However, these same sort of gambles also apply far upstream, when a new molecule, new technique or even basic science is being pursued by university scientists.
In his blog (In the Pipeline), Derek Lowe today highlights an example of this from the 1980s — one that brought a Nobel Prize in physiology.
He quotes from the new book Adapt by Tim Harford, as summarized in a recent Slate article.
In 1980, Mario Capecchi applied for a grant from the U.S. National Institutes of Health. . .Capecchi described three separate projects. Two of them were solid stuff with a clear track record and a step-by-step account of the project deliverables. Success was almost assured.The problem is, he did exactly what NIH didn’t want him to do, and its process was designed to screen out. Again quoting Harford:
The third project was wildly speculative. Capecchi was trying to show that it was possible to make a specific, targeted change to a gene in a mouse's DNA. It is hard to overstate how ambitious this was, especially back in 1980. . .The NIH decided that Capecchi's plans sounded like science fiction. They downgraded his application and strongly advised him to drop the speculative third project. However, they did agree to fund his application on the basis of the other two solid, results-oriented projects. . .
What did Capecchi do? He took the NIH's money, and, ignoring their admonitions, he poured almost all of it into his risky gene-targeting project. It was, he recalls, a big gamble. If he hadn't been able to show strong enough initial results in the three-to-five-year time scale demanded by the NIH, they would have cut off his funding. Without their seal of approval, he might have found it hard to get funding from elsewhere. His career would have been severely set back, his research assistants looking for other work. His laboratory might not have survived.
The NIH's expert-led, results-based, rational evaluation of projects is a sensible way to produce a steady stream of high-quality, can't-go-wrong scientific research. But it is exactly the wrong way to fund lottery-ticket projects that offer a small probability of a revolutionary breakthrough. It is a funding system designed to avoid risks—one that puts more emphasis on forestalling failure than achieving success.Both Lowe and Harford praise the Howard Hughes Medical Institute — in other words a foundation that can take big risks with its own money.
Once upon a time, big rich R&D intensive companies existed to take these sort of risks. In one 20 year period, AT&T invented the mobile phone, the transistor, error correction codes, solar cells, transatlantic telephone cables, the laser and the communications satellite. While the reconstituted AT&T is now a duopoly, the old Bell Labs is long gone.
A long time ago, big pharma made the great breakthroughs. More recently, they let university professors create biotech startups and then bought them. But now such startups look like a bad bet for VCs, and a new financing model is badly needed.
We don’t know who will fund the next round of great breakthroughs. By their nature, we don’t know what they are or where they will come from. Perhaps if we’re lucky, the new tools for computational biology and chemistry will reduce the time and costs of making such discoveries — reducing the amount of money that scientists have to beg for and improve the odds of getting it.