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Russell Roberts at Cafe Hayek points out that actually reading a trade deal before criticizing it on the Op-Ed page of the Boston Globe might be a good idea. The Op-Ed in question is by one Rahul Rajkumar, a fellow of the Paul and Daisy Soros Foundation for New Americans(not George Soros, his brother) and a member of Universities Allied for Essential Medicines. This byline struck me as peculiar - the members of other organizations of Universities have members who are, well...um...how should I say this?... universities. I'd heard of an Army of One, but apparently I missed the University of One. Mr. Rajkumar Univ. and other universities, such as The Univ. of Sanjay Basu seem to believe that Pharmaceutical companies will actually enter into agreements with Universities under the terms of something they call the Equitable Access License (pdf), where the basic idea seems to be that universities will unite to impose a requirement on Pharma that anything licensed by a company can also be licensed by a "Notifier" who wants to either supply a poor country or pursue a neglected disease. So far, this is just a non-exclusive license, I think. But the kicker - if I understand the EAL (IANAL) - is that the University also retains the right to license any additional data obtained by the company, including data on formulation, production processes, toxicity, clinical trials and so on. This is based on a variety of mythic views about Pharma, Academia, markets, and human behavior...starting with: University scientists are major contributors in the drug development pipeline.An example cited by UAEM is stavudine, which was licensed by Yale to Bristol Myers based on work from William Prusoff's lab. This listserv message reproduces Prusoff's own take on the story, which is modest and points out that Yale spent a tiny fraction of the cost of developing the stavudine, in the context of the average cost of drug development. It is estimated that to bring a drug from conception to the marketplace costs from $500 million to $800 million. The investment by a university like Yale is probably less than 1 percent of this amount. The major expense is clinical studies required by the Food and Drug Administration. Millions may be spent on these studies - only to have unacceptable toxicities occur and the compound dropped like a hot potato.and once the R&D is done, the production cost of the additional units is trivial compared to the overall cost of staying in business in the first place. But someone has to pay for the R&D, the clincal trials, and so on. A substantial part of the BMS bottom line is in antivirals (all of the sales leaders in the antiviral group are anti-HIV treatments). Even in 2004, stavudine (marketed as Zerit by BMS) had $272M in sales. The other three anti-HIV drugs had even more sales. Nice work if you can get it, right? Sure, if you could have predicted ahead of time which drug candidates will be successful, and as Derek Lowe reminds us, predicting ahead of time isn't easy. I don't think anyone from Pharma would deny that federally funded researchers make important contributions to the drug pipeline. Prusoff writes that he had been studying the effects of thymidine analogs on cells and viruses since the mid 1950s. Stavudine1 and AZT are both thymidine analogs, which are part of the larger class of nucleoside analogs used as anti-HIV drugs. These work because during the HIV life cycle, the viral reverse transcriptase transcriptase incorporates nucleotides (the phosphorylated forms of nucleosides into DNA copied from the viral RNA. Once HIV was identified as a retrovirus, it was obvious that this kind of inhibitor would prevent it's replication - the effects of these kinds of compounds were part of the evidence that led the late Howard Temin2 to propose the idea that there was such a thing as a retrovirus in the first place. Prusoff and many, many others studied nucleoside analogs and other inhibitors of DNA synthesis long before HIV was identified, or even before Temin and Baltimore discovered retroviruses. Nucleoside analogs kill anything that incorporates them into DNA. This includes bacteria, cancer cells...and patients (I would assume that this is known at the University of Rajkumar and the University of Basu - Mr. Rajkumar and Mr. Basu both have at least some time in med school). So while research at universities played the essential role of laying the basic research foundation that allowed HIV to be identied as a retrovirus, to know something about how retroviruses work, and, in the case of Dr. Prusoff's work, to remember an ineffective anticancer lead and do some important preliminary studies using cultured cells, this does not come close to bringing a drug through development. As Prusoff points out, while the cost of the remaining development of d4T was well below the industry average estimate of $500M, BMS didn't recoup any costs from all the other nucleoside analogs that turned out to be ineffective or too toxic. UAEM writes in their FAQ(pdf) If universities act collectively, they can maintain their integrity even in the face of opposition from industry—they have done it before, successfully establishing the norm that industry should not be able to require lengthy publicationPerhaps...but Pharma companies don't need to work on diseases that would be affected by the EAL - the emphasis on things like ED is bad enough without an EAL, and venture capital doesn't necessarily need to invest in Pharma at all. Econ 101: if you raise the cost of something, you get less demand...and this applies to University research as a product and Pharma as a consumer, as well as to Pharma stocks as a product and investors as consumers. It's kind of depressing that obviously bright young minds like Mr. Rajkumar and Mr. Basu don't get this basic idea of how things work in the real world. 1Stavudine is d4T - the sugar ring has been changed by oxidation of the 2'-3' bond to a double bond. 2I was fortunate to know Howard Temin when I was a grad student at Wisconsin. I worked in his lab briefly and even shared a Thanksgiving dinner at his home one year. I can count myself among the few who have lost to Howard Temin at Clue!
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