Government Drug Developer Is a Bad Idea

Published May 31, 2016

The National Institutes of Health recently announced it would be engaging in a billion-dollar effort to encourage the development of new pharmaceutical therapies. The New York Times headline for this story sounded innocuous: “Federal Research Center Will Help Develop Medicines.” But not everyone is so sanguine about this effort.

Fox News, for example, reran the Times story under the header, “Obama Creating Billion Dollar Gov’t-Run Drug Company.”

Even though people might differ on the interpretation, most everyone can agree on the underlying and problematic fact that the development of new pharmaceutical therapies has slowed in the United States. The Times story had two charts accompanying its article. One showed research spending by the large pharmaceutical companies has declined in recent years. The second chart showed the number of new pharmaceuticals approved by the Food and Drug Administration (FDA) has been lower than it was throughout much of the 1990s.

The government’s response to these troubling developments is to try to make the NIH into another drug developer, at a time when existing drug developers are having a difficult time getting their products to market. The sad truth is that this approach has not been successful in the past.

Government Drug Development Failures

For a variety of reasons, governments tend not to be good at applied research, and they have a poor track record at drug development. As Dr. Thomas Insel, director of the National Institute of Mental Health, reminded the Times, NIH is “an agency that has never developed drugs and actually doesn’t know how to do therapeutics that well.”

Wake Forest biochemistry professor Mark Lively, another skeptic, asked, “[T]he N.I.H. is not likely to be very good at drug discovery, so why are they doing this?”

Although the NIH proposal is wrongheaded, the Obama administration is right to be concerned about the problem. The recent slow pace of drug development in this country carries serious consequences for millions of Americans and the entire world. Pharmaceutical products are essential to American lives and livelihoods when viewed from the perspective of economic growth, personal health, and national security.

Nevertheless, there are better ways to approach this issue than getting the government on board as a pharmaceutical development company, an expensive endeavor likely to end in failures.

Expedite FDA Process

To advance the cause of pharmaceutical development, the government should focus on the FDA, which even HHS Secretary Kathleen Sebelius has acknowledged creates “bottlenecks” in the scientific development process. The chance a new compound entering human testing will reach the market is only 8 percent today, compared to 14 percent a decade ago, according to a paper on FDA’s own Web site.

The FDA has pushed up the cost and time for each new drug approval to nearly 10 years and a billion dollars. Such government-imposed cost and inefficiency discourages pharmaceutical investment, further reducing the number of new products entering the marketplace.

For this reason, HHS announced in August it would create an expedited process for approving biological countermeasures that could help defend the nation against a bioterror attack. If this is a good idea in the area of bioterror countermeasures, FDA should consider simpler, expedited procedures for a variety of lifesaving and life-extending technologies, not just those having to do with biodefense.

If cost is a concern in adopting this approach, HHS should spend the proposed billion dollars going to NIH on streamlining FDA’s burdensome review processes and funding the Reagan-Udall initiative, which was supposed to spur innovation by helping to advance regulatory science to keep pace with private-sector innovation and ingenuity.

Reform the Framework

Another important initiative that can help bring more drugs to market is the BRAT—”benefit risk action team”—framework. As former FDA official Peter Pitts describes it, the BRAT framework is a way to “move toward an assessment that seeks to incorporate all relevant aspects of benefit and risk.” The idea, recently written up in the scientific journal Clinical Pharmacology & Therapeutics, is to develop clearer guidelines for regulators in making decisions about the benefits and risks of various compounds.

Ultimately, this approach could also be used to give doctors and patients more discretion over the risks they are willing to bear. A person suffering from late-stage cancer will obviously be more willing to try a risky product than a healthy 25-year-old would. A policy of approving products along a risk continuum could get more products into the marketplace and ultimately save and extend lives now and in the future. This is obviously the ultimate goal of pharmaceutical development and every humane citizen.

To address the very real and serious impediments to pharmaceutical development requires a focus on the real problem, the government’s protracted drug approval process. There are a variety of good suggestions out there that would help fix this problem. Unfortunately, the Obama administration’s idea to create a new, billion-dollar government run initiative is not one of them.

Tevi Troy ([email protected]) is a senior fellow of the Hudson Institute and a former deputy secretary of the U.S. Department of Health and Human Services. An earlier version of this column appeared at The Daily Caller ( Reprinted with permission.