October 22nd, 2008
The tech trend killing the drug industry
The trend is biologicals. (Picture from Nature.)
As the name indicates these are drugs based on the chemistry of living cells — antibodies, enzymes, hormones and proteins.
They are often grown, not made. Their promise is a shotgun approach to a cure, rather than a bazooka.
But shotguns miss. Even after they are tested and approved, as many as one-fourth of biologicals may cause problems, especially allergic responses. It may be safe for those who have taken it, but is it safe for you? Hard to tell.
This lack of predictability, combined with the legal expectation that your drugs won’t kill you, is becoming a nightmare for the industry.
Biologicals are also expensive to develop and, due to their risks, exceedingly expensive to test. This can drive prices beyond patients’ reach. Outside the U.S. the cost leads to controversy over whether the more expensive biologicals should be covered.
That’s why drug companies are under attack both here and in Europe, with payers seeking generic alternatives and drug companies seeking to recover their high costs.
For drug companies it’s a perfect storm. Higher costs, more difficulty in recovery, and a higher risk of side-effects are pulling the whole industry down.
Both industry and government must wonder if the cure is worse than the disease. There are no easy answers. Ending lawsuits doesn’t do anything to cover costs. Limiting access makes costs harder to recover. Side effects can kill.
Biologicals are forcing policymakers around the world to ask the hard questions. Should cost cause some citizens to die? Where is the line drawn? Is the private market the best way to deliver these medicines?
Those questions will exist long after November, and they won’t be easy for anyone to answer.
Dana Blankenhorn has been a business journalist since 1978, and has covered technology since 1982. He launched the Interactive Age Daily, the first daily coverage of the Internet to launch with a magazine, in September 1994. See his full profile and disclosure of his industry affiliations.
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| 10/23/08
