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Innovation and the Pharmaceutical
Research and Development Industry
January 2002
MSD South Africa
DISCOVERY
Enzymes, receptors, genetics, proteomics
DEVELOPMENT
Safety, quality and efficacy tests
PRODUCTION
Quality assurance
REGISTRATION
Longer than 10 years
More than $800 m
Medical and marketing approval
MONITORING
Physician and patient satisfaction
FROM DISCOVERY TO PATIENT
1 medicinal product
0
5 years
10 years
15 years
10 years of research
Source : « Recherche & Vie », LIM (AGIM)
2 to 3 years of administrative
procedures
20 years Supplementary
Patent expiry Protection
R&D: SCIENTIFIC RISK
DISCOVERY AND DEVELOPMENT OF A SUCCESSFUL MEDICINE
YEARS
15
14
13
12
11
10
9
8
7
6
5
4
3
2
1
0
PHASES
INTRODUCTION/
REGISTRATION
DEVELOPMENT
1
2
2-5
POST-MARKETING SURVEILLANCE
III
CLINICAL TEST (HUMANS)
BASIC
RESEARCH
II
I
5 - 10
10 - 20
IV
PRECLINICAL TEST (ANIMALS)
3,000 - 10,000
SYNTHESIS,
EXAMINATION &
SCREENING
QUANTITY OF SUBSTANCES
Source: Based on PhRMA analysis, updated for data per Tufts Center for the Study of Drug Development (CSDD) database.
LENGTH OF DRUG DEVELOPMENT
TOTAL TIME FROM SYNTHESIS TO APPROVAL
16
14.2
11.6
YEARS
12
8.1
8
4
2.4
2.3
2.8
2.1
4.4
15.3
5.5
6.9
2.5
3.2
5.1
5.9
6.1
1970-79
1980-89
1990-95
-
1963-69
PRECLINICAL TESTING
Source: Tufts CSDD, NCE Database, 1995.
CLINICAL TESTING
FDA REVIEW
$ million
COST OF DRUG DEVELOPMENT
900
800
700
600
500
400
300
200
100
0
802
431
459
1993
1997
312
136
1979
U of Rochester
1991
Tufts
OTA
Myers &
2001
Tufts
Howe
Source: R. Hansen, PhD. University of Rochester; J.A. DiMasi, Tufts University; Office of Technology Assessment, Myers & Howe, 1997; Tufts Center for the Study
of Drug Development, 2001. All figures except 2001 reflect impact of inflation as measured by the GDP Delfator.
COSTS VS. RETURNS: 1980’S STUDY
$1,200
AVERAGE PV OF RETURNS:
$224 MM
PRESENT VALUE ($1990 MM)
$1,000
$800
AVERAGE R&D COSTS:
$202 MM
$600
$400
$200
$0
1
2
3
4
5
6
7
8
9
10
DECILES
Source: Grabowski and Vernon. “Returns to R&D on New Drug Introductions in the 1980’s.” Journal of Health Economics. Vol. 13, (Novembe
1994): 383-406.
INNOVATION OF THE PHARMACEUTICAL INDUSTRY
SOURCES OF 100 MOST PRESCRIBED
DRUGS IN THE US IN 1992
94
PATENTED BY:
INDUSTRY
UNIVERSITIES & GOVERNMENT
2
4
INDIVIDUALS
Source: PhRMA Survey; Center for the Study of Drug Development, Tufts University (1991)
Pharmaceutical Research
and Development Process
• 1 in 5,000 compounds
make it to market
• Takes 12 to 15 years
from discovery to launch
• Average cost of nearly
$500 million
Benefits of Pharmaceutical R&D
• Prevent and treat disease
• Reduce costly hospitalization,
nursing home stays and
surgeries
• Return patients to
productive lives
Benefits of Pharmaceutical R&D
• Antibiotics and vaccines have virtually wiped out
diptheria, syphilis, whooping cough, measles and polio
in many parts of the world
• 8 out of 10 children can now survive leukemia
• Over the past 30 years, medicines have helped reduce
heart disease and stroke by half for many populations
Worldwide Research Continues
• 96 new drugs for heart disease
and stroke
•316 anti-cancer medicines
•122 drugs to treat AIDS
•146 drugs and vaccines for
children
•17 new treatments for
Alzheimer’s disease
•29 medicines for arthritis