Pharmaceutical Industry
Pharmaceutical Industry
Pharmaceutical Industry
History
The earliest drugstores date back to the Middle Ages. The first known drugstore was opened
by Arabian pharmacists in Baghdad and many more soon began operating throughout
themedieval Islamic world and eventually medieval Europe. By the 19th century, many of the
drug stores in Europe and North America had eventually developed into larger pharmaceutical
companies.
Most of today's major pharmaceutical companies were founded in the late 19th and early 20th
centuries. Key discoveries of the 1920s and 1930s, such as insulin and penicillin, became mass-
manufactured and distributed. Switzerland, Germany and Italy had particularly strong industries,
with the UK, US, Belgium and the Netherlands following suit.
Numerous new drugs were developed during the 1950s and mass-produced and marketed
through the 1960s. These included the first oral contraceptive, "The Pill", Cortisone, blood-
pressure drugs and other heart medications. MAO
Inhibitors, chlorpromazine (Thorazine), Haldol (Haloperidol) and the tranquilizers ushered in the
age of psychiatric medication. Valium (diazepam), discovered in 1960, was marketed from 1963
and rapidly became the most prescribed drug in history, prior to controversy over dependency
and habituation..
Cancer drugs were a feature of the 1970s. From 1978, India took over as the primary center of
pharmaceutical production without patent protection.[citation needed]
The industry remained relatively small scale until the 1970s when it began to expand at a greater
rate.[citation needed] Legislation allowing for strong patents, to cover both the process of
manufacture and the specific products, came in to force in most countries. By the mid-1980s,
small biotechnology firms were struggling for survival, which led to the formation of mutually
beneficial partnerships with large pharmaceutical companies and a host of corporate buyouts of
the smaller firms. Pharmaceutical manufacturing became concentrated, with a few large
companies holding a dominant position throughout the world and with a few companies
producing medicines within each country.
The pharmaceutical industry entered the 1980s pressured by economics and a host of new
regulations, both safety and environmental, but also transformed by new DNA chemistries and
new technologies for analysis and computation.[citation needed] Drugs for heart disease and for
AIDS were a feature of the 1980s, involving challenges to regulatory bodies and a faster
approval process.
Drug development progressed from a hit-and-miss approach to rational drug discovery in both
laboratory design and natural-product surveys. Demand for nutritional supplements and so-called
alternative medicines created new opportunities and increased competition in the industry.
Controversies emerged around adverse effects, notably regarding Vioxx in the US, and
marketing tactics. Pharmaceutical companies became increasingly accused of disease
mongering or over-medicalizing personal or social problems
Research and development
Drug discovery is the process by which potential drugs are discovered or designed. In the past
most drugs have been discovered either by isolating the active ingredient from traditional
remedies or byserendipitous discovery. Modern biotechnology often focuses on understanding
the metabolic pathways related to a disease state or pathogen, and manipulating these pathways
using molecular biology or Biochemistry. A great deal of early-stage drug discovery has
traditionally been carried out by universities and research institutions.
These estimates also take into account the opportunity cost of investing capital many years
before revenues are realized . Because of the very long time needed for discovery, development,
and approval of pharmaceuticals, these costs can accumulate to nearly half the total expense.
Some approved drugs, such as those based on re-formulation of an existing active
ingredient (also referred to as Line-extensions) are much less expensive to develop.
Drug researchers not directly employed by pharmaceutical companies often look to companies
for grants, and companies often look to researchers for studies that will make their products look
favorable. Sponsored researchers are rewarded by drug companies, for example with support for
their conference/symposium costs. Lecture scripts and even journal articles presented by
academic researchers may actually be 'ghost-written' by pharmaceutical companies. Some
researchers who have tried to reveal ethical issues with clinical trials or who tried to publish
papers that show harmful effects of new drugs or cheaper alternatives have been threatened by
drug companies with lawsuits.
In the United States, new pharmaceutical products must be approved by the Food and Drug
Administration (FDA) as being both safe and effective. This process generally involves
submission of anInvestigational new drug filing with sufficient pre-clinical data to support
proceeding with human trials. Following IND approval, three phases of progressively larger
human clinical trials may be conducted. Phase I generally studies toxicity using healthy
volunteers. A fourth phase of post-approval surveillance is also often required due to the fact that
even the largest clinical trials cannot effectively predict the prevalence of rare side-effects. Post-
marketing surveillance ensures that after marketing the safety of a drug is monitored closely. In
certain instances, its indication may need to be limited to particular patient groups, and in others
the substance is withdrawn from the market completely. Questions continue to be raised
regarding the standard of both the initial approval process, and subsequent changes to product
labeling (it may take many months for a change identified in post-approval surveillance to be
reflected in product labeling) and this is an area where congress is active.
