12 - Funding and Economics of Drug Development (S1E12)

Welcome back, everyone. Today we're going deep
on something that I think we all kind of take
for granted. How a new drug actually gets from
a scientist's, you know, like a lab somewhere
to a pharmacy where you can pick it up. Yeah.
Kind of wild to think about. It is. It's an amazing
process. It takes a long time. You're talking
sometimes over a decade. Wow. And it costs a
huge amount of money. We're talking billions
of dollars to bring a new medication to market.
OK, so let's dive in. You said over a decade,
like 10 to 15 years. That's right. What makes
it take so long? Well, there's a lot that goes
into it. First, you have the research and development
phase. And that can take years in itself. And
that's just the beginning. Oh, wow. You have
scientists who are working tirelessly trying
to identify promising drug candidates. They're
basically looking for a needle in a haystack.
You know, they're looking for that one molecule
that might have potential to actually work against
a specific disease. So even finding a potential
drug takes years. Absolutely, yeah. And once
they've identified it, then it needs to go through
all this rigorous testing. It starts with preclinical
research in the lab. They use cells and animals
in the lab, and this helps determine the basic
safety and efficacy of the drug. Is it safe?
Does it actually seem to work? Before they even
think about going to human testing. Yeah, I was
gonna say, you wouldn't wanna jump straight to
testing it on people if you have no idea if it's
even safe. Exactly, yeah. But even after those
preclinical stages, there are multiple phases
of what are called clinical trials, and that's
where you're actually testing the drug in humans.
Each of these phases involves larger and larger
groups of people. They focus on different aspects.
You're looking at safety, what's the right dosage,
and then how effective is it really? And this
whole process can take years to complete. I can
imagine. And each one of those stages probably
comes with its own price tag, right? Yeah, you
guessed it. The price tag for developing a new
drug is it can be astronomical. Sometimes it
reaches into the billions of dollars. Wow. Yeah.
And think about all the people involved. You've
got huge teams of scientists. You've got countless
experiments. You've got all those clinical trials,
all the people involved in that. And then there's
the regulatory hurdles on top of that. Speaking
of regulatory hurdles, where does the FDA, the
Food and Drug Administration, play into all of
this? Oh, they're essential. The FDA has this
crucial job of ensuring that any new drug that
hits the market is both safe and effective for
the public. Right. So they set really high standards.
Pharmaceutical companies have to provide tons
of data, like mountains of data, from all their
clinical trials just to prove that the drug works
and that it doesn't pose any unacceptable risks.
So it's not just about discovering the drug.
It's about proving that it's actually safe and
effective for people to take. Yeah, exactly.
And all of this takes even more time and even
more money. Right. And honestly, you know, this
whole process, it's a huge gamble for pharmaceutical
companies. I bet. Only a tiny fraction of drug
candidates, the ones that start out, you know,
in the early stages of research, they actually
make it all the way to market. It's kind of like,
I don't know, you're placing a high stakes bet
and you're just hoping that your drug is going
to be the winner. So that's where I get really
curious. because we keep saying billions of dollars.
Yeah. So who's actually putting up the money
for all of this? It's a mix. There are a few
different sources. OK. So you've got private
investment. There are venture capitalists. They
see potential for, you know, a big return down
the line. There are private equity firms that
are looking for more long term investments. Right.
And of course, you've got the big pharmaceutical
companies themselves. They're investing their
own money into research and development. OK,
so it's not like one big pot of money. No, it's
not. And on top of that, you also have government
funding. Right. And that often comes in the form
of grants from organizations like the National
Institutes of Health or NIH. And these grants,
they're so important because they often support
those very early stages of research, you know,
when a project is just getting started. Right.
So maybe it's not profitable yet for a big company
to get involved. Exactly. And then there's another
way that companies raise capital. They go public.
