in front of drug companies' headquarters to American senior citizens traveling to Canada or Mexico to buy cheaper medicines. The U.S. Congress has responded by authorizing a prescription drug benefit for Medicare. Pharmaceutical companies are viewed by many as greedy entities (their average profit margin is considerably higher than that of chemical companies in general) that are set on enriching themselves at the expense of the public.

Goozner attempts to get to the root of this issue by investigating the discovery and development of numerous drugs now on the market. His conclusion, to simplify a bit, is that because many drugs are discovered by government scientists, or government-funded scientists, and some drugs are even put through clinical trials by government laboratories, pharmaceutical companies do little more than manufacture and sell the drug. Thus, he reasons, they are charging the public unjustifiably high prices for their products, because much of the arduous spadework in bringing a drug to market is done by academic and government researchers at taxpayer cost.

This assertion is a gross oversimplification. Certainly, many promising drug candidates are discovered by, say, academic scientists funded by the National Institutes of Health or other government agencies. Often, however, a synthetic pathway to the new molecule may not exist, or it may require such exotic reagents, solvents or conditions that industrial manufacture of the drug would be impossible. Or the synthesis may turn out to be extremely low-yielding, necessitating development of a completely new set of reactions for making the molecule. For example, a Novartis team recently came up with a hybrid synthesis of two previously published methods for making an anti-tumor agent. The new synthesis took 39 steps and 20 months to devise!

And the development process does not end with a new synthetic protocol. The synthesis has to be scaled up to commercial quantities, and the drug has to be formulated—that is, converted to a form that can be taken by the patient. Should it be given in the salt or neutral form? Which crystal polymorph of the drug is the most appropriate for delivery? How stable is the drug in air at room temperature?

This type of grindingly difficult work, which won’t get you published in Science or Nature, is the "D" in R&D. Development scientists often toil in obscurity for years, while their academic counterparts receive accolades and public praise for their discovery efforts. I know—I spent three years working as a development scientist for a biotechnology-related firm. Goozner shows scant appreciation for these aspects of drug development and breezily glosses over the process between the discovery of an interesting new molecule and the manufacture of a viable medicine. According to a recent (March 22, 2004) report in Chemical and Engineering News, these costs can amount to hundreds of millions of dollars for a single drug.

Even if all of the above development hurdles are overcome, a company may find that a drug candidate it has bet millions on fails in critical patient trials. This is a huge risk that the company has to assume—only one molecule in thousands ever receives FDA approval. Furthermore, patent protection on new drugs lasts only for a limited time. The portion of this "period of exclusivity" during which a pharmaceutical company is actually earning revenues from the drug is getting shorter. The patent protection clock starts ticking once the drug is discovered, but the company can't make money until it undergoes preclinical development, passes all stages of clinical trials, and is approved by the FDA and finally marketed. This process can easily take a dozen years or more, leaving only a few years during which the drug can be sold without generic competition. There are also marketing costs involved in selling a drug, and these can be substantial, to say nothing of legal expenses. By Goozner's own estimates, "the total marketing budgets among drug industry firms may have exceeded $40 billion." Goozner largely ignores these costs associated with drug development. In the final analysis, these companies are not charities; they are under constant pressure not only to recoup the billions they spend but also to make a profit.

This is not to say that pharmaceutical companies are above criticism. Some of Goozner's complaints about them are quite justified. Succumbing to pressure to report outsize profits each year, they have focused on the blockbuster-drug business model, which emphasizes the creation of new drugs that will generate several hundreds of millions of dollars in sales each year. And they deserve the castigation they receive here for developing scads of "me too" drugs—simple modifications of existing medications that have marginally greater efficacy than the original (although some of these variants—for example, those for the treatment of allergy or depression—may be important). The myriads who suffer and die from tropical diseases such as malaria, tuberculosis and leishmaniasis, most of whom are desperately poor, hardly register on the radar of "big pharma," because therapies for their ailments would not generate much in drug sales. After all, do we really need another Viagra when millions die each year from drug-resistant tuberculosis?

Unfortunately, The $800 Million Pill is heavy-handed and repetitious. For example, the "compassionate use" policy of giving experimental drugs to desperately ill patients is defined and elaborated on more than once, and Margaret Fischl's AIDS research is described twice. The central (flawed) thesis—that the government invented the drug, so citizens should get it cheaply—is repeated over and over.

The book is further vitiated by errors in the science, especially in the abysmally poor summary of chirality (the "handedness" of certain molecules), which Goozner describes as arising from "carbon atoms arrang[ing] themselves in six-sided rings.” He also refers to “the amino acid sequence of a gene." And he writes that x-ray crystallography was developed with "federal research dollars," implying that it was a U.S. invention, whereas it was actually developed in Great Britain by William Henry Bragg and Lawrence Bragg.

The issues in drug development are complex. They are incompletely addressed by Goozner's one-sided analysis, which overlooks important aspects of drug development.—Tim Royappa, Chemistry, University of West Florida