Any investor knows that a balanced portfolio offers protection against the inherent risk of the marketplace. Could the same be true for Alzheimer's drug discovery? In a commentary in this week's Science Translational Medicine, Andrew Lo of the Massachusetts Institute of Technology in Cambridge and colleagues argue for a new rationale. They claim that a "portfolio approach" has a better chance of success than the current method, in which competing sponsors advance individual projects separately from each other. The portfolio approach would entail supporting many drug-discovery ventures simultaneously from a coordinated funding platform. By Lo's reckoning, this would cost more than $38 billion for 64 parallel projects. Lo proposes a "megafund" for this endeavor, supported mostly by the public sector.  He told Alzforum that over the long term, savings to the $150 billion a year Medicare and Medicaid costs for dementia care would help defray the expense. "If you amortize the $38.4 billion over a 30-year term, the expected rate of return would be about 16 percent, per year," said Lo. "That sounds like a terrific investment from the taxpayer's perspective."

"Dr. Lo is spot-on about the urgency of the dementia health crisis … the value of parallel discovery, and the opportunities for public-private partnerships," Ian Kremer, executive director of Leaders Engaged on Alzheimer's Disease, wrote to Alzforum (see full comment below).  Industry leaders contacted by Alzforum agreed that this approach was worth taking. Industry has already begun a concerted effort to integrate resources and research, for example within the EPOC-AD initiative (see Dec 2013 conference news) to pool resources to integrate their drug discovery, or DIAN, which tests drugs from two sponsors in the same trial (see Oct 2012 news story). This new proposal outlines a financial business model to enable such collaborations further.

Lo, an economist, got the idea partly from studying the securities industry. In 2003, $3 trillion was invested in mortgages, for example. He wondered why similar securities could not be used for drug development. "I thought people had tried this approach and it did not work, but the more I looked into it, the more I realized industry had not tried it," he told Alzforum.

Applied to cancer, the megafund approach would readily draw private investors, Lo argues, because the anticipated rate of return is high. In the last two and a half years the FDA approved 33 new drugs for cancer, three for breast cancer alone in the last year. Because the track record for dementia is dismal in comparison, its megafund would fail to attract private investment. Over a 13-year development period—a typical time scale for a new drug—the rate of return would be minus 14 percent. Pick a longer horizon, however, and the outlook turns rosy. Lo and colleagues calculated that by 30 years, slowing the rate of progression of AD would yield expected returns of investment of almost 11 percent. The 16 percent figure comes from assumptions of delaying onset by five years.

Getting government to invest over the longer term for a better rate of return might be easier said than done, though Kremer noted that the climate may be changing for the better. The National Plan to Address Alzheimer's Disease, FDA and NIH initiatives, and new public and private partnerships are all steps in the right direction. "The relatively small and heroic cadre of government and private-sector visionaries and risk-takers upon whom dementia advocates have relied for decades may be soon joined by a wave of new allies more willing and more committed than ever before to bringing game-changing innovation to dementia science, care, and support," wrote Kremer.—Tom Fagan


  1. These are personal views of the author and do not necessarily reflect the views of the LEAD Coalition or its member organizations.

    I am neither a scientist nor an economist but, based on nearly two decades working in dementia advocacy and policy (and nearly three decades as a voter, taxpayer, and person whose family and friends have experienced dementia's devastation), I am certain that Dr. Lo is spot-on about the urgency of the dementia health crisis, the economic and budgetary toll it imposes, the need for more research targets, the value of parallel discovery, and the opportunities for public-private partnerships.  In fact, when I first heard Dr. Lo present an early version of his proposals last autumn, I was deeply encouraged by the visionary business case.  I am equally certain that merely being right about all those perspectives may not be enough to cause change to occur.  Decision-makers—especially those in government—need to be persuaded that the challenges and opportunities are identified properly just to get the conversation started.  Decision-makers still must weigh investing their energy and resources in one set of issues against many others, assessing values such as: likelihood of success and consequences of failure, availability and prioritization of necessary resources now and over time, opportunity costs, and the risks of unintended and often unexpected consequences.  If all that wasn't daunting enough to inspire decision-makers into paralysis, many also have to contend with being second-guessed by colleagues, constituents, and investors, particularly when the time-horizon to success is lengthy and almost invariably uncertain.  Elected officials in particular often have long memories about the vulnerabilities in their profession and the "what have you done for me lately" syndrome among voters; members of Congress remember Speaker Foley's defeat two decades ago and will remember Majority Leader Cantor's recent defeat two decades from now.  So, nearly everything for far too long has favored inaction against enormous, complicated, protracted catastrophes like dementia.

    Fortunately, albeit much later than would have been wise, the tide may be beginning to turn.  Precisely because dementia has become so much more prevalent over the past two decades—arguably, at least in part due to decision-makers' inertia—many more decision-makers are feeling the consequences personally as friends, colleagues, and loved ones are diagnosed or become caregivers for someone diagnosed with Alzheimer's disease or a related dementing condition.  Decision-makers in government and the private sector also are beginning to recognize the budgetary and economic imperatives to bend dementia's unsustainable and downright crippling cost curve.  We may now be at the dawn of a period in which decision-makers are more afraid of dementia's status quo and projected trajectory than of the panoply of risks involved with driving changes such as those proposed by Dr. Lo.

    The relatively small and heroic cadre of government and private-sector decision-maker visionaries and risk-takers upon whom dementia advocates have relied for decades may be soon joined by a wave of new allies more willing and more committed than ever before to bringing game-changing innovation to dementia science, care, and support.  Over the past three years in particular, the signs have been mostly positive.  A unanimous Congress passed the National Alzheimer's Project Act; the Obama administration led development of (and is working aggressively to implement) the National Plan to Address Alzheimer's Disease, the first goal of which is to effectively treat and prevent Alzheimer's disease by 2025; the FDA issued its transformative “Guidance for Industry, Alzheimer’s Disease: Developing Drugs for the Treatment of Early Stage Disease”; NIH Director Dr. Francis Collins used his authority to boost Alzheimer's research funding, which otherwise would have been severely eroded by the sequester; the public-private Accelerating Medicines Partnership was launched to fast-track pivotal research and data sharing essential to the dementia drug discovery field as a whole; the 2014 omnibus budget bill included historic increases in Alzheimer's research funding; and the December 2013 G8 Dementia Summit appears to have begun to crack open the door to meaningful international collaboration in addressing dementia science, care, and support.  Perhaps next through the door will be decision-makers prepared to act on Dr. Lo's prescription for revolutionizing the landscape of dementia science.

    View all comments by Ian Kremer

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News Citations

  1. European Project Mixes Adaptive Design with Trial-Ready Cohort

Series Citations

  1. DIAN Prevention Trial to Test Gantenerumab, Solanezumab

Further Reading

No Available Further Reading

Primary Papers

  1. . Parallel discovery of Alzheimer's therapeutics. Sci Transl Med. 2014 Jun 18;6(241):241cm5. PubMed.