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Andy Grove, the famous CEO of Intel, has spoken out publicly against the pharmaceutical industry. I’d like to comment on a few of his statements.

First a few words on my perspective. Before moving to biotech I actually had a stint in process development at Intel, so I’m pretty familiar with the industry and the technology. Now I’m in R&D in the biotech industry which, while not really the same as pharma in general, still gives me a good perspective on the challenges of drug development.

Mr. Grove is a very smart guy who’s been very successful in his industry. He’s not just a management-focused CEO, but an actual technical expert who’s made it to the top. My point here is just that he’s got a credible reputation for technical matters.

I picked the semiconductor industry because it’s the one I know; I spent 40 years in it, during which it became the foundation for all of electronics. It has done a bunch of unbelievable things, powering computers of increasing power and speed. But in the treatment of Parkinson’s, we have gone from levodopa to levodopa. ALS [Lou Gehrig's disease] has no good treatment; Alzheimer’s has none.

This is, unfortunately, a nonsensical comparison. Grove’s main point is that the semiconductor industry has made huge strides in 40 years but the pharma industry has not.

The reason this is an invalid point is that the semiconductor industry made huge strides in it’s first 40 years, and this is where all of the “obvious” or low-hanging fruit lay for any new field. Modern medicine is far from a new field, and the low-hanging fruit have been plucked long ago. Unlike semiconductors, medicine is literally a life and death industry, and tremendous work and tremendous progress has been made. Unfortunately for Andy and others with serious illness, all of the problems that are remaining are hard ones, and they are hard problems which are extremely expensive to attempt to solve, with each attempt having a low chance of success.

Intel’s successes at die shrinks and increasing transistor density have been driven by advances in material sciences that have had clearly defined problem statements, working within the relatively simple bounds of physics. These are complicated problems, but they are well defined problems. The complexity of the simplest living thing is incredibly greater than any processor, and the problem of “curing a disease” is simple to state, but impossible to write a design document for.

The fundamental tenet that drives us all in the semiconductor industry is a deeply felt conviction that what matters is time to market, or time to money. But you never hear an executive from a pharmaceutical company say, “Before the end of the year I’m going to have xyz drug,” the way Steve Jobs said the iPhone would be out on schedule. The heart of every high-tech executive has been, get the product into customers’ hands and ramp up production. That drive is just not present in pharma; the drive to get sufficient understanding and go for it is missing.

This statement is depressing, because Andy Grove has been diagnosed with a very serious illness, and he doesn’t see progress being made quickly enough. The reality is that it is impossible to do what he asks in a way that doesn’t endanger lives.

Consider the iPhone which Andy uses as an example. I own one and it’s a great gadget. It does have software bugs which expose it to hacks (currently enterprising users can exploit such a bug to install 3rd party software). I’ve had the built in web browser crash while visiting many web sites. On an iPhone these bugs aren’t a big deal. They can be fixed in a downloadable patch, or even if not fixed they are just a minor inconvenience. In a drug, those bugs represent sick people who your drug has killed.

The standard for drugs is immeasurably higher than for semiconductors. All of our manufacturing sites are regularly inspected by the FDA, and by the regulatory agencies of Japan, Europe, Australia, and every other country that uses our drugs. They inspect every aspect of how we do what we do. It’s because the cost of failure is that you kill a person who wasn’t going to die. Andy’s accusation that we don’t have the drive to get the drugs out there would be insulting if it wasn’t so sad and desperate.

We care very much, and we want to get these products to market as quickly as possible. But in order to be sure that a drug is safe there are literally many years of tests that must be done, and they must be done in a way that satisfies the strict government requirements for efficacy and safety. We must also exhaustively prove that we can make exactly the same molecule every batch, and every batch is the same, and find every important variable in the process and demonstrate what happens if you push it too far. The bar is immeasurably higher than in semiconductors. I worked in that industry and there’s no comparison to what I see now.

When you buy a gadget sometimes you get a dud. Your xbox overheats and dies. Your monitor has dead pixels. Your hard drive fails after only 6 months. So, you go pick up a replacement, it’s under warranty. No big deal. If you are a gadget person you may pay attention to stuff like what the serial number is, what manufacturing site made your display, what chipset is in it, all to try to get a more reliable unit. Have you ever considered something like this for a drug? Have you ever looked at what site made a bottle of something as bland as tylenol? The requirement for quality is so much greater than for the technology industry that it’s sort of insane to compare. Even the most expensive gadget is less consistent and less reliable than any random bottle of generic ibuprofin from K-Mart. And it’s because a single badly-made lot of ibuprofin can kill someone.

in pharma, if a clinical trial doesn’t work–which means the average of all the patient responses is not better than the average of a placebo treatment–they just throw [the drug] away

Of course this isn’t true. By the time a drug reaches clinical trials we are many tens of millions of dollars invested in it. If a drug can be repurposed, we do so. If we think we can be successful with a new treatment strategy then we try it. There’s too much money at stake to just throw a drug away, and there are a great many drugs out there, including my company’s best sellers, that failed their first clinical trials but we didn’t give up on them.

The drug industry has problems, don’t get me wrong. But Andy’s accusation that we don’t care about speed, that we give up when a trial goes wrong, that we are not as good at innovation is just outrageously incorrect. Andy’s own company has seen progress stall dramatically in the last few years as the correlation between clock speed and critical dimension has broken down. Computer performance has stopped increasing in a meaningful way to consumers. After 40 years of rapid progress Intel is seeing that discovering new inventions that matter to the customer is becoming a greater and greater challenge. Maybe in another 20 years they will have it as hard as pharma does today.

I wish him all the luck in dealing with his illness, and I hope that he is able to use his influence and wealth to drive progress in this disease. There are many orphan diseases out there which the economics of drug discovery have left with unmet needs. I believe that the problems that the drug industry have are primarily economic, not due to a lack of drive or innovation as Andy seems to believe.