Investing For A Backlash Against Psychopharmacology

By Christopher Faille, Forbes.com
Jul. 19 2011

Among the public, scholars and within the medical profession, a backlash has developed against the widespread use of psychoactive drugs. This backlash will help define the biotech and pharmaceutical industries in the coming years, because it means over time a shift in opportunities and capital away from a search for the next psychiatric blockbuster toward solutions to more tractable human troubles that arise outside of the central nervous system.

Prozac PromiseEli Lilly’s (NYSE: LLY) Prozac is perhaps still the most cited instance of a real or alleged psychopharmacological breakthrough. It is an anti-depressant, the result of laboratory research conducted in the 1970s, approved for sale in the U.S. by the FDA in 1986. By 1990, it was not only the most widely prescribed anti-depressant in the U.S., it merited a Newsweek cover story.

The corporate history of another much touted drug, Adderall, is more complicated. Adderall, a stimulant used to treat both ADHD and narcolepsy, and for various off-label purposes, was once exclusively associated with Shire Pharmaceutical (NASDAQ: SHPGY). Shire no longer produces the instant release (IR) form of the drug. It sold those rights years ago to Dura Pharmaceuticals, which was in turn acquired by Teva Pharmaceuticals Industries Ltd. (NASDAQ: TEVA).

Last year, Basic Books published The Emperor’s New Drugs, by Irving Kirsch. Kirsch is himself no outsider to the world he is critiquing here. He has spent decades in the discipline of psychology since receiving a Ph.D. therein, in 1973, and has been at work on the subject of this book since 1998, when he and Guy Sapirstein co-wrote a meta-analysis of the effects of antidepressant medicines that they rather jauntily called “Listening to Prozac but Hearing Placebo.”

In The Emperor’s New Drugs, Kirsch says that he and Sapirstein were “cautious in our interpretation of the data” back in 1998. They were, despite that title, too kind to the hypothesis that the drugs under examination actually did have therapeutic value that a placebo could not duplicate. Since then, though, “the process of addressing the objections of my critics has steadily driven me to a set of much more far-reaching conclusions.”

“In the long run,” he now believes, “psychotherapy is both cheaper and more effective” than chemical therapies, “even for very serious levels of depression.”

Also last year, Crown Publishing came out with a book on much the same subject by journalist Robert Whitaker. Whitaker’s tone in Anatomy of an Epidemic (2010) is angrier than Kirsch’s. While Kirsch focuses on the good that psychoactive drugs seem to do, and finds that only the patient’s confidence in the healing power of the pills actually does that good, Whitaker focuses on the harm that he contends such pills do.

He believes that the rush to prescribe pills is behind the fact that the “number of disabled mentally ill has risen dramatically since 1955, and during the last two decades, a period when the prescribing of psychiatric medicines has exploded, the number of adults and children disabled by mental illness has risen at a mind-boggling rate.”

In June, Marcia Angel reviewed both Kirsch and Whitaker in The New York Review of Books – so sympathetically that she must be considered a member of the same choir – and she is no stranger or philistine, but the former editor in chief of the New England Journal of Medicine.

Meanwhile, the drug companies themselves have been dropping or reducing research into fields that once looked promising. Daniel Cressy, writing about this in Nature last month, was mournful in tone: “Many people affected by mental illness are facing a bleak future as drug companies abandon research into the area and other providers fail to take up the slack,” he says.

My own suspicion is that his tone is misdirected. For those for whom the future is bleak, it is bleak because the critics are right, and the drugs really don’t do anything valuable, which is to say the bleakness arises because the research program has continued in a misguided direction for far too long.

But even if the pull-back Cressy notes is just a response to the change in cultural climate, it would mean development of improved treatments of diabetes or multiple sclerosis has just become an easier ‘sell’ on every level than further research on depression or schizophrenia, as the human mind stubbornly remains a Black Box.

If you want an investment play on diabetes you might look at Amylin (NASDAQ: AMLN). If you want a play on MS, consider Mylan (NYSE: MYL). Either way: psychopharma is looking like an idea whose time has passed.

‘Like’ this Posting on Facebook