Summary:
David Shaywitz and Nassim Taleb write that the pharma industry is suffering as a result from a mismeasure of uncertainty. Despite promise of molecular revolution and drugs by design, pipelines are dwindling. Pharma companies seek to identify the largest markets they can find, develop products for these customers and boost efficiency of development process. Wrong approach, for two reasons: drug sales notoriously hard to foresee (yields more false precision than true insight), and drug development process is also very difficult to predict. This strategy fails to reduce exposure to negative uncertainty (all the bad things that can happen during drug development), and eliminates much of the exposure to positive uncertainty (serendipity). Pharma's trend of outsourcing may open up possibility for innovators with a greater appreciation of the nuances of science to do a lot better. (Published: 30/07/08)
Notes:
- molecular revolution: was supposed to enable drug discovery to evolve from chance observation into rational design
- yet dwindling pipelines threaten the survival of the pharmaceutical industry
- what went wrong?
- answer: the mismeasure of uncertainty
- academic researchers underestimated the fragility of their scientific knowledge
- we still do not understand what causes most disease
- scarcity of good animal models for most human disease
- academic science tends to focus on the "bits and pieces" of life - DNA, proteins, cultured cells - rather than on the integrative analysis of entire organisms, which can be more difficult to study
- yet: real scientific progress has occurred
- pharmaceuticals executives overestimated their ability to domesticate scientific research: spreadsheets are easy; science is hard
- pharma companies seek to identify the largest markets they can find and develop products for these customers
- sensible in theory, but less so in practice, for two reasons:
- drug sales are notoriously difficult to foresee
- even at the time the medicine hits the market
- i.e. predicting sales a decade or more ahead of registration, when the research and development process typically begins, is generally a fool's errand
- yields more false precision than true insight.
- yet: much of contemporary pharma R&D is driven by this sort of rigid planning.
- drug development process is also very difficult to predict
- because of both our limited understanding of disease and our inevitably imperfect understanding of the effect any new compound will have on the body
- most modern medications were discovered in the old-fashioned way: by accident
- e.g. Viagra, originally developed as treatment for chest pain
- pharma companies have been trying to boost output by increasing efficiency
- narrowing focus to a handful of disease areas
- shelving safe but ineffective compounds without fully exploring their scientific potential
- trying to ensure that each project the company is working on is carried out with a clearly defined market segment in mind
- this strategy often fails significantly to reduce exposure to negative uncertainty - all the bad things that can happen during drug development - and eliminates much of the exposure to positive uncertainty (serendipity) that remains so vital
- managers so intent on maintaining focus that important opportunities for novel discovery are lost
- as is the intellectual space for tinkering and capitalising on the chance observations and unexpected directions so important in medical research
- pharma executives are creating an ever-more-rigid environment
- and then wondering why their productivity is going down
- and why they have such difficulty attracting and retaining talent
- diruptive innovation
- pharmaceutical industry is ripe for disruptive innovation
- but: the barriers to entry have been far too high for anyone new to break through
- however: pharma companies trying to cut costs by outsourcing large parts of their operations
- in response service providers have sprung up around the world to fulfil these functions
- if the trend to outsourcing continues and if the main competence of pharma companies becomes (as some have suggested) simply their ability to orchestrate the entire process, it is not difficult to imagine that an innovator - particularly an innovator with a greater appreciation of the nuances of science - might be able to do this a lot better
