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Irrational Exuberance

Many people at pharmaceutical companies never bought all the hype surrounding the Human Genome Project. As Shapiro puts it, “I think it’s fair to say that there was a substantial amount of irrational exuberance’ about the genome. People who didn’t know much about science felt that once you had the human gene sequence, basically you were a significant portion of the way to the goal. And anybody who really knew anything about this knew that maybe you were just beginning to start the ball game at that point. You were nowhere near the goal.”

Indeed, most drug company executives appear to understand that the transformative power of genomics, proteomics, and other related technologies will take time to exert itself. Iain Cockburn, a Boston University economist who follows the drug industry, predicts that it will take on the order of a decade for the new technologies to have an impact. “The clock of drug discovery has speeded up, in part because of the culture of the biotechs,” he says. “But reducing all these technologies to practice will be a long and difficult process. It’s not going to shorten drug discovery to two years.”

Even a slight increase in the rate of drug discovery would dramatically change the formula for success in the business, however. And that is why Novartis’s new institute is merely the largest and most visible example of the rush by pharmaceutical companies to spend enormous amounts of money to gain the smallest edge from the new biology. “I’m not sure that many people know how to integrate all these aspects,” said Vonderscher. But, he added, “It’s the groups that integrate all these elements the fastest and the best that will be the winners.” And if genomics and other new approaches can increase the industry success rate by a mere 10 percent, no one will be talking about problems in the pipeline.

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Tagged: Biomedicine

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