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Donald W. Light Global Drug Discovery: Europe Is Ahead Health Affairs, September/October 2009; 28(5): w969-w977. [Abstract] [Full Text] [Figures Only] [PDF] [Reprints & Permissions]

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Global Drug Discovery Report Paints Misleading Picture

Ken Johnson   ( 26 August 2009 )

Global Drug Discovery: Comparing Apples To Apples

Jerry Norris   ( 26 August 2009 )

Questionable Assessment Of R&D Productivity

Yann Gaston-Mathé   ( 27 August 2009 )

Light Paints Distored Picture of U.S. Pharmaceutical R&D Efforts

Lori M. Reilly, Richard I. Smith   ( 25 September 2009 )

Author's Response to Misleading Comments

Donald W. Light   ( 18 March 2010 )

Global Drug Discovery Report Paints Misleading Picture 26 August 2009
Ken Johnson, Senior Vice President PhRMA Send comment to journal: Re: Global Drug Discovery Report Paints Misleading Picture Ken.Johnson{at}phrma.org Ken Johnson	Unfortunately, this paper paints a distorted picture, gives short shrift to medical advances made possible by America’s pharmaceutical research and biotechnology companies, and ignores the chilling effect that government price controls have on innovation. Let there be no mistake: America leads the world in developing innovative medical therapies that have revolutionized health care, helping patients to live longer, healthier, and more productive lives. Cancer patients are living, on average, three years longer -- and 83 percent of those survival gains are due to new treatments, including medicines. Heart failure and heart attack deaths fell by nearly half from 1999 to 2005. And blood pressure medicines prevented 86,000 premature deaths from cardiovascular disease and avoided 833,000 hospitalizations for heart attack and stroke, according to a 2007 study in Health Affairs. These advances were driven by U.S.-based medical innovation. According to the Tufts Center for the Study of Drug Development, a staggering 75 percent of new drugs approved worldwide from 2005 to 2007 were first introduced in the U.S. This home-grown innovation not only saves lives, but such research employs millions of Americans and pumps billions of dollars into our economy. In the not-too-distant past, the U.S. was not the world’s medicine chest. Here, progressive public policies and congressional action have encouraged such research. By contrast, European leaders’ embrace of ill-conceived public policies -- including government price controls and sluggish regulatory decision making -- chilled innovation there and raised doubts among private investors who help to underwrite research that creates the next generation of life-saving medicines.
Global Drug Discovery: Comparing Apples To Apples 26 August 2009
Jerry Norris, Director Center for Science in Public Policy, Hudson Institute Send comment to journal: Re: Global Drug Discovery: Comparing Apples To Apples jnorris289{at}aol.com Jerry Norris	Donald Light compiled an impressive set of Notes in the conduct of his research. However, Note 23 isn't representative of P.M. Danzon's findings on international drug pricing. In her 1993 research, she found that many governments, such as Japan, Denmark, the U.K., and France, subsidize the R&D components of their pharmaceutical industries, making international comparisons difficult. She also found that most governments other than the U.S. regulate prices either directly or indirectly. France and Italy directly regulate prices at launch and subsequent rates of increase. Germany, the Netherlands, and Denmark operate reference price systems and thereby exert strong pressure on prices charged by manufacturers. The U.K. operates a system of profit regulation that constrain prices to yield no more than a target overall rate of return on capital. If Light had compared apples to apples, the following statement would have been greatly moderated: "Congressional leaders and others concerned about high prices of new patented drugs will be heartened by this analysis, because lower European prices seem to be no deterrent to strong research productivity." In France, the government decides which drugs to use and at what prices. American pharmaceutical companies must either accept the dictated prices or risk losing market share. So, they sell at higher prices in the U.S., in effect subsidizing French citizens -- who get the same drugs, but at lower prices.
Questionable Assessment Of R&D Productivity 27 August 2009
Yann Gaston-Mathé, Sr Director, Discovery & Innovation Strategic Planning Ipsen Send comment to journal: Re: Questionable Assessment Of R&D Productivity yann.gaston-mathe{at}laposte.net Yann Gaston-Mathé	Although the analysis is very instructive, it seems to me that there is a concern in the methodology, which weakens the conclusions drawn from the data: (1) The "area" R&D productivity ratio used is: (no. of drugs found by companies headquartered in the area) / (total R&D costs in the area). (2) The numerator and the denominator do not refer to the same thing: a company headquartered in the U.S. can conduct its R&D activities in Europe, or vice versa. Indeed, many big European pharma companies (Roche, Novartis, GSK, etc.) have important research sites based in the U.S. and may therefore conduct more research in the U.S. than in Europe It would be more accurate and conclusive to assess area R&D productivity by assessing the number of drugs that were originated (at discovery stage) in a research center (pharma company or academia) located in the area and dividing it by the cost of Research (money spent on discovery, prior to development) in the area. Such an analysis would provide a more realistic picture of the real productivity of the U.S. vs. that of Europe.
Light Paints Distored Picture of U.S. Pharmaceutical R&D Efforts 25 September 2009