They'll sell shares of stock to the public, and
this can bring in a ton of cash, but it also
puts pressure on them to really deliver results
for their investors. Oh, yeah, I bet. So we've
got this high -stakes, high -cost world. You
know, money's coming from all these different
places, but let's get back to the science for
a second. OK. So we've talked about discovering
the drug molecule itself, but what happens after
that? Well, that's where formulation comes in.
Formulation. Formulation, yeah. It's super critical,
but a lot of people don't really know about it.
Okay. And, you know, it's not just about finding
the right molecule. It's about how you deliver
that molecule to the body. So it's like designing
the vehicle to get the drug where it needs to
go. That's a great way to put it. And this is
where things get really complicated. You have
to think about how the drug will be absorbed,
how quickly it breaks down in the body, whether
it actually gets to the target where it's supposed
to go, what are the potential side effects, you
know. Right. It's a balancing act. It sounds
like a lot to juggle. It is. And this is where
this deeper understanding of something called
in vitro. in vivo correlation, we call it IVIVC,
comes in. It's a way to bridge the gap between
what's happening in the lab and how the drug
actually behaves in the real world. Okay, I'm
intrigued. What is IVIVC? It's basically like...
It helps scientists predict how a drug will act
in the body based on how it's behaving in lab
tests. And it's really important for optimizing
the formulation of the drug, making sure that
it's absorbed properly, that it actually gets
where it needs to go, and that it produces the
effect that it's supposed to produce. It's like
a crystal ball. You can see how it's going to
work before you even test it in people. In a
way, yeah. IVIVC can save pharmaceutical companies
a lot of time and money. I bet. because it helps
them identify those promising formulations early
on, and that reduces the need for a lot of expensive
and time -consuming human trials. That makes
sense. Yeah, and a well -formulated drug, that
can be a major advantage for a company. If you
can deliver a drug that works really well and
has minimal side effects, that makes a huge difference
in the marketplace. Yeah, I bet. This whole formulation
concept is fascinating. It's amazing how it goes
into designing the drug even after you've discovered
the actual active ingredient. It really shows
you how complex drug development is. It's way
more than just finding the right molecule. It's
about this clever... engineering and understanding
biology, and a lot of trial and error, to be
honest. To create a product that really, truly
delivers. It's a journey, and the whole thing,
the whole journey is really driven by economics.
Right, we've been talking about these huge costs,
but what does that mean for people? Why are some
medications so expensive? That's something I
think a lot of us wonder about. Yeah. That's
a fair question. And I think it's important to
consider those massive research and development
costs that we talked about, because the pharmaceutical
companies need to recoup those costs somehow.
And it's not just about covering the cost of
that one drug that made it to market. It's about
funding that whole system, including all the
failures along the way. All the ones that didn't
make it. Exactly. So in a way, each successful
drug has to kind of carry the weight of all the
ones that didn't. But of course, you know, it's
not that simple either. There's also, you know,
market forces and competition to think about.
In some cases, a company might be the only one
that's making a particular drug. Maybe it's a
life -saving drug, and that allows them to set
the price a bit higher. Right, because if you
need it, you need it. Exactly. But it also raises
some ethical questions, you know, about access
and affordability. Right. Especially for, you
know, essential medications. Yeah, the ones that
people really need. And that's where government
regulation comes in. In a lot of countries, governments
will, you know, play a role in negotiating drug
prices or setting some kind of limits to prevent
companies from charging outrageous amounts. Right.
But it's a balancing act, right? Because if you
have strict price controls, that can also discourage
companies from investing in future research.
Right. They need to make money somehow. Yeah,
so it's about finding that sweet spot, you know,
where you're encouraging innovation, but you're
also making sure that people can afford the medications
they need. Right, right. And then you can't forget
about the insurance companies either. Oh, yeah.
They negotiate prices with the drug manufacturers
and they decide which drugs they're actually
going to cover under their plans. And that has
a big impact on what patients end up paying out
of pocket. Yeah, that's a whole other layer of
complexity. So it sounds like there are all these
different factors that go into drug prices. It's
a complex system, but I think if we understand
how it works, that can help us navigate it a
little bit better. Right. Be better informed.
