Richard Scheller: Pharmaceutical Market Realities

From the concept of maybe this molecule.

Would work in this disease to actually.

Marketing the drug is, well, it depends. If it went incredibly fast, it could be 10 years, it's more like 15 years. And the average cost is about one and a half billion dollars to get it to the market.

Now, the.

Well, and the one and a half.

Billion includes the failure.

So that's taken into account.

So how many make it?

Well, that varies from company to company.

I would say probably on the average 10% make it. For us, it's probably more like 25%.

But I think the industry is going to do much, much better in the next decade. And the reason is that there's been.

An explosion in knowledge about biology.

What I think was happening in the industry in the 80s and the 90s, there were a bunch of successes.

Drug companies, Merck, Pfizer, Roche, they were.

Making tons of money. And then they're saying, but we got.

To stay a growth company, we need to grow.

So they gave a lot of money.

To heads of R and D. But frankly, there weren't very good targets. But what is a head of RD supposed to do? Say, I don't know what to do.

There aren't very good targets here.

Take the money back?

No, of course not. They spent the money on lousy targets. But.

During that time there was a tremendous revolution in the understanding of biology.

That was taking place, which as I.

Said, is partially why I moved to industry.

And I think that now there are incredible targets that we work on.

Think about cancer. You take the cancer, you take the tumor, you sequence the DNA of the tumor, and you sequence the DNA of.

The normal tissue and you find out.

What genes are mutated, what genes are.

Actually causing the cell to be a.

Cancer cell, and then you target those.

Is that going to work?

Yes, it's going to work.

They are working. We know they work.

But that is just terrific sort of pre clinical validation.

Those are the kinds of things that.

You want to work on versus not.

Knowing what to work on.

So it's an expensive and difficult process. Also, the industry is facing a lot of headwinds from various countries, including our country, on being willing to pay for prescription drugs. Some of our drugs are extremely expensive. If we make a drug for a certain cancer and they're 10,000 patients per year, it's not unusual to charge 50.

$60,000 a year for the drug, which.

We have to in order to basically recoup the investment. But look, if you're going to live longer, we think it's delivering.