R&D in Pharma Sector

The research-based pharmaceutical industry plays a unique role in developingnew medicines and vaccines to prevent and treat diseases, andto improve the lives of patients. For the past 100 years, the Private Sectorhas produced nearly all the medicines and vaccines in the market. Whena pharmaceutical company invests in research and development (R&D) ofnew medicines and vaccines, it first screens for chemical and biological compoundsthat exhibit the potential for treating new or existing conditions. Accordingly,for any particular medicine, R&D begins once researchers identifya promising compound among the5,000ñ10,000 screened, on average. Researchersthen extensively test the compoundto ensure its efficacy and safety,a process that can take 10 to 15 years.To illustrate, in 2011, 35 new medicineswere launched, while more than 3,200compounds were at different stages ofdevelopment. Today, the cost of developinga single drug amounts to overUSD 1.3 billion compared to USD 138million in 1975. This ten-fold increasereflects the various technical, regulatory and economic challenges facing R&Dpipelines. Companies often experience lost R&D investments (that is, R&D expendituresthat do not materialize in a market-approved medicine) becausepharmaceutical R&D is marked by high failure rates. An early-phase compoundmay have a promising outlook, but only preclinical and clinical trialswill demonstrate its efficacy, quality and safety. In addition, lost investmentsmay increase when a failure occurs in later R&D phases. A phase-III failure issignificantly more costly than a preclinical failure because each phase is associatedwith a certain amount of required investment. In some, about 4% ofinvestigated compounds become bio-therapeutic medicines compared with14% for small molecules. The research-based pharmaceutical industry is estimatedto have spent nearly USD 135 billion globally on pharmaceutical R&D in 2011 .Rising R&D costs andmore stringent testing requirementshave been accompanied bya decline in new medicine approvals.The number of new chemicalor biological entities (NCEs andNBEs) launched on the world marketfell to 149 in the 2007ñ2011period compared to 196 a decadeearlier. Moreover, the researchbasedpharmaceutical industryis expected to face a substantialdrop in revenue in the near future,when many of its patents onìblockbusterî medicines are dueto expire. These challenges havenot diminished the industryís innovativedrive, but have rather encouragedit to adopt new models,of innovation. Open collaborationand new business models such as joint ventures betweenpharmaceutical companies and other external entitiesare ways to increase the productivity of pharmaceuticalresearch by facilitating partnerships involving academiaand the public and private. A blockbuster medicine isone that generates annual sales of at least USD 1 billionfor the company that creates it.

R&D Investments:
Of all industrial sectors, the research-based pharmaceuticalindustry has consistently invested the most in R&D,even in times of economic turmoil and financial crisis.Compared to other high-technology industries, the annualspending by the pharmaceutical industry is fivetimes greater than that of the aerospace and defenseindustries, 4.5 times more than that of the chemicals industry,and 2.5 times more than that of the software andcomputer services industry.

In the United States, R&D investments of pharmaceuticalcompanies have grown consistently over the past 15years, and more than doubled the publicly-funded NationalInstitutes of Healthís (NIH) expenditures in 2009.Spending on R&D by the research-based pharmaceuticalindustry in Japan amounts to 17.3% of its sales, inthe US to 15.5%, and in the European Union to 14.1%.20In 2011, the pharmaceutical industry registered 7,683patents through the Patent Cooperation Treaty (PCT) ofthe World Intellectual Property Organization. No otherbusiness sector has such high levels of R&D intensity.According to European Commission statistics, 5 of the10 leading global R&D firms in 2010 were pharmaceuticalcompanies.

