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The US Pharmaceutical Industry (Why do Drugs Cost so Much?) Some Important Numbers • Average time from discovery to market for new drug is 15 years • A very small percent of new drugs make it to market – Big investment, no return • Average cost from discovery $500,000,000 market is Global Drug Companies • All major companies are headquartered in US, United Kingdom, Germany or Switzerland • All drugs must be approved by FDA (Federal Drug Administration) for use in the US and by the EMEA (European Agency for the Evaluation of Medicinal Products) for use in the Europe • Majority of new drugs are discovered and brought to market in the US 1. Drugs are “discovered” and developed 2. Patent process, why it is necessary 3. Federal Drug Administration approval Regulatory Environment 4. Clinical trials of new drugs 5. GMP Manufacture of drug 6. Marketing and sale of drug 7. Post marketing surveillance 8. Off label use and new applications 9. Backup, second-generation drugs Integrated, Feed-forward And Feedback Process Discovery Research • Identify new drug target (Biology) – Usually a protein – Role in disease most often not known • Identify NCE (new chemical entity) that interacts with target (usually inhibits its function) (CHEMISTRY & Biology) • Identification of activity in animal model – Does this model resemble disease? – Must be orally active Patents on Drugs • 17 year duration from filing of application (timing of application is important) • Generics enter into the market after patent expiry – price covers cost of manufacture +small profit – price does not reflect originating company’s costs of the drug discovery and development • Patent process is absolutely essential to support discovery of new drugs – For global use of drugs, adherence to patent rights is essential Development • Development process similar for all NCEs – Toxicology in vitro and in rodents – Drug Pharmacokinectics (describes distribution of a drug in the body) – Dose dependence/tolerance – Formulation/conditions for optimal state for stability, delivery, and absorption FDA Involvement Starts FDA applications managed by Regulatory Affairs and Quality Control Departments in Pharma Companies Company Files an Investigational New Drug (IND) Application • Application to administer an NCE to humans in a clinical trial • Summary of all available data is submitted to FDA, along with clinical plans – Many meetings of company with FDA precede this filing • 30-day waiting period for FDA review. But before Clinical trials can begin…, you need the drug • Production: from mg to gram quantities – Happens prior to IND filing • Manufacture: (usually Kg) of drug – Manufacture must be under federally mandated cGMP (current Good Manufacturing Procedures), and facility, process and end-product are reviewed and monitored by the FDA Clinical Program: A Single Experiment to Determine Efficacy • Phase 1 (usually normal volunteers) – safety and pharmacokinetics • Phase 2 (patients -small number) – initial assessment of pharmacological effect – safety and pharmacokinetics in patients – drug metabolism • Phase 3 (patients -large number) – definitive demonstration of efficacy • Phase 4 – studies required as a condition of FDA approval – new indications Again, the FDA • Based on the data from the clinical trials, company makes a decision on filing for a New Drug Application (NDA) • Submit an application with all clinical data, – For approval must have manufacturing procedure under control and up to specs: • Current Good Manufacturing Practice for Finished Pharmaceuticals (cGMPRS) • Approval process can take up to a year • FDA can request additional studies prior or after NDA approval Marketing and Sales • Marketing dept. enters process at beginning of discovery phase • Which disease market? – Is the market big enough to recoup cost of development? – What are hurdles/possibilities of selling drug in other countries? – Develop continuing strategies for marketing through life of drug • How do physicians learn about and obtain the drug? – Published scientific articles – Trained sales force • Targets specific disciplines of medicine • Pharmaceutical sales force plays major educational role Post-Marketing Surveillance • Manages information of adverse drug reactions (ADRs) • unforeseen complication of drug treatment (e.g., drug-drug interactions, low incident events, etc) • Usually staffed by nurses and physicians • Maintains patient database • Disseminates information – Company receive reports of ADRs from physicians – Company must immediately: • Report to FDA • Inform health care community of adverse events in every country selling drug Clinical and Marketing, Again • Marketing and legal departments monitor physician and patient use of drug for nonapproved conditions • Clinical dept. works with researches and clinicians internally and in academic community to establish efficacy for other conditions, diseases Backup, second-generation drugs: Discovery & Development Again • Characteristics desired in a second generation drug – Derived from • clinical trials, continued patient use, ADRs, new applications, absorption, metabolism, pharmacokinectics • When does process begin?: – initial development of parent drug – results of Phase II clinical trials Now the whole process begins anew, with some shortcuts possible Challenge for Global Pharma in 21st Century • Direction of new drug development follows financial opportunities – Pharma companies unlikely to develop and/or sell drugs that treat major diseases of the poor in developing countries – Pharma companies unlikely to sell drugs in poor countries • What are possible resolutions to economic considerations Vs world healthcare? Major points • Large investment, high risk required for drug discovery development • Time frame to market nearing 2 decades • Highly regulated environment • New drugs have limited sales life • Major challenges to industry with respect to global intellectual property laws and world health needs