Biotech and the pharmaceutical industry: Back to the future

Biotech is set for a great future in healthcare. Here is why.The history of business enterprise is filled with heroes and villains. In the 20th century, we had our pick of industries to hate, including cigarette purveyors, alcohol producers, automobile manufacturers, and so on, that could be accused of damaging our health, polluting our air, endangering our children or, in general, putting their profits above society’s well-being.

Several decades later, we are pleased to have a new “villain” on which to pour our disdain: the global pharmaceutical industry, usually known as Big Pharma. Its sin? The generation of profits from the discovery, manufacture and sale of products that treat (and sometimes cure) the plethora of ills that befall mankind, from arthritis to asthma to cancer to diabetes to cardiovascular disease to neurodegeneration – in fact, treatments for virtually every organ system in the body.

So far, the younger sibling of pharmaceuticals, the biotech industry, is still the golden-haired child when it reports on scientific innovation and drives new jobs and economic well-being in select “biocluster” regions. But upon coming of age and reaching the market with new and high-value products, individual biotech companies soon find themselves similarly vilified for exploiting their unwary “victims” (i.e., sick people, who presumably benefit from new therapies) by charging for their products.

Where is society’s uneasy relationship with the biotech and pharmaceutical industry headed? I can foresee a wonderful, exciting new future – almost imminent – in which several primary drivers lead to a halcyon era of drug R&D productivity, resulting in a new generation of products for improved healthcare, finally ending in broad-based public acceptance of the combined (bio)pharmaceutical industry. These independent and yet interwoven drivers are: the tidal wave of new knowledge about the molecular mechanisms of disease that has emerged since the watershed Mapping of the Human Genome and subsequently accelerated with the advent of the “omics” (genomics, proteomics, etc.); a new toolkit of high-speed technologies for biological target identification and generation of new chemical entities for assessment as potential products; the growing annual R&D expenditure by pharmaceutical companies worldwide, which in 2002 exceeded US$45 billion according to the International Federation of Pharmaceutical Manufacturers Associations, (IFPMA); and a “new” deal among the three interconnected pillars of academic/government research, industry and healthcare providers in which collaboration starts earlier, lasts longer, and involves true interdisciplinary co-operation – the “so-called” bench-to-bedside model.

Starry-eyed? Maybe, but consider these six points:

First, the entrepreneurial, market-driven R&D model definitely works for healthcare innovation. New therapies are coming to market to address intractable disease enemies such as stroke, Alzheimer’s, cancer, traumatic brain injury, etc. And the industry has barely scratched the surface of what society needs.

Second, the biotech industry has delivered. About 100 biotech-derived drugs have already come to market, and another 350-400 therapeutic candidates are in the pipeline. Moreover, biotech is growing up, and is no longer viewed as a poor relation of large pharmaceutical companies. Big Pharma now seeks out biotech innovation at its source (why else have so many multinational pharma companies located their research centres in the geographic cradles of biotech?). Once strangers and uneasy collaborators, biotech and pharma are finally experiencing the long-awaited “convergence”.

The third point: we are getting older. As the population ages in all the major industrial nations, palliative healthcare (mainly in nursing homes) will become an economic nightmare; only drug therapies to treat – and hopefully to prevent – chronic and debilitating illness, such as Alzheimer’s disease, will have a chance of changing that. The 70 million Americans born just after the Second World War and their tens of millions of European counterparts who will reach “senior citizenship” over the next five years will see this first hand. Already, there are clear signs that the generation that has transformed society at every step from nursery school through middle age will soon take on the challenge of how to address the infirmities of old age.

Next point: Molecular Medicine (aka pharmacogenomics: personalised medicine) is evolving faster than you think. New products are in development that will redefine your disease (i.e., my form of cancer and your form of cancer, although they look alike at the clinical level, are different at the molecular level, predisposing us to different responses to treatment and clinical outcomes). More of these “companion” diagnostics and therapeutics are on the way, heralding the end of the “one-size-fits-all” pharmaceutical paradigm.

Fifth, information technology giants such as IBM have made a major commitment to life sciences. As medicine shifts to a truly information-based discipline, sooner or later it will become faster and more cost-effective to discover and develop the right medication for the right patient. The biorepositories established at the national level throughout Europe and soon in the US, are facilitating this shift by bridging the gap between basic biological research and clinical development of new drugs.

Finally, many of the requisite technology tools are in place. A huge restructuring of the entire pharmaceutical R&D process has occurred. No, we have not seen the output hit the pharmacies yet, but it is not hard to imagine that in another three to five years, a “boomlet” of new gene-based products should be coming out of clinical trials and headed for the marketplace.

This salutary list of facts and trends notwithstanding, there are huge problems in the healthcare system that cannot be addressed solely by new pharmaceutical products, even those for the most intractable diseases. These problems will no doubt be addressed in coming years through a variety of policy changes and reforms. But in the meantime, let us not demonise those imperfect people who stubbornly refuse to stop… well… making a go of innovation and dedicating themselves relentlessly to making sick people well in spite of the tremendous scientific challenges and business risks associated with pharmaceutical R&D.

So, who should care about these advances and wish to ensure that this new and exciting future actually happens?

It is a very short list: we all should. Because pharmaceutical and biotech companies are the heroes, not the villains, that will shape healthcare for us in the 21st century.

*Feinstein Kean Healthcare is a consulting firm specialising in the life sciences, based in Cambridge, Massachusetts, US.

©OECD Observer No 243, May 2004

Economic data

GDP growth: -9.8% Q2/Q1 2020 2020
Consumer price inflation: 1.3% Sep 2020 annual
Trade (G20): -17.7% exp, -16.7% imp, Q2/Q1 2020
Unemployment: 7.3% Sep 2020
Last update: 10 Nov 2020

OECD Observer Newsletter

Stay up-to-date with the latest news from the OECD by signing up for our e-newsletter :

Twitter feed

Digital Editions

Don't miss

Most Popular Articles

NOTE: All signed articles in the OECD Observer express the opinions of the authors
and do not necessarily represent the official views of OECD member countries.

All rights reserved. OECD 2020