Skip to main content Skip to local navigation

Drug companies profit through lack of innovation, says researcher

Drug companies profit through lack of innovation, says researcher

A new study co-authored by a York University professor finds that American pharmaceutical companies aggressively develop and market new drugs with few clinical advantages over existing ones, contributing to overuse and fuelling up to an 80 per cent  increase in drug expenditures.

The study, published by the British Medical Journal, reports that companies profit steadily from marketing large numbers of new drugs – mostly minor variations on existing medications – with little to no health benefit for consumers.

Joel Lexchin

“Put simply, a massive amount of money is spent on marketing – far more than R&D,” says study co-author Dr. Joel Lexchin, a physician and professor in York’s Faculty of Health. “Most of the R&D is directed at developing drugs that can generate revenue for the drug companies, rather than at finding significantly better drugs for unmet medical needs.”

The study points out that a brief spike in the number of drugs with new active ingredients (called “new molecular entities, or NME’s) in the mid-1990s created an innovation scare giving drug companies more leverage to pump out large numbers of spinoff drugs. “In fact, the spike was followed by a decline, and then a levelling off to the usual pattern. The number of NME’s being approved and marketed has not declined significantly, nor is the approval process for new drugs as difficult as the pharmaceutical companies make it out to be,” says Lexchin.

Since the mid-1990s, independent reviews have concluded that about 85-90 per cent of all new drugs provide few or no clinical advantages for patients. The small, steady increase in clinically superior drugs contrasts with the FDA granting priority review status to 44 per cent of all NMEs from 2000 to 2010.

The study’s lead author, Donald Light, a professor at the University of Medicine and Dentistry of New Jersey, says obvious conclusions can be drawn from this timing.

“Interestingly, this increase in the percentage of drugs with a priority designation coincides with companies beginning to fund the FDA’s approval process in 1992,” Lexchin says. “The low bars of being better than placebo, using surrogate end points instead of hard clinical outcomes, or being non-inferior to a comparator, allows approval of medicines that may even be either less effective and/or less safe than existing ones.”

While big pharma cries foul about the "patent cliff" – profits lost from major drugs like Lipitor going off patents – Lexchin and Light believe their patent-protected minor variations provide a solid cushion of profit.

Lexchin says the real innovation crisis is a conflict between commercial viability and consumer need.

“The drugs we need are not being researched and brought to market, largely because it’s more efficient and hence more profitable to simply create spinoff cures,” he says.

Republished courtesy of YFile– York University’s daily e-bulletin.