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Rethinking research funding

THE BIOTECHNOLOGY Industry Organization is holding its annual mega meeting in Boston this week at a pivotal time in the industry's history. Medically, biotech is at the growing edge of therapeutics. Most older, conventional drug companies have become massive marketing engines with a dulled innovative edge -- only 18 new drugs were approved by the FDA in all of 2006. By contrast, many biotech companies retain their roots as research-based operations where the scientists' agenda can still compete with that of the sales department. Some of the most exciting new treatments for cancer, autoimmune diseases, and even vision loss are emerging from this creative new sector.

But amid the breakthrough findings, lavish entertainment, and self-congratulation that will fill the convention attendees' schedules this week, some important worries may not get the attention they merit. The first relates to costs. Not the cost of the luxury harbor tours and exorbitant meals that participants will enjoy in the coming days; I'm referring to what patients (or taxpayers) have to pay to get access to these wondrous discoveries.

Regimens that can cost tens of thousands of dollars a year per patient can cloud the moral judgment of those who purvey them. For example, a confluence of interests among biotech giant Amgen, for-profit dialysis centers, and kidney disease consultants seems to have led to substantial over prescribing of the company's flagship blood-building product, erythropoietin -- a lucrative practice that probably increases the risk of side effects and even death. Another dilemma: A new biotech product, Lucentis, can reverse the vision loss caused by macular degeneration, a devastating cause of blindness. But the drug costs $2,000 for each monthly injection. Many ophthalmologists are convinced that equally miraculous results could be provided to far more patients with use of a very similar biotech product, Avastin, at only $50 per dose. Yet Genentech, which makes Avastin, has not agreed to sponsor a clinical trial to study this possibility, which could also save Medicare hundreds of millions of dollars in the coming years. That's probably because Genentech makes both Lucentis and Avastin, and use of the more affordable drug would cut into the more expensive drug's expected profits.

Biotech has brought to market a number of important new cancer treatments. But pricing a lifesaving cancer regimen at over $50,000 is guaranteed to put that treatment beyond the reach of many patients. It doesn't cost anywhere near that much to produce these drugs. Rather, the industry argues that these sky-high prices are justified to fuel the expensive research it performs. But many biotech advances are heavily based on publicly funded research supported by the National Institutes of Health and by foundations. Current policies allow companies to charge whatever they want for a new drug, with no payback required for most of the indispensable, taxpayer-supported basic research that made it possible. With the federal deficit threatening to flatline the NIH budget for the first time in a generation, and venture capital speculators increasingly preferring to fund safer "late-stage" companies with nearly marketable products, savvy conventioneers this week must be worried about where the next decade's miracle cures will come from -- as we all should be.

The breathtaking five-figure prices that some biotech drugs command per course of therapy warrant a rethinking of this "trickle-down" approach to supporting science -- a strategy that amounts to the growing privatization of medical research. The example of biotech's older, flabbier siblings is not encouraging: Only about 14 cents of every dollar paid for Big Pharma's products makes its way back into research and development, according to the companies' own figures.

A safer course for the nation would be to take some of the billions the nation is paying for these expensive products and use it to rev up NIH funding, protecting the flow of scientific innovation on which new biotech products depend. The companies could then come in and do the hard work needed to bring those discoveries to market. They should be rewarded fairly, even handsomely for that important work -- but not at levels that will pauper the rest of us or the federal treasury. And we need a better way to provide reasonable compensation for the taxpayer-supported research on which breakthrough products are based. Public funding of university-based research, not extortionate drug prices, is the safest way to guarantee "the miracle cures of tomorrow." It might make for fewer luxury harbor cruises at future BIO conventions, but we can live with that.

Dr. Jerry Avorn, a professor of medicine at Harvard Medical School and Brigham and Women's Hospital, is author of "Powerful Medicines: the Benefits, Risks, and Costs of Prescription Drugs."