Why Fund Drug Development?

The primary reason The Princess Margaret invests in new drug development is to fulfill its mission to Conquer Cancer In Our Lifetime. The reputation and ground-breaking work of the institution ensure that our patients have access to the most promising new drugs.
But the possibility of generating revenue that can then be used to fund additional drug development is also a motivator.  The very successful breast cancer drug Herceptin generated revenue of over $1 billion in 2007 for the pharmaceutical firm Genentech.  The drug was originally discovered by Dr. Dennis Slamon at Memorial-Sloan Kettering, and that institution benefits from the financial success of the drug by receiving licensing fees which enables them to embark on other important cancer projects.
 The most recent estimates by the Tufts Center for the Study of Drug Development estimate the average cost of getting a new drug to market to be in the area of $802 million (in 2000 dollars).  Considering these high development costs, it is not surprising that there were only 17 new molecular entities (i.e., unique new drugs) approved by the FDA in 2007.  These high costs have led to a trend in the pharmaceutical industry of only focusing on ‘blockbuster’ drugs which are those where sales in excess of $1 billion are anticipated.
Drugs needed to treat smaller patient populations—those suffering from rarer diseases and conditions—are given much less attention.  Academia and not-for-profit healthcare institutions have to fill this gap.