Research & Development of the european pharmaceutical industry

Inhaltsverzeichnis

1. Introduction

2. Structure of the Research & Development of the European Pharma-Industry
- Clinical Trials
- Outsourcing
- Contract Research Organisations (CRO)
- Company research

3. Regional R & D in Europe
- Most important and effective regions in Europe
- UK
- Involvement of the EU
- the EU and Clinical Trials
- Central and Eastern Europe

4. Subjects of R & D
- Biotechnology
- issue of patents

5. Challenges for R & D of the pharmaceutical Industry of Europe
- Patient recruitment
- competition from abroad

6. Conclusion

7. References

1. Introduction

The health of their population has always been a great concern for governments of Post-War Europe. In order to achieve their goals they had to work closely together with the pharmaceutical Industry.

With the phenomenon of the aging population the importance of development of new drugs is increasing. The increasingly old population of Europe creates a big market for pharmaceutical companies.

The pharmaceutical Industry is a very complex sector with close links to other Industries. The chemical Industry for example is an important supplier for materials needed in the process of creating new drugs. Furthermore is the market for pharmaceuticals characterized by extremely little concentration and a huge variety of products. Globally in 1998, the 300 best-selling products held a share of less than 45% of the worlds market. The top two products held 1.3% of the market each.^[1]

This fact creates a necessity for the companies to research new, so called “Blockbuster drugs” to succeed on this market with a high competition. The data on the various methods of drug discovery is enormous and sophisticated.

In this paper the structure of the Research & Development sector of the European pharmaceutical industry will be examined, which is of increasing importance for the success of the individual companies. The specific data on the R & D section will be given a general character.

Furthermore it will give a brief overview of the different regions in Europe and their individual differences.

In the end, the difficulties and challenges of R & D in the pharmaceutical industry will be described and compared to other pharma markets abroad.

“Innovation is the lifeblood of the pharmaceutical industry and the key to any improvement in medical care.”

-Jean-François Dehecq, Vice President of the European Federation of Pharmaceutical Industry Associations-

“Since aspirin was invented a century ago, scientific and technological breakthroughs in the pharmaceutical industry have enabled researchers to research complex diseases efficiently, first by exploring the biochemistry of tissues, and then that of individual cells.”^[2]

This development is shown in the chronology of drug innovation.

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2. Structure of the Research and Development of the European Pharma-Industry

The pharmaceutical Industry is a key asset of the European Economy. Although there has been a recent slowdown of the major economies the employment in the R&D section of this industry is rising.

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Source: European Federation of pharmaceutical industries and associations

This can also be seen in the following table, where the total expenditures on R & D in Europe are summed up.

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A measure of innovation in the pharmaceutical sector is the number of launches of new chemical and biological entities. In the last decades there has been an increasing competition in the section of research in the world. European pharmaceutical companies, once leading in the world have lost some of their competitiveness, as shown in the following table.

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Generally pharmaceutical R & D has the following characteristic features:^[3]

- Lengthy: by the time a medicinal product is placed on the market, an average of 12-13 years will have elapsed since the synthesis of the new active substance
- Costly: the cost of researching and developing a new chemical or biological entity was estimated at € 895 million in 2001 (Di Masi J., Tufts University, Centre for the Study of Drug Development, November 2001)
- Of a high risk nature: on average, out of every 10,000 substances synthesised in laboratories, only one or two will successfully pass all the stages to become marketable medicines.

R&D costs are rising by 20% per year and clinical trials take up half the profitable life of a patent. Yet if a pharmaceutical company launches a successful drug before its competitors, it is set to make vast amounts of money. The increasing competition is due to a large number of successful small drug discovery and development firms.

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The risky nature of R&D can be expressed with the fact, that only 3 out of ten drugs ever recover their complete R&D costs. Furthermore it is estimated that only 15% of drugs entering development will reach the market. The success rate from Phase III to the market can range between 50% and 70%.^[4]

According to this observation the speed to market is more important than ever. The following section will describe the efforts made by the pharmaceutical industry to make this process more efficient.

Clinical Trials

In the timeline above three phases of the so called “Clinical Trials” are shown. During those a new developed drug is compared with possible alternative treatments to find out which is the best in which circumstances for which patients.

Generally they are intended to:^[5]

- Discover or verify the clinical, pharmacological or other pharmacodynamic effects of one or more trial products
- Identify any adverse reactions to one or more such products
- Study absorption, distribution, metabolism and excretion of one or more such products

Conducting a trial includes:

- Administering, or giving directions for the administration for the administration of, an investigational medicinal product to a subject for purposes of that trial.
- Giving a prescription for an investigational medicinal product for the purposes of that trial
- Carrying out any other medical or nursing procedures in relation to that trial
- Carrying out any test or analysis to:
- Discover or verify the clinical, pharmacological or other pharmacodynamic effects of the investigational medicinal products administered in the course of the trial
- Identify any adverse reactions to one or more such products
- Study absorption, distribution, metabolism and excretion of those products

Every Trial involves a sponsor, who has to take responsibility and administer the research. The data of the Trial has to be saved in a detailed protocol.

The EU is also involved in directing the trials. More in the following section “Involvement of the EU”.

Clinical Trials are considered to hold the greatest value in the process of discovering a new drug. In most of the companies they take up 40% of the complete R&D expenditure.

Outsourcing of R&D

Due to high costs one can observe a process of outsourcing of the Research & Development to Contract Research Organisations or universities and industrial collaborations, a process in which the first mentioned are playing the most important role.

The so called process or Outsourcing is increasing in importance for the pharmaceutical Industry. The overall outsourcing market is expected to grow significantly over time to perhaps 50% of pharmaceutical R&D.^[6]

The primary goal of outsourcing is to accelerate the discovery process, to control development costs, to exploit profitable niche markets and to minimize time to market.

[...]

^[1] Data taken from „Combining discovery with development” by Dr. Peter Eddershaw; World pharmaceutical frontiers 2003/2004

^[2] Source: European Federation of pharmaceutical industries and associations

^[3] Source: European Federation of pharmaceutical industries and associations

^[4] Data taken from “High-throughput Process R&D Solution – Strategies for accelerating and intensifying Pharma Process R&D” by Tom van Aken; PharmaTech Series Business Briefing, Future Drug Discovery 2003

^[5] The lists are quotes from “How are Research and Clinical Trials Governed?” by Jo Wilson, European Director of Marsh Healthcare Services; EPC European Pharmaceutical Contractor edition Autumn 2003

^[6] Source: Deutsche Bank