GAO re­port tracks the growth of an $89B drug R&D sec­tor as bio­phar­ma sales soared

Just how much does phar­ma re­al­ly pay for drug re­search and de­vel­op­ment, how does that ac­tu­al­ly stack up as a per­cent­age of sales and who cov­ers the bill for ba­sic drug re­search?

The US Gov­ern­ment Ac­count­abil­i­ty Of­fice (GAO) took that task on and came up with some in­trigu­ing num­bers that say a lot about the size of the R&D in­dus­try and some key un­der­ly­ing trends be­hind the spend. One fig­ure demon­strat­ing how per­son­al health­care spend­ing grew from 7% in the ’90s to 12%, al­most dou­bling in the process, al­so un­der­scores why drug pric­ing has be­come a hot po­lit­i­cal is­sue that shows no sign of wan­ing.

While check­ing a va­ri­ety of sources, the GAO re­searchers ze­roed in heav­i­ly on the num­ber crunch­ing done by the Na­tion­al Sci­ence Foun­da­tion on the R&D spend­ing re­port­ed by US phar­ma com­pa­nies and the US-based R&D done by over­seas com­pa­nies. Be­tween 2008 and 2014, when it had a full set of num­bers to look at, the hard dol­lars spent jumped from $82 bil­lion to $89 bil­lion, a hike of 8.5%.

This all was oc­cur­ring while com­bined phar­ma and biotech sales soared from $534 bil­lion in 2006 to $775 bil­lion in 2016 — a 45% in­crease. But it’s al­so im­por­tant to note that the biotech R&D num­bers col­lect­ed by the GAO gy­rat­ed rad­i­cal­ly from one year to the next, un­der­scor­ing just how hard it is to track the spend by a wide range of small­er, of­ten pri­vate, com­pa­nies.

So how does the R&D spend re­late to ad­ver­tis­ing and pro­mo­tion, a sub­ject that phar­ma crit­ics in par­tic­u­lar like to use to vex ex­ecs with? The re­port cites an es­ti­mate rang­ing from 11.5% to 14.2% for an av­er­age of 13% as the per­cent­age of sales re­served for R&D cost. Those fig­ures eas­i­ly dwarf the 7.6% spent on ad­ver­tis­ing tracked by Quin­tiles­IMS (now IQVIA), though the GAO notes that there are a va­ri­ety of fig­ures be­ing bat­ted around there.

There’s no ques­tion, says the GAO, that the NIH cov­ers the bulk of the tab for ba­sic re­search, with phar­ma clear­ly more in­ter­est­ed in de­vel­op­ment than pre­clin­i­cal work.

Bio­med­ical re­search took a def­i­nite hit in the pe­ri­od that the GAO cov­ered, with NIH fund­ing drop­ping 3.8%. The $26 bil­lion in re­al dol­lars spent in 2014 was a steep drop from the $32 bil­lion shelled out in 2010, un­der­scor­ing the rel­a­tive pauci­ty of fed­er­al cash that has stirred wide­spread calls to do bet­ter.

The NIH al­lo­cat­ed $13.6 bil­lion for ba­sic re­search in 2014, more than twice the $6.3 bil­lion re­port­ed by phar­ma com­pa­nies.

And as we’ve been track­ing, out­sourc­ing con­tin­ues to gain a grow­ing share of the R&D dol­lar. The gov­ern­ment re­port notes that while 25% of re­search was farmed out by phar­ma in 2008, that fig­ure grew to 35% in 2014.

En­her­tu picks up an­oth­er win for As­traZeneca and Dai­ichi Sankyo, join­ing the pri­or­i­ty re­view lane for gas­tric can­cer

Five months after Enhertu received twin breakthrough therapy designations, AstraZeneca and Daiichi Sankyo are one step closer to nabbing another approval for their potential blockbuster drug.

The companies announced Wednesday morning that their billion-dollar antibody-drug conjugate has received priority review for HER2 positive metastatic gastric cancer. Already approved in the US for third-line metastatic breast cancer patients that are HER2 positive, Enhertu’s gastric cancer PDUFA date is scheduled for the first quarter of 2021.

Patrick Soon-Shiong at the JP Morgan Healthcare Conference, Jan. 13, 2020 (David Paul Morris/Bloomberg via Getty Images)

Af­ter falling be­hind the lead­ers, dissed by some ex­perts, biotech show­man Patrick Soon-Sh­iong fi­nal­ly gets his Covid-19 vac­cine ready for a tri­al. But can it live up to the hype?

In January, when dozens of scientists rushed to start making a vaccine for the then-novel coronavirus, they were joined by an unlikely compatriot: Patrick Soon-Shiong, the billionaire doctor most famous for making big, controversial promises on cancer research.

Soon-Shiong had spent the last 4 years on his “Cancer Moonshot,” but part of his project meant buying a small Seattle biotech that specialized in making common-cold vectors, called adenoviruses, to train the immune system. The billionaire had been using those vectors for oncology, but the company had also developed vaccine candidates for H1N1, Lassa fever and other viruses. When the outbreak began, he pivoted.

