Saved by the professors?

The Guardian reports triumphantly that Scientists find way to slash cost of drugs; Indian-backed approach could aid poor nations and cut NHS bills. There appears to be some merit in the plan for the specific drug program (it's funded by the Wellcome Trust), but I wouldn't bet on revolutionary results especially on a large scale. Here's the basic idea:

• Make improvements in the molecular structure of an existing, on-patent drug
• Perform clinical trials in a low-cost location (in this case India)
• Manufacture the drug in a low-cost location (India again)

According to the Guardian:

The process has the potential to undermine the monopoly of the big drug companies and bring cheaper drugs not only to poor countries but back to the UK...

Multinational drug companies put the cost of the research and development of a new drug at $800m (£408m). Professors Shaunak and Brocchini [the brains behind the operation] say the cost of theirs will be only a few million pounds...

Once the drugs have passed through clinical trials and have been licensed in India, the same data could be used to obtain a European licence so that they could be sold to the NHS as well.

"The pharmaceutical industry has convinced us that we have to spend billions of pounds to invent each drug," [Shaunak] said. "We have spent a few millions. Yes, it will be a threat to the monopoly that there is."

An earlier, similarly boastful press release contains hints of the problems this approach is likely to have:

The research team have invented a cost-effective technology which lets them open up the interferon protein, drop in a sugar molecule called PEG and close the protein. The PEGylated-interferon retains its shape and leads to the cure of Hepatitis C infection in many patients. Clinical trials will start in India next year.

Here are some challenges I see:

• The professors aren't exactly the first to tweak existing drugs. That's how companies like Sepracor make their living and it's one way "me-too" drugs are introduced within a class. Maybe the professors have a technological breakthrough on their hands. If so, can they repeat it for other drugs? On the other hand, will they be sued successfully for patent infringement if the improvement isn't significant enough?
• It's a sign of overconfidence to say the drug "leads to the cure... in many patients" in one sentence and then "clinical trials will start... next year" in the next. Large-scale trials don't tend to go as smoothly as the professors assume. There's a good chance the drug will fail or that results will be inconclusive.
• The $800 million number can't really be compared with the "few million pounds" the professors cite. First, the $800 million is exaggerated. Second, it includes the cost of failed drugs (i.e., most drugs). Third, it includes all costs of R&D, which it doesn't seem the professors include.
• Clinical trials are already often performed in low-cost locations such as India. Why will the clinical trials for this drug be cheaper than if a big pharma or CRO ran them? Will the trials be smaller? Will they be less rigorous? Will they somehow be done more efficiently? Will the Indian government bury the true cost?
• Drugs are also manufactured in low-cost locations such as India. Will the company the professors are partnering with offer its services at a lower rate than it offers commercial players? Will the manufacturing process be up to European standards?
• In general, is it worthwhile to begin making tweaks to products once they are already on the market? For traditional drugs, development of generics will be cheaper because clinical trials aren't needed. High biotech costs can be addressed by improved price regulation even if generics aren't practical.

I wish this drug well but I don't think it will change the industry.