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From Bench to Boardroom: Historical Developments in the Pharmaceutical Industry

From Bench to Boardroom: Historical Developments in the Pharmaceutical Industry

Mar 23, 2010

Historical Developments in the Pharmaceutical Industry.

Medicine has existed since the dawn of human civilization. Diseases were originally thought to be caused by deities or supernatural forces. Various ancient civilizations, from the Egyptians to the Chinese, developed their own unique systems for practicing medicine in the fields of herbalism, anatomy, public health, and clinical diagnostics1. Medicine was not practiced by physicians, but rather by the common people through observation and empiricism. The great Greek poet Homer described Egypt as a land where “the earth, the giver of grain, bears the greatest store of drugs” and where “every man is a physician”. Homer’s mythology does have some truth to it. In the famous Ebers papyrus, dating back to 1550 B.C., the ancient Egyptians describe more than 700 medicinal formulas; some were incantations and placebos that delivered their therapeutic effects through spiritual healing.

Despite the lack of scientific reasoning, some of the earlier “magical concoctions” did eventually become useful remedies with pharmacological properties that are still recognized today. The Edwin Smith Papyrus, dating back to the seventeenth century B.C.,is almost completely devoid of supernatural reasoning and details 48 medical cases in which the examinations, diagnoses, treatments, and prognoses of numerous ailments were developed through practical surgical treatments. It was not until the 19th century that the pharmaceutical industry evolved more systematic and scientific practices.

In H.P Rang’s book The Development of the Pharmaceutical Industry2, pharmaceuticals are described as having emerged from the amalgamation of modern biology, synthetic organic chemistry, and American entrepreneurship. Once science was applied to medicine, a new era of drug discovery arose, with chemistry and biology at its core.

Cell theory, or Rudolf Virchow’s biogenesis law, revolutionized biology by defining living systems in terms of functioning cellular units3. Louis Pasteur’s germ theory of disease and Robert Koch’s postulates3, which established criteria for establishing a causal relationship between a microbe and a disease, laid the foundation for infection theory and immunology. Paul Ehrlich, who is recognized as the founder of chemotherapy, studied the interaction between cells and synthetic dyes. He coined the terms “receptors” and “magic bullets”, referring to the modern day equivalent of receptor-ligand interactions in targeted drug delivery4.

Why does the history of medicine and the pharmaceutical industry continue to illuminate aspiring entrepreneurs interested in novel drug discovery? For one, several aspects of modern research and development in drug discovery have remained largely unchanged since prehistoric times5,6.

Natural therapeutic products derived from plants constitute the bulk of the chemicals used in the pharmaceutical industry5. These compounds typically have complicated molecular structures that are very difficult for even the most experienced of chemists to synthesize. Doxorubicin and paclitaxel are two examples of natural products with anticancer effects. The biosynthetic pathway that produces paclitaxel in E. coli involves several inefficient steps, making synthesis very challenging. Biologics, which includes human growth hormone, insulin, vaccines and antibiotics, is another major category of large molecules produced by living organisms. However, biogenerics are inherently more difficult to accurately replicate than conventional drugs and require more extensive clinical trials and observation, which hamper their push to market.

Synthetic chemicals make up another major portion of new drugs in the pharmaceutical pipeline7. Sulfoamide is an example of an antimicrobial drug that paved the way for the antibiotic revolution in medicine. The active molecule sulfanilamide (or sulfa) was first synthesized in 1906, and represented the only antimicrobial drug before penicillin8.

According to the 2009 Standard & Poor’s Industry Survey for the pharmaceutical market9,10, slow growth for the industry was marred by sluggish new product launches and disappointing clinical trials for a number of high-profile R&D pipelines. Patent expirations have lead to mergers between large pharmaceutical companies such as Merck & Co. Inc. and Schering-Plough Corp. Socio-political forces, including the new healthcare reform initiative, economic recession, and increased unemployment levels, may also impact the industry.

For every 5,000 pharmaceutical compounds discovered, only one ever reaches a pharmacy. Table 1 shows sales trends for a number of leading pharmaceutical companies in the United States. Through 2009, pharmaceuticals underperformed the general market, with the sub-industry down 7.8% compared to a 1.6% decline in the broader index. Global pharmaceutical sales increased by only 2.5%-3.5% in 2009, less than the predicted rate of 4.5%-5.5%. While sales growth for large pharmaceutical companies appears to be declining, patent expirations will create new market opportunities for generic medications.  Table 2 shows global pharmaceutical sales by region, and Table 3 lists major patent expirations ranked by US sales.

