The Antidote: Inside the World of New Pharma (2 page)

Merck, where Boger started his career in 1979 after getting a PhD in chemistry at Harvard and doing a postdoctoral stint with future Nobel laureate Jean-Marie Lehn, was their paragon. It best represented the qualities that the industry exalted, a patient-centered, high-science focus combined with unrivaled organizational commitment to R&D. It
wasn’t always the most profitable drug company—Pfizer and others were better at making money—but its research campuses in New Jersey and outside Philadelphia attracted the most promising scientists. It was where you wanted to be, the top of the pyramid.

In the 1970s and 1980s, with the swift expansion of government-sponsored research spurred on by the “war on cancer,” and as the universities and Wall Street simultaneously discovered a bonanza in the life sciences, there was an explosion in medical understanding, and the low-hanging fruit were quickly plucked. Merck’s labs launched the first or second significant drugs for cholesterol, hypertension, osteoporosis, and asthma, as well as a class of pain medications known as COX-2 inhibitors. At Merck as elsewhere, scientists burned to do pathbreaking work on new medical frontiers, but increasingly, in management suites and boardrooms across the industry, the consequences of success yielded a conservative strategic consensus: move cautiously rather than struggle to produce breakthroughs; settle for modest “quick-to-market” improvements where treatments already exist, and where the resulting products can be aggressively marketed to doctors and people with chronic diseases.

Gradualism held zero appeal for Boger. “Now, I don’t think there’s anything wrong with bringing an incremental advance to the marketplace; you’re not a bad person,” he says. “It’s just I don’t want to do that; life’s too short.” Biotechnology companies by now had joined the competition. A few top university professors or government scientists with a tantalizing idea could raise tens of millions of dollars, go out and test it, then go public—
public
—when all they had to sell to investors was a theory and the only certainty in their business model was years and years of progressively more unprofitable darkness. Wall Street blew hot and cold, periodically falling hard for their stories of genetic breakthroughs and miracle cures before returning to its senses. Merck, recognizing Boger’s talents (if not buying into his ideas about building better drugs by applying advances from the biotech, software, and computer graphics industries), encouraged him to do his experiment, letting him piece together a team in immunology. But he quickly felt thwarted, impatient. Pent-up.

His frustrations crystallized in the late 1980s, as many things did across the medical world, with the AIDS crisis. Drugmakers at first ignored the epidemic, seeing a small market. Off-the-shelf compounds were ineffective and toxic. When Merck entered the arena, many doctors, public health officials, and even some activists felt that the cavalry had arrived. Boger’s closest scientific friend in the company, a brilliant and brash young biologist named Irving Sigal, led Merck’s project, and Boger cleared the decks in his group to help. CEO Roy Vagelos announced he was “damn optimistic” about Merck’s chances. In late 1988, returning from a meeting in Europe, Sigel was killed when Pan Am Flight 103, carrying 259 people and a terrorist organization’s bomb in a cargo container, exploded in a fireball over Lockerbie, Scotland. He was thirty-five. Merck scrambled to recover from its loss.

Within a month, Boger was gone.

So I was there when Vertex set out in its garage to overtake the “bigs.” And what I saw were staggering contrasts. The major pharmaceutical companies were lumbering along; mightily equipped, cash-rich, charging higher and higher prices while bringing out fewer and fewer important new drugs, their reputation for putting profit before patients replayed and reinforced in the AIDS epidemic. It was fifteen years into the war on cancer, and cancer was winning in a rout. The biotechs had yet to pay out, and Wall Street was skittish about their high failure rate and the chronic risk and volatility of an industry where horizons were measured in decades. It was into this environment that Boger led his young company.

Now leap ahead to early 2011: the grinding recovery from the worst financial crisis in eighty years, the raging political storm over Obamacare, a drumbeat of lurid press reports about the drug business, revealing an industry in crisis and under siege. Vertex, after twenty-two years and $3.6 billion in losses, was about to launch its first drug under its own name, a major breakthrough against the leading cause of advanced liver disease. It had a second drug nearing regulatory approval that promised to revolutionize the treatment of the most common inherited fatal disease in the United States and Europe. Just as the world around it was
shuddering, Vertex was poised to soar. What better vantage point for witnessing the mounting collision of medicine, money, and society?

