I fear I am boring people over at Brad's blog so I am taking the debate here.
Sebastian writes (asterixes mine)
*"The reason of course is that healthcare innovations can be offered for sale in any country, not just the country in which they were developed. Global private investment in healthcare R&D is driven by the expected return on that investment, which is a function of the global profit pool. The fact that country A spends a ton of money on exotic care should drive investment in R&D not only in country A but in country B, which does not spend a ton of money on exotic care. So long as patents are protected we would expect to see private R&D investment across countries roughly proportional to the population of trained research scientists in those countries. If Merck can make money on a drug in the US it is agnostic as to whether it places its development labs in the US or in another country.
"sd, indeed you are right, and therefore the high rate of medical innovation performed in the USA is not evidence on the effect of US health care financing on innovation."
Your 'therefore' is not correct because there isn't a random distribution of profit-making across countries by pharmaceuticals such that you can substitute "the US" with "Holland" or "France" in the statement. If the largest portion of profits are made in the US (and they are), the US is driving innovation such that innovations in other countries are still incentivized by US profit.*
As for the idea that NIH funds 'most' of the research, I strongly suggest that you look around Derek Lowe's blog at http://www.corante.com/pipeline/
He has a number of good posts on the subject. I would look on the right hand side under "Categories" and consider:
"Me Too" Drugs
Academia (vs. Industry)
Drug Industry History
Patents and IP
(though if you want an overview, the first 2 categories are probably enough).
His overall point is that the contributions of the NIH aren't the 'near-none' that some hyper-market advocates may say, but they aren't anywhere near as important in drug development as people like Waldmann or Angell seem to think.
I can make no sense at all of the argument Holsclaw makes between the asterixes.
Mainly he directs me to Derek Lowe. I am working through topic II Academia (vs. Industry). I come to this argument
"This would make particularly interesting reading for the NIH-funding-discovers-all-the-new-drugs crowd. [snip]Even now, when I tell co-workers in the industry that there are people who believe that pretty much all drugs come right out of from publicly funded research, the usual result is an incredulous stare and a burst of laughter. That’s often followed by a question like “So what is it that I’m doing all day, then?”"
That is, Lowe sets up a straw man with "all" and "pretty much all" and knocks it down. I am not aware of anyone who believes that "pretty much all drugs come right out of from publicly funded research." I am certainly not such a person (as Holsclaw would have known if he had read my comments on the post before writing his own). Lowe then argues that a group of people makes an important contribution by quoting them as authorities. This is a non starter.
There are more substantive arguments in that post and in the post above it but both amount to proving that some academic research does not constitute drug development. One could prove this by discussing work in number theory and philosophy as well.
It is certainly true that some academics identify targets for drugs and others develop chemicals which work in a test tube but are toxic or insoluble or unabsorbable. This does not address the question of whether academics develop useful drugs (some do of course) or the question of the relative importance of the academy and pharmaceutical corporations in drug development.
The measurement of such relative importance requires quantitative data on drugs developed. I will now see if there is any in Lowe's category archive on academia_vs_industry.
One post on how people who shouldn't have PhDs have them.
One post on a result in chemistry made at a non profit research institute which could be useful in increasing productivity in pharmaceutical companies.
Another begins "So, as reader CalProf asked in a comment the other day, what should academic scientists who want to help discover drugs be doing?". So it discusses what Lowe thinks academics should do and not what they, in fact, do. No evidence is presented in support of the views. Lowe's argument, in its entirity, is that drug development requires collaboration between people in different specialties (undoubtably true) and then he writes "It's a lot easier to organize this as a company where everyone is hired to do their specialty, rather than try to run it with whatever post-docs and grad students you have handy."
He thus demonstrates that he has no idea how the academy actual works. He assumes that the academy means one professor and one lab. A post above demonstrates that he reads "Nature". He might have noticed that the affiliations of different authors are often different. It is simply not true that academic research is done with "whatever post-docs and grad students you have handy." When necessary academics in different labs work together, so research teams include more than one professor (you don't say?). It is possible, in the academy, for people of different specialties to work together. Is it common ? I have no more information on that than when I started reading the blog. Lowe does not useful things which academics can do which are not drug development. This is not relevant to Holsclaw's claim.
A post on why he finds his work as exciting as academic work.
A post on Merck's head of research, Peter Kim. Lowe criticizes Kim and notes that he is a transplant from academia. There doesn't seem to me that there is any link between the criticisms and the academic background. Also note that Lowe's views on the academy do not appear to be shared by top management at Merk.
A post which criticizes and article in "ChemBioChem (6, 1749)" which is not, as far as I know, a top journal. Lowe concludes that this article shows what's wrong with academics. Again the fact that some academics do something which is not useful is used to argue that academics don't do things which are useful.
The argument that the results may lead to further research which will yield a useful drug is standard wishful thinking. The publication of the article in "ChemBioChem" does not mean that anyone is convinced.
