Inventions
Research & Development (R&D)
in Pharmaceuticals
DISCOVERY
Enzymes, receptors, & genetics,
DEVELOPMENT
Safety, quality and efficacy tests
PRODUCTION
Quality assurance
Longer than
10 years
More than
$800 m
REGISTRATION
Medical and marketing approval
MONITORING
Physician and patient satisfaction
Chronology of Drug Innovation
SOURCES/INNOVATIONS
natural products
& derivatives
serendipity
psychotropics
receptors
NSAIDS
enzymes
H2-antagonists
beta blockers
cell pharmacology/
molecular biology
genetic
engineering
lipid lowerers
ACE inhibitors
biotech drugs
penicillins
sulphonamides
aspirin
chronic degenerative
disease
associated
with aging,
inflammation
cancer
NEW THERAPEUTIC CYCLES
1900
1950
1960
1970
Source: Lehman Brother Pharmaceutical Research
1980
1990
2000
2010
2020
2030
R & D in Pharma
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
SOUTH AFRICA?
R&D: Scientific Risk
Discovery & 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
POST-MARKETING SURVEILLANCE IV
1
III
DEVELOPMENT
2
CLINICAL TEST (HUMANS)
I
2-5
5 - 10
BASIC
RESEARCH
3,000 – 10,000
II
PRECLINICAL TEST (ANIMALS)
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
15.3
16
14.2
2.3
11.6
12
2.8
YEARS
2.1
8
2.4
4
6.9
8.1
5.5
4.4
2.5
5.1
5.9
6.1
1970-79
1980-89
1990-95
3.2
0
1963-69
Preclinical Testing
Source: Tufts CSDD, NCE Database, 1995
Clinical Testing
FDA Review
Cost of Drug Development
900
800
700
$ million
600
500
400
802
300
431
459
1991
1993
1997
U of Rochester Tufts
OTA
200
100
312
136
0
1979
2001
Myers & Howe Tufts
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 Deflator.
Drug Development
Costs vs Returns: 1980’s Study
PRESENT VALUE ($1990MM)
$1,200
AVERAGE PV OF RETURNS:
$224 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 Introduction in the 1980’s.” Journal of Health Economics Vol. 13, (November 199
Innovation of the Pharmaceutical Industry
94
2
4
PATENTED BY:
Industry
Universities & Government
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
$800 million
Benefits of Pharmaceutical
Research and Development
 Prevent and treat disease
 Reduce costly
hospitalization, nursing
home stays and surgeries
 Return patients to
productive lives
Benefits of Pharmaceutical
Research and Development
 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 Drug 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