Industry Insights from Paul Meade, M. Sc, MPH
I have spent the last 30 years directly or indirectly involved with the pharmaceutical industry. I worked for two international pharmaceutical companies and have advised many other pharmaceutical and biotechnology companies over the past few years. So I undoubtedly have a biased view in favor of this industry and its aims to promote health while making a reasonable profit for its research efforts.
While I can appreciate all the activities undertaken by pharmaceutical companies to develop medicines to improve the health of people throughout the world, I can also understand why many people have a jaded view of these companies. The perception that pharmaceutical companies take advantage of sick people and make them pay high prices for medicines to make them better is one that prevails among many societies. Yet, through the invention of antibiotics to control infectious diseases, and vaccines to prevent many childhood diseases, and many other products for a variety of diseases, the pharmaceutical industry has made significant improvements to healthcare. In addition to the high cost of medicines, few people realize that the total cost of pharmaceutical products as a portion of the total healthcare spending in the United States is less than 10%. Yet, many people believe that medicines are far too expensive.
Pharmaceutical companies, for the most part, are reasonably profitable; however, margins have been eroding steadily over the past few decades. This industry is one of high risks and great rewards, where only 1 in 1000 drugs ever make it to the market and the ones that do can take 7-8 years at a cost of over $800 million. So while the rewards can be great, the risks of discovery are also quite daunting. Nonetheless, I believe the cost of medicines will continue to become lower over time, as companies exploit continuous technological improvements and constant refinements of their research processes.
One of the emerging sectors for new profitability and breakthrough improvements for healthcare companies is in the area of personalized medicine–drugs designed to work according to the genetic profile of the patient. Some drugs are effective for a large part of the population; whereas, others are specific to only a few that exhibit specific biomarkers. For instance, one drug, Herceptin, is specific for women with breast cancer that over-express a specific gene.
In the future, pharmaceutical companies will develop many more custom-designed drugs for specific genetic profiles. This way, patients will know if drugs will work for them, based on their respective genetic profiles. This new area of discovery and development will present many challenges to the pharmaceutical industry, but will yield many rewards, not only to the companies that produce these new drugs, but to society as well.
Paul Meade is the president and founder of Thought Leader Select. In the spring of 2010, Paul earned a Master of Public Health degree from the Gillings School of Global Public Health at the University of North Carolina at Chapel Hill. Meade also earned a certificate in ethics from the school’s Public Health Leadership Program.