I went back inside Vertex to learn what it takes—to succeed in science and business, yes, but also in fleshing out and struggling to achieve a radical vision of a better future. Could a group of very bright, very determined people make a difference in a market dominated by profits and Wall Street? Could true believers in the idea that the purpose of pharmaceutical research is to put patients first and transform the lives of sick people compete in an industry where it was far preferable to develop, say, a marginally better
fifth
statin compound for high cholesterol and market the hell out of it, as Pfizer had done with the bestselling drug of all time, Lipitor? Or bury a $500 million sweetheart reimbursement in the Fiscal Cliff deal, as Amgen did with its army of seventy-seven lobbyists? Or pay a generic company $42 million not to market a cheaper version of your drug, so you can keep selling it at ten times the cost to consumers, as in a recent restraint-of-trade case before the Supreme Court? Could Vertex still be Vertex in our genomic age, when understanding which drugs to prescribe will depend on an ever-deepening biological profiling of individual patients?

What was I seeking? Hope, really. The $325 billion prescription drug business is America’s most challenging and one of its most profitable. It’s tougher and riskier at nearly every stage than any other business. Yawning biological uncertainties haunt every experiment; the failure rate even after a candidate clears all the myriad hurdles to reach human testing is 30 to 1; the cost of ramping up a successful product typically exceeds $1 billion. Drugmakers operate in the world’s most regulated commercial environment, matched only by nuclear power. Small companies face an extra test. Dependent on Wall Street for financing, they must navigate a myopic trading culture that disdains and crowds out long-term thinking and investment. All progress in the pharmaceutical business is backbreaking, freighted with unknowns, takes twice as long as you think it will, and is liable to “blow at any seam,” as Tom Wolfe wrote about the endless ineffable peril of staking it all on a lofty high-risk mission.

Mostly I wanted to see what it had taken to prevail against such harrowing obstacles: What had Boger’s vision become, and did it represent
a true way ahead in our boundlessly promising and still barely comprehended new biological epoch? After he’d resigned from Merck—alone, without first taking anyone with him, and without any assurance that anyone would follow—Boger went home and sketched his goals on a whiteboard:
“Make better drugs, faster. Create the 21st century biopharmaceutical company. Become Merck, only better.”
It was almost a haiku. He thought it would take him twenty years and $1 billion. Now, just two years late, at nearly four times the cost, Vertex verged on proving all that he had set out to do.

“One of the most common questions I’ve gotten lately is, ‘Gee, did you ever imagine this would occur?’ ” he told Vertex’s sales troops that spring. It was a few days after Osama bin Laden was killed in Pakistan after a decade-long manhunt, and the company was counting down to launch, primed to go one-on-one against Merck for the richest commercial opportunity in pharma. “My completely unsatisfying answer is, ‘Yes, absolutely.’ Now, that comes across to some people as fairly arrogant, and to that I say arrogance is only a problem if it doesn’t turn out to be true. If it turns out to be true, it’s just persistence.”

I’d discovered at Vertex that biomedical research emits a high emotional heat. It may be tempting to think that the competitive commitment in other disruptive tech industries is similar but the comparison is slender. In Silicon Valley, you’re trying to make a better product, not cure cystic fibrosis or Parkinson’s disease. Here the difference between success and failure can be the difference between life and death. Vertex was about to debut not only the first drugs discovered and developed by its own people and commercialized under its own label. It was about to debut itself, an organization of nearly two thousand people sculpted as much by the changing health care economy and the gyrations of its industry over the past two decades as by Boger and the others who joined him. They had had notable early success in the crucible of that new biomedical order—AIDS—but that victory had been pyrrhic because, while it had produced a drug, Vertex hadn’t fully emerged along with it. Now the company would correct that disparity.

Boger was right about arrogance. We may not like it in our faces, but it’s a problem only when it doesn’t turn out to be true.