Legal issues
Where pharmaceutics have been shown to cause side-effects, civil action has occurred, especially
in countries where tort payouts are likely to be large. Due to high-profile cases leading to large
compensations, most pharmaceutical companies endorse tort reform. Recent controversies have
involved Vioxx and SSRI antidepressants.
In many non-US western countries a 'fourth hurdle' of cost effectiveness analysis has developed
before new technologies can be provided. This focuses on the efficiency (in terms of the cost
per QALY) of the technologies in question rather than their efficacy. In England NICE approval
requires technologies be made available by the NHS, whilst similar arrangements exist with
the Scottish Medical Consortium in Scotland and the Pharmaceutical Benefits Advisory
Committee in Australia. A product must pass the threshold for cost-effectiveness if it is to be
approved. Treatments must represent 'value for money' and a net benefit to society. There is
much speculation that a NICE style framework may be implemented in the USA to ensure
Medicare and Medicaid spending is focused to maximise benefit to patients and not excessive
profits for the pharmaceutical industry.
Industry revenues
For the first time ever, in 2006, global spending on prescription drugs topped $643 billion, even
as growth slowed somewhat in Europe and North America. The United States accounts for
almost half of the global pharmaceutical market, with $289 billion in annual sales followed by
the EU and Japan.(pdf) Emerging markets such as China, Russia, South Korea and Mexico
outpaced that market, growing a huge 81 percent.
US profit growth was maintained even whilst other top industries saw little or no growth. Despite
this, the pharmaceutical industry is and has been for years the most profitable of all businesses
in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the
most profitable industries, with a return of 17% on revenue.
Teradata Magazine predicted that by 2007, $40 billion in U.S. sales could be lost at the top 10
pharmaceutical companies as a result of slowdown in R&D innovation and the expiry of patents
on major products, with 19 blockbuster drugs losing patent.
Switzerla
1 Novartis 53,324 7,125 11,053 138,000
nd
GlaxoSmithK United
4 42,813 6,373 10,135 106,000
line Kingdom
Johnson and
5 USA 37,020 5,349 7,202 102,695
Johnson
Sanofi-
6 France 35,645 5,565 5,033 100,735
Aventis
Hoffmann–La Switzerla
7 33,547 5,258 7,318 100,289
Roche nd
United
8 AstraZeneca 26,475 3,902 6,063 50,000+
Kingdom
Abbott
10 USA 22,476 2,255 1,717 66,800
Laboratories
Sales
Rank Company Based/Headquartered in
($M)
1 Pfizer 43,363 US
9 Abbott 19,466 US
11 Amgen 15,794 US
12 Wyeth 15,682 US
Marketing
Since the 1980s new methods of marketing for prescription drugs to consumers have become
important. Direct-to-consumer media advertising was legalised in the FDA Guidance for
Industry on Consumer-Directed Broadcast Advertisements.
Internationally, many pharmaceutical companies market directly to the consumer rather than
going through a conventional retail sales channel. For example, Japan-based Kenrico markets
largely though its company website.
Controversy about drug marketing and lobbying
There has been increasing controversy surrounding pharmaceutical marketing and influence.
There have been accusations and findings of influence on doctors and other health professionals
through drug reps, including the constant provision of marketing 'gifts' and biased information to
health professionals;[31][32] highly prevalent advertising in journals and conferences; funding
independent healthcare organizations and health promotion campaigns; lobbying physicians and
politicians (more than any other industry in the US[33]); sponsorship of medical schools or nurse
training; sponsorship of continuing educational events, with influence on the curriculum;[34] and
hiring physicians as paid consultants on medical advisory boards.
To help ensure the status quo on U.S. drug regulation and pricing, the pharmaceutical industry
has thousands of lobbyists in Washington, DC that lobby Congress and protect their interests.
The pharmaceutical industry spent $855 million, more than any other industry, on lobbying
activities from 1998 to 2006, according to the non-partisan Center for Public Integrity.[35]
Some advocacy groups, such as No Free Lunch, have criticized the effect of drug marketing to
physicians because they say it biases physicians to prescribe the marketed drugs even when
others might be cheaper or better for the patient.[36]
A 2005 review by a special committee of the UK government came to all the above conclusions
in a European Union context[38] whilst also highlighting the contributions and needs of the
industry.
