Funding Bio-- MassBio Conference doesn't know how to do it
The Massachusetts Biotechnology Council’s program entitled “2012 Annual Meeting – the Business of Science” is underway, and the kick-off keynote speech and first panel spent a good deal of time exploring why the business approach to funding bio is not working so well.
Francis Collins is the Director of the National Institutes of Health and thus a major player in the business of bio; this year he will give out $25.7 billion to about 325,000 scientists. His speech was sprinkled with insights and great factoids, but the bottom line is that bio is in financial trouble and he is driving NIH to help meet the issues. Only about one in every six applicants gets funded these days, and the NIH budget has declined about 20% in buying power over the last decade even though the absolute number of dollars has increased.
Most telling: a 60-year longitudinal chart showing that over that period the number of successful drugs reaching market for each $1 billion of investment has fallen 100-fold. Although expressing himself as optimistic, citing great advances in the genomic sphere which will speed diagnosis and specific targeted treatment of cancer and other diseases, he conceded that bio contributes wealth (as well as wellness) to our nation, and that competition in China, India, Russia and now Europe is heating up. He intends on Wednesday to make these points to the Senate in discussing NIH funding.
(I found myself seated at a table with a representative of the UK government, who listed the UK funds established in the last few months, with many hundreds of millions of pounds to invest in bio, including a 200,000,000 government fund; you could almost feel the breath of John Bull down the necks of the attendees.)
How to fight for U.S. supremacy in bio? Efficient use of genomic analysis to speed drug targeting and testing, a study of failed or seldom used drugs to see if they have different applications, effective use of iPS cells which can be differentiated and then studied specifically. And, continued NIH funding, and an additional federal fund to supplement NIH and to target major needs such as Alzheimer’s.
The panel that followed was a bit more harsh in its analysis; moderated by Juan Enriquez, Managing Director of Excel Venture Management, the panel blamed the by-now usual suspects: the FDA, the non-economic models for drug development which turn off VC investment, the greater ease to acquire drugs as compared to spending 15 years developing and testing them. Some compared drug companies today to Procter and Gamble: more interested in marketing than in science.
One panelist noted that it is worse than feared: not only do few drugs get approved, but only 3 in 10 which are approved ever earn enough money to provide a return on investment. Drugs being proposed these days need have not only a scientific story but also a consideration as to pricing and reimbursement issues before investors will consider them.
Growth by acquisition cannot continue, as “pharma is running out of merger partners.” The benefits of scale will no longer be available. Schools bear blame also, by restricting doctors from serving on company boards or taking stock.
One final question hung over the room at the end: if drugs can come to market overseas for less money and in four years, what is the future of bio in the U.S. (There being no ready response, the program moved on to simpler things, like the cure for cancer….)