A post which begins "Adrian Ivinson, a former editor of Nature Medicine and now head of a new research center at Harvard Medical School, writes that the section:
". . .did not recognize an increasingly relevant but underappreciated and underutilized role for academic research in drug discovery." Lowe disagrees, but neither he nor Ivinson presents any evidence.
Another post begins
"A reader at a large research university sends this along for comment:
"My advisor is a staunch skeptic of the value of "big pharma". He recently made a comment in a group meeting that "Merck has not discovered anything in 25 years. They don't do research, they acquire it. In fact, I don't know why they even have chemists and biologists, maybe they feel they have to..."
Well. I realize that there's a lot of good-natured sniping between industry and academia, but that kind of crosses the line, doesn't it?"
Indeed it does. The un-named advisor is making a very extreme claim. He is prof. Strawman in person. I never made (or hinted at) any such belief. The prof. is a jerk but irrelevant to my debate with Holsclaw.
A post on mutual suspicions between academics and industry scientists. No evidence is presented, but I am going to copy and comment
I'm not saying these are all true, or true all the time. But here are three things that industrial pharma researchers tend to believe about academic ones:
1. They talk too darn much. Don't even think about sharing any proprietary material with them, because it'll show up in a PowerPoint show at their next Gordon conference. How'd that get in there?
2. They wouldn't know a real deadline if it crawled up their trouser legs. Just a few weeks, just a few months, just a couple of years more and they'll have it all figured out. Trust 'em.
3. They have no idea of how hard it is to develop a new compound. First compound they make that's under a micromolar IC50, and they think they've just discovered Wonder Drug.
The third point is very damaging to Holsclaw. It suggests that, to the extent it exists, the division: proof of principle in academia and drug development in industry is costly. Above Lowe argues for more academic drug development and notes an academic article which claims the results are useful for drug development when they aren't. So far, his blog suggests that merging pharmaceutical companies and public research institutions would have benefits. Also note first point about secrecy. This is, to society, a disadvantage of commercial research.
And (fair's fair), here are three things that academic researchers tend to believe about industrial ones:
1. They have so much money that they don't know what to do with it. They waste it in every direction, because they've never had to fight for funding. If they had to write grant applications, they'd faint.
2. They wouldn't know basic research if it bonked them on the head. They think everything has to have a payoff in (at most) six months, so they only discover things that are in front of their noses.
3. They're obsessed with secrecy, which is a convenient way to avoid ever having to write up anything for publication. They seem to think patent applications count for something, when any fool can send one in. Try telling Nature that you're sending in a "provisional publication", details to come later, and see how far that gets you.
I'm not sure if Lowe agrees with the academics (if he disagrees he might have said so). The complaints would be pretty devastating to Holsclaw's argument if they were true. I mean wasting money while only discovering things in front of ones nose is not ideal.
Now I don't think that Lowe thinks that the NIH should take over big pharma. Clearly there are excellent arguments against such a move. However, so far, the blog has presented only arguments in favor.
This is astonishing as I was sent here by someone arguing against me for merely noting that some medical advances are developed in the academy (and damn that was a device not a drug so why the hell am I reading about chemistry ?)
A post on team work in pharmaceutical companies. He contrasts it with being a chemistry doctoral student. Again noting some academics are not doing drug development which is no surprise.
A post on respecting secrecy. For society this is a disadvantage of commercial research. Academics compete too and race each other. Such secrecy is not needed for people to be motivated.
A post on how to do a job presentation.
A post on undergraduate teaching.
A post on Larry Summers and graduate teaching.
Here Lowe is very very naive about the particular institution he is discussing, because he uses the phrase "tenure track job". Summers was president of Harvard. There is no such thing there. If one is hired as an assistant professor, the probability of getting tenure is roughly 10%. It is not time to slow down and have a baby. In economics (where there a no post doctoral fellowships) Harvard grants tenure to people who are at the very very top of their sub fields (top 1 in principle maybe top 2, 5th best in the world isn't good enough) at age 32 and up (allll the way up). There are very few mothers in that group. I think no economist who is also a mother has ever been tenured at Harvard.
I mean it's way waaaaay worse than Lowe suggests at Harvard (which is an extraordinarily evil place even by the standards of US academia).
A post on understanding science including "Chad Orzel, being a physicist, instantly translates "doesn't understand science" to "doesn't understand math","
I really really hate the way that physicists treat "science" and "physics" as synonyms.
Another post which includes
"That's when it hit me: the article that Carroll's referring to isn't warning people away from becoming scientists. It's warning them away from becoming physics professors. Very different!"
I really really hate the way that physicists treat "science" and "physics" as synonyms.
A post on what he doesn't miss in chemistry grad school.
Still no sign that he knows anything about the academy outside of a chemistry department.
A post begins "The October 29th issue of Science has an interesting article from a team at Stanford on a possible approach for Alzheimer's therapy. "
Lowe concludes that it probably will not work because the reagent in question will not cross the blood brain barrier. Again an example of academics who may not have discovered a drug. Doesn't show that there aren't academics who have discovered drugs.
The compound hasn't been tested in animals. If it doesn't work, the idea, which is original, might be useful in developing a compound that does.
OK some data I will post above.