There is also huge concern about the influence of the pharmaceutical industry on the scientific
process. Meta-analyses have shown that studies sponsored by pharmaceutical companies are
several times more likely to report positive results, and if a drug company employee is involved
(as is often the case, often multiple employees as co-authors and helped by contracted marketing
companies) the effect is even larger.[39][40][41] Influence has also extended to the training of doctors
and nurses in medical schools, which is being fought.[42]
It has been argued that the design of the Diagnostic and Statistical Manual of Mental
Disorders and the expansion of the criteria represents an increasing medicalization of human
nature, or "disease mongering", driven by drug company influence on psychiatry.[43] The
potential for direct conflict of interest has been raised, partly because roughly half the authors
who selected and defined the DSM-IV psychiatric disorders had or previously had financial
relationships with the pharmaceutical industry.[44] The president of the organization that designs
and publishes the DSM, the American Psychiatric Association, recently acknowledged that in
general American psychiatry has "allowed the biopsychosocial model to become the bio-bio-bio
model" and routinely accepted "kickbacks and bribes" from pharmaceutical companies.[45]
Developing world
The role of pharmaceutical companies in the developing world is a matter of some debate,
ranging from those highlighting the aid provided to the developing world, to those critical of the
use of the poorest in human clinical trials, often without adequate protections, particularly
in states lacking a strong rule of law. Other criticisms include an alleged reluctance of the
industry to invest in treatments of diseases in less economically advanced countries, such
as malaria; Criticism for the price of patented AIDS medication, which could limit therapeutic
options for patients in the Third World, where the most people have AIDS.
In September 2008 the Open Source Drug Discovery Network was launched in India to combat
infectious diseases common to developing countries.
Patents
Under World Trade Organization rules, a developing country has options for obtaining needed
medications under compulsory licensing or importation of cheaper versions of the drugs, even
before patentexpiration (WTO Press Release). Pharmaceutical companies often offer much
needed medication at no or reduced cost to the developing countries. In March 2001, South
Africa was sued by 41 pharmaceutical companies for their Medicines Act, which allowed the
import and generic production of cheap AIDS drugs. The case was later dropped after protest
around the world.
Nigerian clinical trial
In 1996, a pediatric clinical trial conducted on behalf of Pfizer tested the
antibiotic Trovan allegedly without first obtaining the informed consent of participants or their
parents.
Charitable programmes
Charitable programs and drug discovery & development efforts are routinely undertaken by
pharmaceutical companies. Some examples include:
As for many other major industries since the middle of the twentieth century, the pharmaceutical
industry has been portrayed as a global shadowy force in numerous western fiction works.
Notorious films such as The Fugitive (1993) and novels/films such as The Constant
Gardener characterize this trend.
Industry associations
GDP OF INDIA CITIES
A report by McKinsey Global Institute says that India will have 68 cities by 2030 with a
population of over 1 million, 13 cities with more than 4 million people, and 6 megacities with
populations of 10 million or more.
As many as 590 million people will be living in cities in India, and Mumbai and New Delhi will
be among the five largest cities in the world.
In 2030, India's largest cities will be bigger than many major countries in both population and
economic output.
The McKinsey report also says that cities will generate 70 per cent of new jobs, more than 70 per
cent of India's GDP, 85 per cent of the tax revenue that will finance development, and drive a
four-fold increase in per capita income.
But, currently, which are India's biggest cities in terms of GDP? Here are India's top 10 urban
centres in terms of their respective gross domestic product in 2009 based on purchasing power
parity, according to a PricewaterhouseCoopers study. . . Click NEXT to check out .
MUMBAI
India's commercial capital is not only the city with the highest GDP in India, it also ranks among
the world's top ten trade centres. The city contributes 25 per cent of industrial output and 70 per
cent of capital transactions to India's economy.
The city accounts for about 1 per cent of the total population in India but has a per capita income
which is almost three times that of India. Mumbai accounts for 14 per cent of India's income tax
collections and 37 per cent of the corporate tax collections in the country.
The city is the berth of significant financial institutions like the Reserve Bank of India, Bombay
Stock Exchange and the National Stock Exchange of India.
Numerous corporates and multinational companies have their headquarters in the city that
attracts migrants from all over India. The city offers countless employment opportunities and is
known for its interesting and high standard of living.
The city, with a population of 19 million, is also known as the Indian seat of entertainment as it
is the home to the Hindi film industry, the largest in the world.
Most of the city's inhabitants rely on public transport to commute. Transport systems in Mumbai
include the Mumbai suburban railway, also known as the lifeline of Mumbai, BEST buses, taxis
and auto
DELHI
The national capital has the second highest GDP in the country. And although it cannot rival
Mumbai in terms of contribution to the growth of the Indian economy, Delhi is no pushover. It
contributes 4.94 per cent to all-India GDP.
Connaught Place, one of India's largest financial centres, is located in the heart of Delhi. Being
an important commercial centre in South Asia, Delhi has a per capita income of Rs 78,690,
which is more than double the national average.
Delhi's key service industries, backed by as strong and well laid out infrastructure, include IT,
telecommunications, hotels, banking, media and tourism. In recent times, Delhi's manufacturing
industry has grown considerably and consumer goods industries have established manufacturing
units and headquarters in and around the capital.
Construction, power, telecommunications, health and community services, and real estate form
the backbone of Delhi's economy. The capital's retail industry is one of the fastest growing
industries in India.