R&D impact on Global Health:
Pharmaceutical R&D has dramatically improved the livesof patients. Medical discoveries, big and small, have increasedlife expectancy and resulted in a better quality oflife for many. Vaccines have enabled the global eradicationof smallpox and the regional elimination of polioand measles. Currently, vaccines save the lives of over 2million children each year. Between 2000 and 2006, immunizationcampaigns cut the number of deaths causedby measles by 68%, with a reduction of 91% in Africa.Since 1928, scientists have discovered and developedclasses of antibiotics, leading to the treatment and cureof several thousand types of infection and saving over200 million lives. With the help of major medical discoveries,the research-based pharmaceutical industry hasdeveloped more than 20 antiretroviral treatments forHIV/AIDS, essential to control of the epidemic. In 2011,there were 94 drugs in the pipeline for malaria, 88 drugsin development for HIV/AIDS, 932 for all types of cancer,200 for diabetes, and 460 for rare diseases. It is estimatedthat medicines prevent at least 3 million deaths frommalaria and save 750,000 children from disability everyyear. Pharmaceutical progress has led to a dramatic declinein death rates for diseases such as HIV/AIDS, cancer,polio, and measles. For example, death rates for HIV/AIDS in the United States have fallen from 16.2 deathsper 100,000 people in 1995 to 3.7 deaths per 100,000.The number of AIDS-related deaths world-wide peakedat 2.1 million in 2004 and has since fallen to an estimated1.7 million deaths in 2011. This can be largely attributedto the introduction of new antiretroviral therapies (ARTs)combined with more patients being provided with treat- ment. In the past 10 years alone, over 340 medicineshave been approved that offer new hope to patients withhard-to-treat diseases.

R&D for NTD:
The World Health Organization (WHO) has identified 17Neglected Tropical Diseases (NTDs), which form a significantpart of the global disease burden and touch the livesof more than 1 billion people. Some NTDs can have lifelongconsequences for individuals. Others lead to acuteinfections that can be fatal. These diseases ñ whose namesare not commonly known ñ include Buruli ulcer disease,dengue, cholera, trachoma, and guinea worm disease, andprimarily affect poor people in tropical and subtropical areas.NTDs demand a distinct business/innovation modelbecause the potential market does not adequately supportR&D investments on a commercial basis. In this context,various pharmaceutical companies have collaboratedwith different stakeholders to form product developmentpartnerships (PDPs), which bring together the expertiseand resources of different players including academia,industry, private foundations, and governments. In 2011,the industry contributed about 18.7% of the total researchfunding for malaria, 48.6% for dengue, and 23.4% tuberculosis.Overall, Industry was the second largest funder forneglected diseases research, investing over USD 525 million.For example, the portfolio of the TB Alliance consistsof seven drugs in the second phase of clinical trials andtwo drugs in the third phase of clinical trials. The Drugs forNeglected Diseases initiative (DNDi) aims to deliver 11 to13 new treatments by 2018 for disease, malaria, leishmaniasis,helminths, paediatric HIV, and sleeping sickness, ofwhich six are already available ñ unprecedented progressin the fight against these diseases.

Key Facts:

Research & Development

  • It takes 10ñ15 years to develop a medicine or vaccine.
  • The research-based pharmaceutical industry currently spends over USD 135 billion on R&D per year.
  • In 2011, 35 new pharmaceuticals were launched, out of more than 3,200 compounds in development.
  • In 2007ñ2011, the number of new chemical or biological entities launched on the world market fell to 149 from 196 a decade earlier.
  • It costs an average of USD 1.38 billion to develop a single drug.
  • In 2011, 5 of the 10 leading global R&D firms were pharmaceutical companies.

R&d for Developing World

  • Every year, drugs and vaccines prevent at least 3 million deaths from malaria and save 750,000 children from disability.
  • Between 2000 and 2006, immunization campaigns helped reduce the number of deaths from measles in Africa by 91%.
  • In 2011, there were 94 drugs in the pipeline for malaria and 88 drugs in development for HIV/AIDS.
  • In 2011, IFPMA members had 93 ongoing R&D projects related to diseases of the developing world.
  • In 2011, Industry was the second largest funder for neglected diseases
  • Research, investing over USD 525 million.

R&D Pipeline
In 2011, the number of drugs in development for particular disease areas was:

  • Cancer: 948
  • Cardiovascular disorders: 252
  • Diabetes mellitus: 212
  • HIV/AIDS: 88
  • Rare diseases: 460

For every USD 24 spent on new drugs for cardiovascular diseases in OECD countries, USD 89 were saved in hospitalization and other healthcare costs.

The Pharmaceutical Market

  • The pharmaceutical market will reach nearly USD 1,200 billion by 2016.
  • Leading emerging countries will account for 28% of global spending on pharmaceuticals by 2015, compared to 12% in 2005.
  • The US share will decline from 41% in 2005 to 31% in 2015, while Europeís share will fall from 27% in 2005 to 19% in 2015.

The writer is Director Operations, BIOPHARMA Laboratories Ltd., Dhaka

  Dhaka -

Monday 22 Jan 2018

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