Lori M. Reilly, Vice President PhRMA, Richard I. Smith Send comment to journal: Re: Light Paints Distored Picture of U.S. Pharmaceutical R&D Efforts lreilly{at}phrma.org Lori M. Reilly, et al.	Donald Light inaccurately argues that recently Europe has been more productive than the U.S. in biopharmaceutical R&D and ignores the significant innovations achieved in recent years. Light designates a drug’s origin by the location of the innovator company’s headquarters, which is not dispositive of where a drug is developed. For example, numerous EU-headquartered companies have moved large R&D operations to the U.S. To counteract this trend the European Commission recently launched the Innovative Medicine Initiative, stating that “Europe’s pharmaceutical research and development basis has gradually eroded, with new leading-edge technology research units being increasingly transferred out of Europe, mainly to the United States and recently also to Asia.” This is evident in the National Academies finding that the U.S. “supports by far the single largest biotechnology industry.” Moreover, while Light counts only a drug’s first approval, postapproval research for new indications is a central route to advancing patient care. Calfee has noted the fallacy of ignoring post-approval R&D when evaluating innovation; recent research shows that 47% of biologics receive at least one post-approval indication. Finally, in arguing that new drugs provide few benefits, Light ignores dramatic outcome improvements linked to medicines across many conditions. For instance, heart failure and heart attack deaths fell by nearly half between 1999 and 2005 thanks in part to increased medicine use. A Health Affairs article reporting major advances against heart disease noted that targets identified by the pharmaceutical industry “have led to striking, remarkable, and repeated achievement.” Further, the Congressional Budget Office reported in 2006 that “rapid increases . . . in drug-related R&D spending have been accompanied by major therapeutic gains.” Ignoring the centrality of U.S.R&D to biopharmaceutical advances could lead to policies that undermine both medical advances and the economic potential that life sciences hold for the U.S.
Author's Response to Misleading Comments 18 March 2010
Donald W. Light, professor UMDNJ Send comment to journal: Re: Author's Response to Misleading Comments dlight{at}princeton.edu Donald W. Light	Ken Johnson, SVP of PhRMA, asserts that my article "gives short shrift to medical advances" by American companies. But my analysis is based on Grabowski and Wang's sample of all NCEs approved in the U.S., Europe, and Japan, provided to them by IMS. In fact, Grabowski and Wang's methods favored the U.S. by counting NCEs sold in the U.S. but not sold in Europe, while not counting NCEs sold in Europe but not the U.S. If Johnson had read the article, he would have seen that the data are over-generous toward the United States. Johnson's citing of a statistic from the industry's top policy research center is one of many that industry advocates cite that is selective, short-term, or biased. The great strength of the data set used in the article is that it is a total sample over a long period. Further, all classifications and methods were devised by Grabowski and Wang, not me, and used to "prove" that the U.S. has eclipsed Europe in pharmaceutical research productivity. All I did was control for the huge shift of R&D investment to the U.S., which makes this a self-fulfilling prophecy, and asked how productive the two regions were, dollar for dollar. Faston-Mathe, Reilly, and others are correct that the measures are crude and misleading (and also biased towards the U.S.); but these are the measures and data used by PhRMA's favorite economists to "prove" how Europe is all washed up -- as Johnson and Reilly emphasize. Their message is clear: European public policies are "ill-conceived" and "chilled innovation." All new drugs are better, and the quicker that more people take them, the healthier they will be. Any measures taken to weigh the comparative advantage of new drugs to existing ones, or to get good value for money or be concerned about rising costs, are ill-conceived and chill innovation. Jerry Norris raises some interesting facts not considered in the article, but ends with the widely promoted "free rider" claim that lower prices in other countries force Americans to subsidize them. Not true, except by assertion. See the 2005 BMJ article cited in my article. Government and industry reports abroad indicate that companies recover all costs and make a good profit at European prices; so Americans pay super prices for super gross profits, which then fund massive marketing and lobbying costs. But the whole argument depends on a silo-market view of the world that has little to do with how new drugs are sold internationally, and it assumes that one can attribute certain proportions of R&D to country A or B (France and the U.S. in Norris's comment). How would Norris or anyone else persuasively assign such costs in order to verify that French prices require cross-subsidies from American buyers? Much more likely is that U.S. buyers are over-paying and getting poorer value. Johnson and Reilly emphasize how many lives have been saved or extended by new drugs; but such general evidence does not address the question of how many additional lives have been saved or extended by new drugs when independently compared to older drugs and when taking into account other important factors. Nor does it address the detailed evidence that only 1 in 7 new drugs offers significant therapeutic advances, while the other 6 of 7 do not but cost employers and taxpayers billions as they are vigorously sold to physicians and patients, using far more money than is put into R&D. One in seven still results in a steadily growing repertoire of superior new drugs, which could explain the health gains these highly paid officers of the industry's public relations organization emphasize. They do not mention that drugs have become, according to the FDA and others, a leading cause of death and hospitalizations as well.