Public transport in Delhi consists of buses, auto rickshaws, taxis, suburban railways and metro
rail.
KOLKUTTA
Kolkata, the capital of West Bengal, has a population of over 5 million. Like its many other
metropolitan cousins, Kolkata suffered from economic stagnation in post-independence India.
However, since 2000, the city has witnessed an economic rejuvenation, thanks to the
development of IT industry in Rajarhat in Greater Kolkata. The city's IT sector is growing at 70
per cent yearly -- twice that of the national average.
The city has seen a surge of investments in the housing infrastructure sector. Several new
projects have come up in recent times.
Some reputed companies are headquartered here. Of them, Bata India, ITC Limited, Birla
Corporation, Domodar Valley Corporation deserve special mention. Opening of the Nathu La in
Sikkim as a trade route has put Kolkata in an advantageous position.
Like other metropolitan cities of India, Kolkata continues to struggle with problems like poverty,
pollution and traffic congestion.
BANGLORE
What was knows as the Pensioners' Paradise 10 years back, has grown 10-fold today and a study
reveals that the rupee millionaire club in Karnataka's capital is the most crowded in India.
Bangalore also boasts of having the largest number of households with an annual income of Rs
10 lakh (Rs 1 million) or more.
With an estimated population of 6.5 million, Bangalore is one of India's most populous cities.
Businesses involving large corporates that are either multinational companies or Indian firms
dealing with or catering to MNCs employ a very large workforce in Bangalore.
And although the city's infrastructure has been unable to keep pace with the rapid growth of the
city, Bangalore still remains one of India's boom towns.
PUNE
The growth of this major industrial city, located roughly 150 km east of Mumbai, has become the
topic of discussion these days.
Starting from automobile majors like Tata Motors, DaimlerChrysler, Pune will soon house units
of global biggies like General Motors, Volkswagen, Fiat, et cetera. A number of important
engineering goods industries like Cummins Engines Co Ltd and Bharat Forge Ltd, electronic
goods companies like LG, Whirlpool, food companies like Frito Lay and Coca Cola are also
located here.
Of late, Pune's software industry has grown by leaps and bounds. IT parks like Rajiv Gandhi IT
Park at Hinjewadi, Magarpatta Cybercity, MIDC Software Technology Park at Talawade,
Marisoft IT Park at Kalyani Nagar are seats of technology that the city can boast of.
To meet the demands of this explosive economic growth in Pune, the state of Maharashtra is
planning a 1,000 MW power plant to exclusively cater to the need of Pune. MIDC is the lead
agency for the project.
Strengths
1. Low cost of production.
2. Large pool of installed capacities
3. Efficient technologies for large number of Generics.
4. Large pool of skilled technical manpower.
5. Increasing liberalization of government policies.
Opportunities
1. Aging of the world population.
2. Growing incomes.
3. Growing attention for health.
4. New diagnoses and new social diseases.
5. Spreading prophylactic approaches.
6. Saturation point of market is far away.
7. New therapy approaches.
8. New delivery systems.
9. Spreading attitude for soft medication (OTC drugs).
10. Spreading use of Generic Drugs.
11. Globalization
12. Easier international trading.
13. New markets are opening.
Weakness
1. Fragmentation of installed capacities.
2. Low technology level of Capital Goods of this section.
3. Non-availability of major intermediaries for bulk drugs.
4. Lack of experience to exploit efficiently the new patent regime.
5. Very low key R&D.
6. Low share of India in World Pharmaceutical Production (1.2% of world production but having
16.1% of world''s population).
7. Very low level of Biotechnology in India and also for New Drug Discovery Systems.
8. Lack of experience in International Trade.
9. Low level of strategic planning for future and also for technology forecasting.
Threats
1. Containment of rising health-care cost.
2. High Cost of discovering new products and fewer discoveries.
3. Stricter registration procedures.
4. High entry cost in newer markets.
5. High cost of sales and marketing.
6. Competition, particularly from generic products.
7. More potential new drugs and more efficient therapies.
8. Switching over form process patent to product patent.
The business development has a job profile of finding new market for exports, exploiting the
current market, expanding the market, finding new strategies for promoting drugs in the
international market. Generally MBA or postgraduates in International Business are selected for
this job profile.
The logistics department deals with actual transit of drugs. These take care of schedule of
shipment the shipping or airline by which the goods are to be sent, also production batches
according to the consignment is advised by this unit.
The regulatory affairs deal with the registration of drugs with the ministry of health or other
governing bodies of that country.
Also the dept. takes care to fulfill requirements given by various bodies like US FDA, TGA, EU,
WHO in the registration of drugs. The dept. provides technical support for registration of drugs.
This field is open students who have a strong technical knowledge. The requirements for entry
are either M.Pharm or B.Pharm.
The various courses that can be opted & the awarding institutes are as follows:
1. Indian Institutes of Management.