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Jude Samulski, Marianne De Backer

Bay­er buys a biotech ‘race horse’ with a $4B deal — $2B in cash — aimed at go­ing big in­to gene ther­a­py

In the latest sign that Big Pharma wants a leading place in the push to develop a new generation of cell and gene therapies, Bayer is stepping up today with a $2 billion cash deal to buy out one of the fast-moving pioneers in the field, while adding up to $2 billion more in milestones if the new pharma subsidiary can deliver the goods.

As part of a continuing series of deals engineered by Bayer BD chief Marianne De Backer, the pharma player has snapped up Asklepios, more commonly referred to in more casual fashion as AskBio. And they are paying top dollar for a Research Triangle Park-based company that raised $225 million a little more than a year ago to back the brainchild of Jude Samulski, the gene therapy pioneer out of the University of North Carolina Gene Therapy Center.

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Sci­en­tists warn Amer­i­cans are ex­pect­ing too much from a coro­n­avirus vac­cine

The White House and many Americans have pinned their hopes for defeating the Covid-19 pandemic on a vaccine being developed at “warp speed.” But some scientific experts warn they’re all expecting too much, too soon.

“Everyone thinks COVID-19 will go away with a vaccine,” said William Haseltine, chair and president of Access Health International, a foundation that advocates for affordable care.

Christian Rommel (via Roche)

Bay­er fol­lows R&D deal spree by raid­ing Roche's can­cer group for its new re­search chief

The day after Bayer signed off on a $4 billion deal designed to put the company among the leaders in gene therapy development, the pharma giant has recruited a new chief for its R&D division. And they opted for an expert in the cancer field.

Christian Rommel, Roche’s head of discovery and early-stage oncology development, has been tapped to take over the job. Joerg Moeller, who got the top research post after early- and late-stage development roles were combined 2 years ago, is hitting the exit “to pursue other career opportunities.”

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Albert Bourla, AP

UP­DAT­ED: Where's the Pfiz­er ef­fi­ca­cy read­out? CEO Bourla says 'soon,' but you're go­ing to have to wait for it

Pfizer CEO Albert Bourla had promised repeatedly that the pharma giant would know if its leading Covid-19 vaccine is effective by the end of this month — now just a few days away.

Instead, the company reported early Tuesday that it has yet to conduct any interim efficacy analyses. And it won’t now until sometime next month.

The news was included in a slide for their Q3 report.

In the morning Q3 call with analysts, Bourla says that they expect efficacy data “soon,” but noted that they wouldn’t be able to say anything until all the administrative work was done on the interim, which would take about a week. And he added that Pfizer isn’t going to say anything else about that hot topic until they have the data in hand.

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Charles Baum, Mirati CEO

UP­DAT­ED: Mi­rati plots a march to the FDA for its KRAS G12C drug, breath­ing down Am­gen’s neck with bet­ter da­ta

Mirati Therapeutics $MRTX took another closely-watched step toward a now clearly defined goal to file for an approval for its KRAS G12C cancer drug adagrasib (MRTX849), scoring a higher response rate than the last readout from the class-leading rival at Amgen but still leaving open a raft of important questions about its future.

Following a snapshot of the first handful of responses, where the drug scored a tumor response in 3 of 5 patients with non-small cell lung cancer, the response rate has now slid to 45% among a pooled group of 51 early-stage and Phase II patients, 43% — 6 of 14 — when looking solely at the Phase I/Ib. Those 14 patients had a median treatment duration of 8.2 months, with half still on therapy and 5 of 6 responders still in response.

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No­var­tis CEO Vas Narasimhan signs off on a $231M deal to try some­thing new in the R&D fight against SARS-CoV-2

Patrick Amstutz was baptized by pandemic fire early on.

He and colleagues attended the notorious Cowen conference in early March that included some of the top Biogen execs who helped trigger a superspreader event in Boston. Heading back to his post as CEO of Molecular Partners in Switzerland, the outbreak was sweeping through Italy, triggering near panic in some quarters and creeping into the voices of people he knew, including one friend on the Italian side of the country.

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Three years in­to a PhI­II pro­gram for a failed Duchenne MD drug, Cataba­sis hauls down the flag and ad­mits de­feat

Three years ago, Catabasis CEO Jill Milne and the crew insisted they had found good reason for great cheer once they plumbed the data from their failed study for the Duchenne MD drug edasalonexent. Plunging into the extended open-label data, they said, you could find solid evidence of efficacy. And that justified a try in Phase III.

But they were wrong.

Monday, after the bell, the little biotech acknowledged that their pivotal attempt following the mid-stage flop was another failure. The primary, change in baseline on the North Star Ambulatory Assessment, and the secondary on timed function tests both came up short of statistical significance.