Feeding the Beast

APRIL 28, 1993

Boston’s World Trade Center, unlike New York’s, was not a beacon of wealth and power but a refitted waterfront mercantile mart. It squatted on a pier above the city’s famously ruined harbor, offering a postcard view of downtown. Boger, age forty-two, stepped onto the podium before 250 worried executives at the annual meeting of the Massachusetts Biotechnology Council, a statewide trade group. In four years, his “highly unlikely start-up” had grown to 110 people sprawling among a warren of reconverted lab buildings near MIT—a public company with $50 million in the bank—and its reputation as a leader in structure-based drug design was supported chiefly by a string of impressive publications. The company had competitive research projects in multiple disease areas. Even those who’d thought its long-term goals delusional had to concede its short-term progress.

Across the drug industry, the mood was black. In February, a month after Bill Clinton took office, he announced that his wife, Hillary, would oversee national health care reform, and at an appearance together at a Virginia medical clinic the president denounced “shockingly” high drug prices. He cited figures showing the industry spent more on marketing than on research, demanded that drugmakers change their ways, and suggested that he would propose price controls if they didn’t. As one analyst put it, Clinton had decided to “go to war” with the pharmaceutical companies—rich targets in the struggle against spiraling health costs. A few days later a congressional study criticized drugmakers’
“excess profits.” In the two months since, all drug stocks, big and small, had lost one-third of their value.

“I expect to see frogs raining down from the sky sometime soon,” Boger said. He was six foot five, rangy, all angles, with a broad forehead capped by thinning stick-straight brown hair. Tinted aviator glasses did nothing to dim an enveloping gaze and generally ecstatic grin. His cadences echoed a small-town North Carolina boyhood where from a young age he found himself explaining things to his unaccountably obtuse elders. Invited to discuss the industry perspective, Boger (pronounced with a hard
g
) forecast a reckoning. Only the smartest, fleetest, most adaptable companies—companies such as Vertex that were burning tens, hundreds of millions of dollars chasing a broad portfolio of breakthrough drugs for serious diseases—would compete successfully in the new period, he said. Why? “Because we’re more motivated, and the fear of death and God is closer to us.” Chortling, Boger concluded with a bit of light heresy, a slide of a
New Yorker
cartoon showing an executive telling a lab-coated scientist sketching at a whiteboard, “I like it. Find a disease for it.”

Strictly speaking, Vertex wasn’t a biotechnology company: it wasn’t trying to engineer new products by manipulating genes, so-called biologics. It aspired to make small-molecule drugs—“little pills in bottles with cotton on top,” as Boger put it—the time-honored staple of traditional pharmaceutical discovery and development. But with the prospect of launching its own products still many years off, and by no means certain, and with it burning prodigiously through capital, Vertex was a biotech by default. Boger often joked that he didn’t know it was a biotech company until Kidder Peabody, the investment bank that took it public, told him it was.

Despite the dire mood, he had earned his cheerful attitude, mostly through backbreaking pursuit, although luck and charisma helped. He had proved he could sell Vertex’s story no matter how distressed the market was. Two weeks earlier, Vertex had announced a $20 million deal with Kissei Pharmaceutical Co., the fastest-growing Japanese drug company, to develop AIDS medicines in the Far East. Entrepreneurs forever hustle for capital, but Kissei, an improbable suitor, had initiated the contact months earlier, coming to Boger as if off a cloud. He and Richard Aldrich, Vertex’s chief business officer, had been shopping other projects on one
of their twice-yearly “death marches” through dozens of executive suites in east Asia in late January. The Japanese had yet even to acknowledge that AIDS existed in their country, so severe was the stigma. Yet Vertex’s business liaison urged them to visit Kissei in Matsumoto City, on a misty high-mountain plateau six hours from Tokyo. “Long ride. Switching trains,” Aldrich recalls. “We didn’t know them. We were resistant. But he said, ‘No, they really want to meet you, this could be worthwhile.’ I remember we were in the car driving between labs. One of the Kissei guys turned around—Josh and I were in the backseat—and he says to Josh, ‘Dr. Boger, at Kissei you are a god.’ And, of course, Josh immediately liked Kissei. Within forty-five minutes of arriving there, we went into a side room with the senior guys and started talking money on the deal.”