As a fresh-faced medical intern, a colleague of mine greeted a new patient with a breezy, "So what's your problem?" "Oh, just a touch of leukemia," the pallid fellow answered.

But that was in the mid-1950s when there was no such thing as "a touch" of leukemia or any other cancer. We knew almost nothing about the disease - its cause, or how to prevent, treat or cure it - except it was a death sentence and a gruesome end.

A half-century of new drugs has changed all that. Blood-related malignancies such as leukemia and lymphoma now are among the most curable forms of cancer; no longer is the diagnosis a death sentence.

There have been similar treatment breakthroughs in other areas of medicine, such as arthritis, hypertension, abnormal lipids and heart failure, and new vaccines have virtually eradicated many dreaded childhood diseases. Greater understanding of the molecular mechanisms of disease has facilitated making these drugs safer and more effective.

These stunning successes notwithstanding, the pharmaceutical industry has become a lightning rod for critics. For example, Marcia Angell, former editor of the New England Journal of Medicine, blasted the drug industry in a much-publicized 2004 book, accusing it of profiteering and having become "a marketing machine to sell drugs of dubious benefit." She maintained the pharmaceutical industry's reputation for innovation is a myth, that it "feeds off the NIH" and that new drugs "nearly always stem from publicly supported research."

Many of these accusations are questionable, and some are blatantly unfair or untrue - in particular, the accusation that the drug industry merely exploits publicly funded research.

In 1999, the National Institutes of Health thoroughly investigated whether its research funding commonly leads to the development of pharmaceuticals, the profits from which taxpayers might be entitled to share.

Of 47 drugs that had earned revenues of $500 million or more, NIH support had figured significantly in only four, two of which were actually the same drug. The NIH supports primarily pre-commercial, fundamental research into the biochemistry, physiology and molecular biology of cells and organisms, in health and disease.

This issue has been further and more comprehensively investigated by economist Benjamin Zycher and his co-workers, who published their results June 24. They constructed "summary case histories of 35 drugs and drug classes (a group of drugs used to treat a given medical condition in similar ways) identified in the scholarly literature as important and/or that were among the most prescribed in 2007."

Among the 35 drugs and drug classes, which encompass every major group and individual medicine, private-sector research was responsible for "central advances in basic science for seven, in applied science for 34, and in the development of drugs yielding improved clinical performance or manufacturing processes for 28." These advances occurred in basic science - the understanding of fundamental biological processes in health and disease; in applied science - the discovery of compounds that treat particular conditions; and in new methods for the purification, formulation and manufacturing of those compounds.

Mr. Zycher and his colleagues concluded that scientific contributions of the private sector were essential for the discovery and/or development of virtually all the 35 drugs and drug classes researched, and that, therefore, few if any of the drugs and drug classes investigated would have been developed (or, at least, their development would have been delayed significantly) without the contributions and participation of the pharmaceutical firms.

The U.S. research-based pharmaceutical industry (that is, excluding companies that make generic drugs) currently spends upward of $58 billion annually on R&D. Moreover, it invests in research and development a far greater percentage of sales (17.7 percent) than any other industrial sector, including electronics (6 percent), telecommunications (5.1 percent), and aerospace (3.7 percent).

The vast expenditures on R&D are not surprising, given the uncertainty of success of a new drug candidate and the huge costs of development. Only 1 of every 5,000 products screened is ultimately approved as a new medicine; the others drop out because of concerns about safety, efficacy or profitability. The direct and indirect costs to take a drug from discovery to the pharmacy are now more than $1.3 billion. But the most sobering statistic of all is that because of the enormous expense of drug development, only 1 in 5 drugs approved and marketed ultimately produce revenues that recoup their R&D costs.

This state of affairs encourages drug companies to focus increasingly on financial blockbusters - usually treatments for chronic conditions that affect large populations - and to neglect products with more modest prospects, no matter how medically important or technically feasible they may be. For example, although they are much needed and highly cost-effective, antibiotics and vaccines are out of favor, and one major drug company abandoned a promising new drug that prevents the rejection of lung transplants.

The pharmaceutical industry is far from perfect, to be sure. Drug companies develop too many "me-too" drugs that differ little from earlier products, and spend disproportionately on marketing and promoting them. And they have been woefully ineffective in lobbying for public policy that would create needed incentives for R&D.

But in large part these developments are the result of the industry's being the victims of government policies, not beneficiaries, as some industry critics would have us believe. In spite of increasingly powerful and precise technologies for drug discovery, purification and production, development expenses have soared.

One important reason for these debilitating costs is that an increasingly risk-averse FDA keeps raising the bar for approval, especially for innovative, high-tech products. The FDA is too often a reed in the political winds: Regulators now find themselves in a gale blowing them toward a more imperious and adversarial posture toward drug companies.

We need public policy strategies that will lower the costs and time of development. That would stimulate formation of new companies (the number of which is now shrinking) and enable them to pursue more drug candidates, including some that are medically needed but offer only modest revenues. In the meantime, Americans will go on dying for reform.

ABOUT THE AUTHOR

Dr. Henry I. Miller is an academic researcher, author and commentator. He graduated from the Massachusetts Institute of Technology with a Bachelor of Science degree in Life Sciences and attended the University of California, San Diego, receiving the M.S. (Molecular Biology) and M.D. degrees. After completing his clinical training in internal medicine as a Clinical Fellow in Medicine at Harvard Medical School, Dr. Miller was a Research Associate in the laboratory of Philip Leder at the National Institutes of Health. Dr. Miller joined the FDA in 1979 and served in a number of posts involved with the new biotechnology, among them Special Assistant to the FDA Commissioner and founding director of the FDA's Office of Biotechnology. During his government service, Dr. Miller wrote and lectured frequently on the regulatory requirements for biotechnology products, and participated frequently on various expert and policy panels as a representative of the FDA or the US government. As the FDA's contact person for the Securities and Exchange Commission, he reviewed the accuracy of claims made by companies in their prospectuses about the likelihood and timing of drug approvals. Dr. Miller is currently at Stanford University, where he is a fellow at the Hoover Institution. His research focuses on the relationship between science and regulation, the costs and benefits of government regulation, models for regulatory reform, and federal and international oversight of biotechnology. Other research areas include various aspects of bioterrorism and the need for better oversight of nutritional supplements. Dr. Miller is the author of more four hundred articles in scholarly and popular publications. He writes frequently for such publications as the Financial Times (London), Wall Street Journal, Los Angeles Times, Chicago Tribune, Washington Times, Biotechnology Law Report, Trends in Biotechnology, and Nature Biotechnology. He is the author of Policy Controversy in Biotechnology: An Insider ' s View (R.G. Landes Co. and Academic Press, 1997) and ' To America ' s Health: A Proposal to Reform the Food & Drug Administration ' (Hoover Institution Press, 2000). Dr. Miller is a director of Consumer Alert, a national consumer advocacy organization; a director of the American Council on Science and Health; an Adjunct Scholar at the Competitive Enterprise Institute; and a scientific advisor to the George C. Marshall Institute.