As America ages and medical science advances, there are many new drugs coming onto the market to help us look younger and enjoy life more. Ads for these “lifestyle” drugs — treatments for ailments like baldness, dry skin, wrinkles, erectile dysfunction, incontinence and hot flashes — are widespread on TV, radio, the Internet and in the print media.
Drug companies are heavily advertising lifestyle drugs and pouring time, money and effort into developing them because such medications — particularly those that require frequent use — produce big profits.
But as resources are diverted to develop medications that enhance our lives but don't save them, drug companies are carrying out less work to develop less profitable treatments for life-threatening diseases. Pharmaceutical companies respond that profits from lifestyle drugs play a vital role in sustaining research and development on important life-saving drugs.
Still, there are only so many researchers and so much research funding to go around, and some badly needed drugs are not on the fast track to development. For example, there is a growing need for new drugs to treat infectious diseases that are on the rise. Increased trade and travel have made America's borders more porous to threats from diseases once thought confined to distant parts of the world. Superbugs are becoming resistant to current antibiotics at alarming rates. As a result, more than 170,000 Americans died in 1995 from infectious agents — twice the number as in 1980.
There are other areas of neglect, especially when it comes to prevention. At a time when lung cancer kills more than 150,000 Americans annually, only three new drugs are being developed that help people stop smoking — even though smoking is the main cause of lung cancer.
No one claims that lifestyle drugs are the only new medications being produced. New drugs treat serious medical problems such as high cholesterol, depression and asthma. Some cancers are now curable with drugs, and new treatments have prolonged the lives of people with HIV/AIDS. Because so many people suffer from these serious diseases, any drug company developing effective new medications knows there will be high demand and strong sales.
But some drugs that could save many lives are not being produced or not being produced in sufficient quantities, while many lifestyle drugs are being manufactured in abundant supply. The news that 48 million doses of flu vaccine are unavailable for the current flu season points to fundamental problems with the way decisions are made about what new medicines to produce.
If the world experienced a new epidemic of deadly diseases like anthrax or smallpox, demand for drugs to treat these diseases would be enormous. But without an outbreak of these diseases, patient demand for such drugs is too low to make development profitable. If there were a sudden outbreak of these diseases, new drugs to treat them would not be around.
Like any business, drug companies make decisions about what products to develop based on incentives. In the pharmaceutical industry, these incentives are complex. They come from patients who use medicines, from doctors who prescribe them, from insurers who pay for them and from shareholders who understandably expect profits after spending hundreds of millions of dollars to develop a new medication. Drug company leaders rationally respond in ways they believe will make people healthier without destroying the financial health of their companies.
No drug company has the resources to develop all the good ideas that come along. Contrary to conventional wisdom, drug company decisions are not based solely on the potential profits, and it is these criteria that hold the key to changing incentives. An idea gets turned into a drug based on three other criteria in addition to profits: the likelihood the idea will mature into a marketable drug; the medical need for such a drug; and the amount of time and money it will take to create the drug.
In order to influence drug industry decisions, the United States needs to be clear about the drugs Americans need. The government has an important role in helping us understand what drugs we should have now, and what drugs we'll require in the future. In a free market system, profits may be an indicator of what we want as individuals, but they may not be the best indication of what drugs we need as a society.
From a technical standpoint, understanding what drugs we need is a complex task. It involves tradeoffs about life-threatening illnesses that affect few people and less serious but more common conditions.
But defining the need for new drugs is not an impossible task. Once we have a list of the most needed drugs, the U.S. government could provide incentives that align drug company business priorities with those needs. One way could be to fund basic research on high priority areas through the National Institutes of Health. This research would have the effect of demonstrating the feasibility of the very best ideas.
A recent Senate report concluded that the NIH makes most of the discoveries on which new drugs eventually made by drug companies are based. The number of new drugs for HIV/AIDS also demonstrates that when public policy strongly indicates a priority, investment in public research and new drugs follow.
The order in which the Food and Drug Administration reviews new drugs could also be based on the defined list of priorities. Such a change would be a minor modification of current rules that allow for accelerated review of potential “breakthrough” drugs.
Shorter drug review times could be a powerful incentive for the industry. Take today's top selling prescription drug, Lipitor, which brings in more than $20 million a day. Shortening the review for a new drug like that by only 50 days would mean $1 billion in additional revenues for its maker, in addition to the medical benefits it could provide.
Other mechanisms to change drug industry priorities that also deserve serious consideration include: public purchase of patents, modifications of trade restrictions and patent laws, and research and investment guarantees. These ideas should be added to the one idea, guaranteed government purchasing, that is currently in vogue.
Changing drug company incentives to align them with our most pressing medical needs could result in greater and faster production of life-saving drugs that would enable millions of people around the world to live longer and healthier lives.
Thomas Croghan is a physician and senior natural scientist at the RAND Corp., a nonprofit research organization. Patricia Pittman is director for international programs at AcademyHealth, a health research and policy center.
This commentary originally appeared in Pittsburgh Post-Gazette on November 28, 2004. Commentary gives RAND researchers a platform to convey insights based on their professional expertise and often on their peer-reviewed research and analysis.