UPDATED: Biopharma lobby members pumped $49.5B into R&D

Posted under Blog, Companies, Diagnostics, Funding, Medical Devices, Medical Supply, patent expiration, personalized medicine, Pharmaceuticals, PhRMA, R&D, R&D budget, R&D spending, Startups, Universities, Videos by rmcbride

As the pharma industry rethinks the way it brings new drugs to market, drugmakers around the world haven't backed down from their multibillion-dollar research budgets. The Pharmaceutical Research and Manufacturers of America (PhRMA) revealed yesterday that its global membership of most of the largest drugmakers spent an estimated $49.5 billion on R&D in 2011.

The estimated sum fell slightly from the $50.7 billion that PhRMA members invested in 2010, but the real story appears to be how drugmakers are changing the ways they dedicate R&D dollars and whether they are getting their money's worth. More than ever, biopharma companies are spreading their R&D bets with a variety of experts and other companies outside of their organizations, and most of the companies are emphasizing research on targeted drugs and personalized therapies, according to PhRMA.

Much has been written about how drugmakers have altered their R&D strategies and spending habits in the face of a rash of patents expiring on blockbuster brands. Sanofi ($SNY) and AstraZeneca ($AZN), for instance, have called on their R&D chiefs to build a greater percentage of the companies' respective pipelines via partnerships, and Pfizer ($PFE) has taken an axe to some of its research operations and narrowed its R&D focus. All these companies are grappling with patent cliffs, and they desperately need their R&D bets to pay off in the coming years.

Last year, as PhRMA noted, the FDA stamped approvals on 35 new medicines, including Merck's ($MRK) and Vertex's ($VRTX) hepatitis C drugs, 11 treatments for rare diseases and the first new med for lupus since 1955, Human Genome Sciences' ($HGSI) Benlysta. Yet one could argue that the sales of new drugs aren't supporting the mammoth investments in R&D that have been made over the past decade. The industry group estimates that the cost of bringing a new drug to market is about $1.2 billion, and, depending on how you do the math, the sum could be much higher.

Companies are also taking more shots on goal in the clinic. According to PhRMA, there are now more than 3,200 meds in trials or under FDA review, a big jump from the 2,400 drugs in development in 2005 (when its members spent $39.9 billion on R&D).

The industry is holding out hope that the emergence of new genomics and computational tools as well as newfangled strategies to improve ROI on R&D spending could boost productivity in drug research. And the confluence of these elements is in personalized medicine R&D, where deeper understandings of the drivers of individual patients' illnesses are being translated into new drugs for cancer and other diseases. Tufts University Center for the Study of Drug Development surveyed biopharma companies and learned that 94% were pursuing personalized treatments.

Drugmakers' ambition in personalized medicine isn't a new story in the biopharma industry, of course, but actually realizing those ambitions would be a major step forward. Then drugmakers could feel like their huge R&D budgets were worth the investment.

- here's the release
- see the PharmaTimes article
- check out this piece from Dow Jones

Related Articles:
Report urges new tactics to end drug-development drought
R&D execs continue the global search for efficiency, open innovation
Merck chief defends $8B R&D budget as vital long-term investment
PhRMA's COPD pipeline report spotlights blockbuster hopefuls

Ex-Pfizer R&D chief questions calls for wholesale pharma outsourcing

Posted under Blog, Companies, Diagnostics, Funding, John LaMattina, layoffs, Medical Devices, Medical Supply, Pfizer, Pharmaceuticals, R&D budget, Startups, Universities, Videos by Ryan McBride

Big Pharma companies have been farming out more of their R&D in recent years to keep spending in check, yet the experts have clashed over how much outsourcing can be done without threatening the long-term vitality of a drug company. John LaMattina, the former Pfizer ($PFE) R&D chief and current senior partner at PureTech Ventures, punches some holes in an argument for the pharma giant to ditch R&D altogether in his latest blog post.

LaMattina, who retired from Pfizer in 2007, writes that internal research projects can yield new products the company owns outright, without having to share profits with a licensing partner or to pay big bucks to acquire new drugs in a buyout. Also, even companies that want to rely heavily on outside firms for new products need scientists, as LaMattina points out. Internal researchers can play an important role in the process of evaluating assets from external sources.

Still, industry watchers want drugmakers to cut R&D budgets for a reason. Internal R&D groups have been notoriously unproductive and expensive to maintain, prompting critics to question whether pharma giants like Pfizer should stick to selling drugs and let other groups discover and develop treatments.

To an extent, drugmakers have answered the call, handing pink slips to scientists and development workers in large numbers. Last month, Novartis ($NVS) announced that it would ax 2,000 jobs in the U.S. and Switzerland, impacting jobs in R&D and development. Sanofi ($SNY) has revealed plans to trim hundreds of R&D and sales workers from the U.S. payroll. Yet neither of those two giants nor Pfizer plans to abandon internal R&D efforts.

- get more in LaMattina's post

Related Articles:
LaMattina gives insider's view of R&D 'upheaval' at Pfizer
Ex-Pfizer R&D chief: Big Pharma mergers, cutbacks badly damaged drug research
Ex-Pfizer R&D chief LaMattina criticizes short-term pharma strategy
Former Pfizer R&D exec jumps into VC game