And advocate for more transparency and fairness
and drug pricing. Yeah, for sure. So it sounds
like, wow. economics drives a lot of the decisions
in drug development. There's also this tension
between the science and then affordability and
just the ethics of it all. Yeah, you've hit the
nail on the head. And it's not all doom and gloom
either. I mean, there's incredible innovation
happening all the time. I'm really fascinated
by the evolution of drug delivery methods. We're
moving beyond just traditional pills and injections.
There's some really cool stuff happening. What
kind of stuff? Well, take nanoparticles, for
example. They're these tiny, tiny particles.
And scientists are figuring out ways to use them
to deliver drugs directly to specific cells or
tissues in the body. Wow. Yeah, it's pretty amazing.
Instead of bombing the whole city, you're sending
a targeted missile right to where it needs to
go. So you're avoiding all that. like collateral
damage. Exactly. And that means you can minimize
side effects because the drug is only going where
it's needed. Right. And it can also make the
drug more effective because you're getting a
higher concentration of it right at the target
site. That's cool. And I mean, we're even seeing
things like microchips and implantable devices
that can release drugs over time. Wow. So it's
like a slow release. Yeah. On a controlled schedule,
it's really, really cool. Like science fiction
coming to life. It is, but it's not without its
challenges, of course. One of the biggest hurdles
is making sure that these new materials and devices
are safe to put inside the body. Yeah, I can
imagine that's a big one. And then there's the
challenge of actually figuring out how to manufacture
these things on a large scale while still maintaining
that precision and quality control. Right, you
don't want to mess it up. Exactly, but it's such
an exciting field and it has so much potential
to... you know, revolutionize how we treat diseases.
Yeah, absolutely. And it brings us back to what
we were talking about before with formulation,
because even with these, you know, super high
-tech delivery systems, you still have to make
sure the drug itself is formulated correctly.
Right. It has to be stable. It has to be effective.
It has to be compatible with whatever delivery
method you're using. Right. So formulation is
still crucial. Yeah. even as the technology gets
more and more advanced. So it's all connected.
It's all connected, yeah. And speaking of connectedness,
one area I'm really excited about is personalized
medicine. Oh, yeah. I've heard that term. Yeah.
And it's basically the idea that you can tailor
treatments to each individual patient. Oh, wow.
Based on their unique genetic makeup, their lifestyle,
their environment, all of that. Interesting.
Yeah. So imagine a future where your doctor can
analyze your genes. OK. And then prescribe a
drug. that's designed specifically for you to
maximize its effectiveness and minimize the side
effects. Is that actually happening, or is that
more like a future thing? We're starting to see
it in certain areas. It's still early days, but
in cancer treatment, for example, there are targeted
therapies now that only work for patients with
specific genetic mutations. Oh, wow. Yeah. So
it's happening. It's still early days. It holds
so much promise for the future of healthcare.
It's pretty amazing. It is. But with all this
amazing stuff happening, you know, we've been
talking about the challenges and the economics
and the cutting edge science, but what about?
the people involved. Oh, that's so important.
Yeah. You know, at the end of the day, drug development
is about people. Yeah. It's about scientists
who are driven by curiosity and this desire to
help others. It's about patients who are facing
these life -altering illnesses. Right. And health
care professionals who are trying to provide
the best possible care. Yeah. It's easy to get
caught up in all the technical details and the
numbers, but it's crucial to remember that there
are real people at the heart of every scientific
breakthrough and every new medication that reaches
the market. Absolutely and you know for every
drug that's successful there's so many stories
of you know dedication perseverance and honestly
sometimes heartbreak too. Yeah. It's a long road.
It is a long and hard road and there are no guarantees.
So while we're talking about you know these billions
of dollars being invested we shouldn't forget
about the human capital, right? All those countless
hours of research, the failed experiments, all
the emotional investment that goes into this.
