What price a new cure?

The recent announcement by NICE, the National Institute for Clinical Excellence to deny NHS patients access to the anticancer drug trastuzumab emtansine (called Kadcyla by the manufacturers, Roche) is a result of their cost benefit analysis. It is useful to consider not only the cost of drug discovery, development and clinical trials, but also the price a particular market (or health economy) will stand. The NHS in the UK is facing increasingly tough decisions on how to allocate its annual budget (of just under £100bn), especially when a single drug for a single patient, for one year is just under £100 000: clearly this is why prevention is their byword!  At the same time $800m (approx £480m) is the generally agreed cost of anti-cancer drug development. It is inevitable that some will feel that the NICE decision is harsh, but it has to be seen in the context of other priorities. It also has raises important issues for drug discovery management by the Pharmaceutical sector.

In an earlier Blog I discussed the challenge of making a profit from the sale of

paracetamol, this is the other end of the spectrum. The challenge here is to meet the demands of the UK population whose average lifespan is significantly higher than say that in a developing country (typically by 30 years!) and around 10-15 years more than in the UK when the NHS was established. How might you therefore persuade an investor to back your business plan to develop a new anticancer treatment given the economic climate in the UK and the even greater pressures on healthcare budgets in the majority of the developing countries? It is worth thinking about the cost of typical treatments and the difficulties faced by NICE alongside those facing the drug companies.

For example, a kidney transplant which lasts for about 10 years saves the NHS £24, 000 pa against the comparative cost of renal dialysis. The upfront transplant surgery costs and the post operative care are significantly lower than the annual costs (around £30 000) of renal dialysis. Importantly, this needs to be considered in the context of the 40 000 cases of renal failure diagnosed per year. And that's just one example. The amount spent per capita per year in the UK on health care works out at around £300. Clearly, the system we operate of redistributing tax revenues and National Insurance contributions is under extreme stress, both as a consequence of increasing life expectancy and probably also a result of a long period without a major conflict involving citizens! You will of course be aware of the influence of the last century's two World Wars, which were only separated by 21 years.

On the topic of conflict driven innovation, I am reminded that it is the centenary of the discovery of citrate as an anti clotting agent. A most timely intervention for the start of WWI and the important discoveries made on the biochemistry and physiology of haemoglobin, driven in part by the need to manage the high casualty levels resulting from trench warfare: in particular the valuable practice of blood transfusion. WWII by comparison, presented a major stimulus for antibiotic development on an affordable, large scale in order to combat field infections. Finally, having spent some time working at the Liverpool School of Tropical Medicine, I am still taken aback by the age of some of the drugs used to treat TB and malaria: TB combination therapies were developed 50 years ago and in the case of malaria, quinine based drugs remain in widespread use after nearly 100 years. However, the need for drugs to treat tropical diseases has probably been influenced significantly by our involvement in conflicts in the East illustrating once again that the drivers behind drug development are complex and often surprising! Hopefully, the intensive research efforts to produce artemesin at an affordable price will be successful and the influence of the Bill and Melinda Gates organisation will catalyse further developments.

I wanted to make you think about the economics of drug discovery when you are discussing your business plans. I firmly  believe that taking stock of historical influences and events can be informative. Now you have a think and discussion amongst yourselves about the government's decision to stockpile Tamiflu from around 2006-2010! 

From the hook-and-eye to velcro: does a new invention always displace the previous one?

I was listening to the Book of the Week on Radio 4, B is for Bauhaus, and I was taken with the history of the invention and patenting of the zip or zipper. It reminded me of how human invention and design is reflected in Nature. The hook-and-eye was major step forward in the clothing business, since it allowed a whole range of items to "stay up!". As clothing became increasingly sophisticated and those with sufficient money would buy and wear more and more individual items, the demand for secure fasteners also increased. However, which came first the hook-and-eye or the button. It is clear that ornamental buttons have been around for a couple of thousand years, but buttons and importantly, button holes developed before the hook-and-eye, which surprised me. 


The question I asked myself as the author began discussing the impact of the arrival of the zip fastener in its current form: did it ring the death knell for the button? (Moreover, did velcro seal the fate of the zipper?) Well yes the zipper did for trousers, but not for suit jackets (well not all). But more importantly, this is a story of niche businesses and the adjustments and the accommodations made by society (globally) to make way for a new invention that improves upon one idea in many ways.....but not all. What is the lesson from this story? Well as an undergraduate it was made very clear that all enzymes are proteins. However, in the mid 1980s, it emerged that certain RNA molecules possessed catalytic activity. Did this turn the world of Biochemistry upside down? No, it just made everyone rethink their fundamental assumptions and it became clear that catalytic RNA was not as effective in general terms as protein catalysts, but rather there are some aspects of bio-transformation that are best achieved by RNA enzymes. Moreover, maybe catalytic RNA preceded protein-based enzymes....

Today, you can by a box of hooks and eyes on E Bay just as easily as a box of buttons or zips. You can also expect to find a hook-and-eye in one or two places where you will never find a button or a zip. The point is you may have to adjust your business plan/model in order to survive, but this is where long term business planning and foresight management is important. Other examples would transport: ships, trains, planes....bicycles. They all co-exist and different opportunities exist in different markets. So include some thoughts on long term sustainability and think of examples of coexisting products and examples were an invention has been completely replaced (I immediately think of a product that goes together with a TV). 




And then of course there is velcro, and its biological mimic!