There are two stories in The New York Timesthat, although not directly related, are the basis for today’s post. The first, by Andrew Ross Sorkin, Do Drug Companies Make Drugs, or Money?, appeared in the Business Section on page B1 on June 3, 2014. The second, by Andrew Pollock, New System for Treating Cancer Seen as Hopeful, appeared on the same page of The New York Times on the same day. Sorkin’s provocatively titled article focused on Valeant Pharmaceutical International’s takeover bid for Allergan and on Valeant’s strategy, which Sorkin characterized as buying pharmaceutical companies with revenues produced by active and successful pharmaceutical research programs and then increasing profits by cutting back on R&D. Sorkin’s article, as the title indicated, posited a tension between focusing on rewarding investors with increased profits and investing in the development of new and innovative therapies. My purpose in highlighting Sorkin’s article alongside Pollock’s is not to take issue with Sorkin’s analysis of Valeant’s business strategy, but to respond to the article’s title question. The answer is that pharmaceutical companies‘primary obligation is to their shareholders and that means their primary objective is to reward those investors with increased profits–that is,“make money.” However, as Pollock’s article about a very promising new class of anti-cancer drugs illustrates, developing new and medically-valuable therapeutics is a major, although not the only, way that pharmaceutical companies seek to earn those increased profits. Now if all I had to say about these two articles is that pharmaceutical companies, like all other businesses, attract and reward investors by making profits and developing important new drugs is a way of making large profits, I would only be stating the obvious.
Last week, FiercePharma contained a story that referred to the superior efficacy of Roche’s newest anti-CD20 antibody Gazyva compared to the original anti-CD20 antibody, Rituxan, in the treatment of chronic lymphocytic leukemia (CLL).1 However, just this week another head-to-head study in CLL, comparing a kinase inhibitor, Ibrutinib, against yet another anti-CD20 antibody, was published in the New England Journal of Medicine.2The study concludes that Ibrutinib was superior to the antibody Ofatumumab in both progression-free survival and overall survival. Now is it also better than Gazyva? Who knows? So let me use this week’s post to make a few additional comments on comparative efficacy. Download PDF