That's right. It's often that human element that
drives the innovation. It pushes the boundaries
of what's possible. Behind every groundbreaking
discovery, there's a team of passionate individuals
who are willing to dream big and work tirelessly
to make those dreams a reality. Yeah, and their
work has changed so many lives. But what about
the stories of the drugs that don't make it?
What happens to those research projects? Is there
anything we can learn from them? Oh, absolutely.
That's a great question. And I think, you know,
in drug development, the failures are just as
important as the successes. Really? Yeah, because
each failed experiment, each drug candidate that
doesn't you know, make it through clinical trials.
It provides valuable insights that can then inform
future research. So it's not about seeing those
failures as setbacks. It's about, you know, using
them as opportunities to learn and refine our
approach. To get better. Exactly. And sometimes
those failures they can lead to breakthroughs
in other areas. You know, maybe a drug that's
ineffective for one condition might actually
show promise for a completely different one.
Oh, wow. Or a discovery made during one research
project could spark a whole new line of inquiry.
It's like that saying, every cloud has a silver
lining. That's it. And that willingness to embrace
failure, to learn from it, and just keep pushing
forward, that's at the heart of scientific progress.
You have to acknowledge that the path to discovery
is rarely straightforward. And setbacks are just
part of the process. Right. So those failed projects
are actually still contributing to the advancement
of science, even if they don't result in a new
drug that people can take. They absolutely are.
They're adding to our collective knowledge. They're
helping us understand biology, disease. and those
drug development processes better. And sometimes
they lead to those unexpected discoveries that
can have these huge implications. Right, so it's
really important for scientists to communicate
with each other. Oh yeah, absolutely. Open communication
and collaboration, that's so important. Yeah.
It's not just about sharing your successes, it's
about sharing your failures too. Right. That
way we can all learn from each other's mistakes
and, you know, avoid making the same mistakes
twice. It can really accelerate progress. Okay,
so while we're... celebrating all the amazing
new drugs that are changing lives. Let's also
remember to, you know, acknowledge those research
projects that maybe they didn't quite make it,
but they paved the way. Exactly. They deserve
recognition for their contribution to science.
And they taught us valuable lessons. You know,
it's a reminder that drug development is a team
effort. It's a journey that we're all on together,
you know, working towards a healthier future
for everyone. So, you were saying earlier that
a lot of drug development is driven by economics,
but what about the diseases that maybe they don't
attract a lot of investment because they mainly
affect people in poorer countries? That's a huge
issue. Yeah. And it raises some really important
ethical questions about access and equity in
health care. It's just a sad reality that the
diseases that mostly affect people in low income
countries, they often don't get as much funding
for research and development. Right. It's like
market forces aren't working for those people.
Exactly. And so it's really a humanitarian issue.
Thankfully, there are some organizations and
initiatives that are trying to address this.
Oh, good. Yeah. There are philanthropic foundations.
for example, that specifically fund research
on neglected tropical diseases. And those are
the diseases that disproportionately affect people
in developing countries. So it's about finding
alternative ways to fund those projects. Yeah,
and prioritizing research based on human need,
not just on market potential. And there are also
some new models for drug development that are
being explored that are more sustainable and
more equitable. For example, there are some organizations
that are looking at partnerships between the
public and private sectors, where governments
and nonprofits would share the costs and the
risks of developing drugs for those neglected
diseases. So those collaborations could be a
way to make sure that those lifesaving medications
actually reach the people who need them, even
if they can't afford to pay a lot for them. That's
the hope. And it's really encouraging to see
that these initiatives are gaining momentum.
It's a reminder that while economics is a factor,
Our ultimate goal should be to use scientific
innovation to improve global health and well
-being for everyone. I love that. Yeah. And that's
a great note to end on. It's like, you know,
access to health care is a basic human right.
Absolutely. And we all have a responsibility
to make sure that the benefits of scientific
progress reach everyone, no matter where they
live or how much money they have. I couldn't
agree more. It's about using the power of innovation
to create a healthier and more equitable future
for all. It's really inspiring to see how science
and the business side of things, how they can
actually come together to make a difference in
the world. But I'm curious, what are some of
the biggest success stories that you've seen
in drug development? Oh, there are so many. It's
hard to pick just a few. But one that always
comes to mind is the development of penicillin.
