Canadian Business Column: Biotech is Broken

A few paras from my upcoming Canadian Business magazine column:

The biotech business is broken. It really doesn’t matter where in the market you look because the symptoms are everywhere: This is one sick industry.

Among other things, the drug industry is mired in me-too-ism. While the industry is spending billions on new products, they are mostly variants on what has gone before, not altogether new drugs. Similarly, drug companies are flogging existing products mercilessly before their patent protection runs out. Feeling some pain from a sprain? Take a COX-2 inhibitor like Vioxx, not kiddy stuff like aspirin or ibuprofen.

The oft-times senescent U.S. Food & Drug Administration (FDA) has noticed, pointing out that the industry’s pace of new drug production has fallen to nada. Admittedly, the FDA doesn’t quite put it that way — this is a business that loves acronyms, jargon, and opaque Latinate even more than does the computer industry — but the gist is that the number of new drugs offered for approval (new molecular entities (NMEs) in FDA speak) is down by half since 1995.

But why? It is no secret that …