With President Obama looking to squeeze a bit more revenue out of the pharmaceutical industry, the stakes just keep getting higher for Eli Lilly and Co.’s efforts to develop drugs faster and cheaper.
Lilly is already trying to shave a year or more off the time it takes the company’s scientists to turn a newly discovered drug into an experimental drug tested in humans.
The company wants that process to average just 1,000 days—which is two years, nine months. Currently, it takes Lilly one or two years longer than that, said Andy Dahlem, vice president of the company’s research and development arm, Lilly Research Laboratories.
The industry average is 4-1/2 years, according to PhRMA, a trade group of drugmakers, including Lilly. It takes another decade for a drug to pass through clinical trials and hit the market.
“The drug-development cycle time is taking longer. From a patient perspective, that is unacceptable,” Dahlem said. He wants to meet the 1,000-day goal by 2015.
Lilly is in a hurry about everything these days. It faces the loss of more than half its sales in the next five years due to patent expirations on five of its best-selling drugs. The company can no longer afford to spend as much time (and therefore money) figuring out if a drug is ready for human trials.
Obama’s reforms, if enacted, could complicate things for Lilly. The company and its industry peers support Obama’s efforts to extend insurance coverage to 30 million more Americans (making more of them capable of buying expensive drugs) and reduce the amount Medicare recipients pay out of pocket for prescription drugs.
But Obama’s latest plan, issued Feb. 22, would assess $3.3 billion a year in fees on drugmakers and would insist on $90 million in price cuts for Medicare beneficiaries. Both totals are larger than the industry agreed to last summer.