Oh, yeah, penicillin. That was huge. I mean,
talk about a game changer, right? Yeah. It completely
revolutionized how we treat bacterial infections.
I mean, it saved countless lives. It's amazing
to think about how something you know seemingly
so simple could have such a big impact. It is
and it really shows you the power of you know
just basic research and being open to those unexpected
findings you never know where the next breakthrough
is going to come from. That's true. What about
the polio vaccine? I mean, that was a huge one,
too. Oh, absolutely. The polio vaccine is another
incredible story. It's a testament to human ingenuity
and collaboration, you know, people coming together
to solve a really big problem. Yeah. I mean,
that was devastating disease. So many children
were paralyzed by it. It's amazing to think that
now in many parts of the world is practically
eradicated. Yeah. That's huge. It is. And it
shows you what's possible when science and funding
and those public health initiatives all align.
You know, they're all working together towards
a common goal. Right. And, you know, more recently
we've seen incredible progress in treating HIV
AIDS. Yeah, that's true. What was once a death
sentence is now a manageable chronic condition
for many people. Yeah, that's amazing. It really
shows how far we've come. And these advances
aren't just about living longer. They're about
living better. improving quality of life for
people. That's such an important point. It brings
us back to the human side of drug development.
Behind every successful drug, there are all these
individual stories of people whose lives have
been completely transformed. I mean, people who
might have faced a debilitating illness or even
death, they now have a chance at a healthy future.
It's those stories that make this whole field
So meaningful. Yeah. It's not just about, you
know, molecules and profits. It's about making
a real difference in people's lives. And it's
not always about those blockbuster drugs for,
you know, the really common diseases. You're
right. There's also important work being done
on those rare diseases, you know, the ones that
don't affect as many people. Corphaned drugs,
yeah. Yeah. And there's often less financial
incentive to develop those drugs. That's true.
But there are researchers and companies who are
doing it anyway. Yeah, they're committed to helping
those patients in need. It's inspiring, you know,
even when the market is really small, they're
still tackling these challenges. It's like there's
an ethical dimension to drug development. Like
everyone deserves access to those treatments,
no matter how rare their condition might be.
I agree. And that's where, you know, government
incentives and nonprofit organizations can really
make a difference. They can help support that
research in those areas where, you know, maybe
the profits aren't as big, but the need is still
huge. Yeah, for sure. So while economics plays
a huge role in drug development, It's clear that
there's also this human element. Absolutely.
You know, this drive to help people alleviate
suffering. That's what motivates a lot of the
people in this field. You said it perfectly,
and I think that's what makes this whole field
so fascinating. It's this intersection of science,
economics, ethics, human stories. It's a story
that's still being written, you know? There are
new chapters all the time. Yeah, that's cool.
Well, we've covered a lot of ground today, from
the business side of pharmaceuticals to all the
cool science that's happening. But if our listeners
could only take away one thing from this whole
conversation, what would you want it to be? I
would say this. Drug development is a long and
complex process. It's not easy, and there are
no guarantees. It's a balancing act. You have
to balance scientific innovation with economic
realities, and then the ethical responsibility
to improve human health. It's not easy, but it's
a journey worth taking. I agree. Because the
potential rewards are huge. They are. And it's
a journey that requires people working together.
perseverance, and a deep understanding of not
just the science, but also the human stories
behind it all. So the next time you pick up a
prescription, think about the incredible journey
that that drug took to get there and all the
complex economics that made it possible. And
remember, the story's not over. Drug development
is still happening. There are tons of challenges
out there. But there's also so much opportunity
for innovation and progress. This is a field
that has the power to transform lives and shape
the future of health care. Thank you so much
for joining us on this deep dive. It's been fascinating.
And we'll be back next time with another deep
dive into a new topic. Until then, stay curious.