Michael A. Martorelli, Contributing Editor03.06.13
I first discussed former Secretary of Defense Donald Rumsfeld’s famous discourse on “knowns and unknowns” in my March 2012 Contract Pharma column. I returned to the topic in my January 2013 Pharmaceutical Outsourcing Monitor (copies free upon request), and it comes up again this month because it seems to me that the global drug development enterprise is confronting more than the usual amount of the problematic “unknown unknowns.”
As a reminder . . .
Known Knowns and Known Unknowns
We know the global economy is still on shaky ground, but we know we don’t know how much growth to expect in the worldwide sale of pharmaceuticals. One reason for this caution is widespread concern over the prices of drugs in certain countries, and the ability of the payers (including governments) to keep supporting the use of these products.
We know ObamaCare (a.k.a. the Affordable Care Act) will not be repealed, but we know we don’t know when various state governors will begin to establish exchanges and expand their Medicaid programs in accordance with its provisions.
We know the National Institutes of Health (NIH) budget is coming under severe financial pressure, and we know we don’t know exactly how the nation’s fiscal crisis will affect federal support for biomedical research.
We know pharma and biopharma companies are restraining some of their spending on R&D, but we know we don’t know how much — if any — slack in that rate of spending can be offset by increases in spending (especially on clinical research) by various philanthropic foundations, independent research institutes, voluntary health associations, and patient advocacy groups.
We know drug development firms are increasing their use of outsourcing, and while various market research firms are predicting specific growth rates for this industry, we know we don’t know exactly how fast each separate segment of outsourcing will grow in 2013.
Unknown Unknowns
Dealing with uncertainties in the category of “unknown unknowns” could be more challenging. For instance, drug development professionals probably should be considering their potential answers to questions such as these.
Michael A. Martorelli is a Director at the investment banking firm Fairmount Partners. For additional commentary on the topics covered in this column contact him at Michael.martorelli@fairmountpartners.com or at Tel: (610) 260-6232; Fax (610) 260-6285.
As a reminder . . .
- Known knowns are things we know we know.
- Known unknowns are things we don’t know, but we know that we don’t know them.
- Unknown unknowns are things we don’t know, but we don’t know that we don’t know them. The things in this category tend to be the most difficult ones.
Known Knowns and Known Unknowns
We know the global economy is still on shaky ground, but we know we don’t know how much growth to expect in the worldwide sale of pharmaceuticals. One reason for this caution is widespread concern over the prices of drugs in certain countries, and the ability of the payers (including governments) to keep supporting the use of these products.
We know ObamaCare (a.k.a. the Affordable Care Act) will not be repealed, but we know we don’t know when various state governors will begin to establish exchanges and expand their Medicaid programs in accordance with its provisions.
We know the National Institutes of Health (NIH) budget is coming under severe financial pressure, and we know we don’t know exactly how the nation’s fiscal crisis will affect federal support for biomedical research.
We know pharma and biopharma companies are restraining some of their spending on R&D, but we know we don’t know how much — if any — slack in that rate of spending can be offset by increases in spending (especially on clinical research) by various philanthropic foundations, independent research institutes, voluntary health associations, and patient advocacy groups.
We know drug development firms are increasing their use of outsourcing, and while various market research firms are predicting specific growth rates for this industry, we know we don’t know exactly how fast each separate segment of outsourcing will grow in 2013.
Unknown Unknowns
Dealing with uncertainties in the category of “unknown unknowns” could be more challenging. For instance, drug development professionals probably should be considering their potential answers to questions such as these.
- Will regulatory agencies around the world demand more comparative effectiveness trials and less “versus placebo” studies? And will such demands slow the introduction of important products that have already been extensively studied?
- Will our country’s fiscal problems cause the government to give Medicare the right to negotiate drug prices?
- Will the growing demands for transparency of all clinical trial data cause a backlash and delay the continued development of drug candidates that show safety or efficacy problems in their early trials?
- And finally, at least for now, what troubles with clinical research will be uncovered in 2013 by journalists, researchers, lobbyists, or whistleblowers who always seem to be on the lookout for scandals involving the drug industry?
Michael A. Martorelli is a Director at the investment banking firm Fairmount Partners. For additional commentary on the topics covered in this column contact him at Michael.martorelli@fairmountpartners.com or at Tel: (610) 260-6232; Fax (610) 260-6285.