For scientists and entrepreneurs, perhaps the most important lesson to learn from  reviewing the pharmaceuticals industry is that it can be difficult to balance the production of efficacious and affordable drugs with the need to generate profits11,12. Finding the next breakthrough point for a drug that can sail safely from the lab bench to the corporate boardroom may not be easy, but there is definitely a future in the pharmaceutical trade, given the expiration patents on existing drugs and the need for new replacements.


Tables

Table 1: Sales in billions USD for top pharmaceutical companies in the US (2004-2008)

Company 2004 2005 2006 2007 2008
Pfizer 31.1 27.3 26.8 23.6 20.5
GSK 19.1 20.2 22.2 20.7 18.4
AstraZeneca 11.5 12.7 14.7 15.5 16.3
Johnson & Johnson 16.7 16.0 16.1 16.3 16.0
Merck 15.3 15.4 16.7 17.6 15.5
Amgen 9.6 11.9 14.5 14.3 13.4
Hoffman-La Roche 6.2 8.2 10.4 12.4 13.1
Novartis 11.5 12.9 13.9 13.9 12.4
Lilly 8.2 8.7 9.2 10.3 11.4
Sanofi-Aventis 10.2 11.2 11.0 10.9 11.0
Total, Top 10 139.4 144.5 155.5 155.5 148.0
Total, US Market 239.9 253.9 276.5 287.6 291.5
Source: Standard & Poor’s Industry Surveys Healthcare 2009: Pharmaceuticals

 

 

Table 2: Global pharmaceutical sales by region (2006-2008)

Region SALES (BIL. $USD) MARKET SHARE (%)
  2006 2007 2008 2006 2007 2008
North America 289.9 304.5 311.8 47.7 45.9 40.3
Europe 181.9 206.2 247.5 29.9 31.1 32.0
Asia, Africa, Australia 52 62.2 90.8 8.6 9.4 11.7
Japan 56.7 58.5 76.6 9.3 8.8 9.9
Latin America 27.5 32 46.5 4.5 4.8 6.0
TOTAL 607.9 663.5 773.1 100 100 100
  Source: IMS Health Inc. April 2009

 

Table 3: Major Patent Expirations in US (2009-2011)

Brand Name Company Indication 2008 Sales (Mil. $ USD)
2009      
Prevacid Takeda Ulcers, GERD 2,948
Topamax Ortho-McNeil Seizure disorders, migraine, headache 2,356
Valtrex GSK Viral infection 2,020
Adderall XR Shire Attention deficit hyper-activity disorder 1,585
Ambien CR Sanofi-Aventis Insomnia 986
2010      
Effexor XR Wyeth Depression, anxiety, panic disorder 2,791
Flomax Boehringer Ingelheim Benign prostatic hyper-trophy 1,318
Cozaar Merck High blood pressure 731
Arimidex AstraZeneca Breast cancer 617
Hyzaar Merck High blood pressure 548
2011      
Lipitor Pfizer High cholesterol 6,392
Actos Takeda Type 2 diabetes 2,569
Zyprexa Lilly Schizophrenia, bipolar disorder 1,853
Levaquin Ortho-McNeil Bacterial infections 1,719
Aricept Eisai Alzheimer’s disease 1,224
Source: Medco’s 2009 Drug Trend Report

 


References

  1. http://en.wikipedia.org/wiki/History_of_medicine
  2. The development of the pharmaceutical industry. Drug Discovery And Development: Technology In Transition, Chapter 1, H. P. Rang.
  3. Drug discovery a historical perspective, Science 287 1960-1964, 2000
  4. Paul Ehrlich: magister mundi Nature Reviews Drug Discovery 3, 797-801, 2004
  5. Modern drug use an enquiry on historical principles, Lancaster MTP Press, 1984
  6. The greatest benefit to mankind: a medical history of humanity from antiquity to the present. London: Harper Collins, 1997
  7. Drug discovery a casebook and analysis, Clifton, NJ-Humana Press, 1990
  8. Thaladomide and the power of the drug companies. Harmondsworth Penguin, 1972
  9. Standard & Poor’s Industry Surveys Biotechnology, Steven Silver, August 13, 2009
  10. Standard & Poor’s Industry Surveys Healthcare: Pharmaceuticals, Herman Saftlas, June 4, 2009
  11. In quest of tomorrow’s medicines, New York Springer, 2003
  12. Pharmaceutical innovation: recent trends, future prospects, Report No 74 London, Office of Health Economics, 1983

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