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Facts

  • Global pharmaceutical sales in 2010 topped $911bn, which equated to a growth of 2.90%.

  • In 2010, the FDA approved 88 new drugs and biologics.

  • The research-based pharmaceutical industry is one of the few remaining leading high technology industries in Europe, amounting to 17% of EU business R&D investments, and about 3.5% of the total EU manufacturing value added

  • The pharmaceutical industry invested more than 16% of total sales back into research and development.

  • Approximately 633,100 individuals are employed within the pharmaceutical industry  in Europe, including 113,400 in R&D facilities.

  • On average, 17.0% of total health expenditure in Europe is currently spent on pharmaceuticals and other medical non durables.

  • Thanks to innovations in healthcare European citizens can expect to live up to 30 years longer than they did a century ago

Pharmaceutical Companies

Companies vary from large multi-nationals, small or medium sized organisations, Biotechnology, Medical Device, Generics or Niche companies to Clinical Research Organisations (CROs). CROs are Global organisations, service providers that undertake outsourced clinical trials for pharma companies to help get a compound on to the market.  Their work includes specialist Phase I services, Pharmacokinetics/ Pharmacodynamics and Phase II –IV Services.

Typically, large pharmaceutical companies are structured in a 3-tier arrangement.  At the top and generally in the country of origin is the Holdings Company: comprising Board Members, Senior Management, Legal, Corporate Affairs and Public Relations.  Next comes the R & D company, again most often in the country of origin and comprising: Bench R & D (Chemistry, Pharmacology, Toxicology, Kinetics) and Clinical R & D (Phases I, II, III and Regulatory).  Finally, the Local Operating Company, often described as an ‘Affiliate’ and usually based in the country where the products are marketed, comprising: Marketing, Sales and Medical.

Medicines Development

Only 1 in every 5,000 products screened is approved as a new medicine and only 30% of approved and marketed drugs produce profits that cover their R & D costs.  Around 40 new medicines are approved each year and the average cost of developing a single drug, from initial discovery to approval is estimated at more than £400M.  Most drugs fail to make it to market but still incur development costs. On average it takes more than 10 years to progress through 'Phases' from initial Discovery to product approval.

The experiments and trials are different in each Phase.  Experiments from earlier Phases may continue even though a project has moved on to the next Phase. During each Phase, more is learned about the drug’s properties and there are key milestones where a pharmaceutical company decides whether to continue or stop development.

Here is a broad outline of the Phases of drug development.  Click here for a simplified diagram.

Discovery Phase

The molecular modelling of a broad spectrum of candidate drugs followed by chemical and biological screening of the best products.

New drugs begin in the laboratory with chemists, scientists and pharmacologists identifying cellular and genetic factors that play a role in specific diseases. They search for chemical and biological substances that target these biological markers. Drugs usually act on either cellular or genetic chemicals in the body, known as ‘targets,’ which are believed to be associated with disease. Scientists use a variety of techniques to identify and isolate a target and learn more about its functions and how these influence disease. Compounds are then identified that have various interactions with drug targets helpful in treatment of a specific disease.

Researchers analyse and compare each drug target to others based on their association with a specific disease and ability to regulate biological and chemical compounds in the body. Tests confirm that interactions with the drug target are associated with a desired change in the behaviour of diseased cells. A ‘lead’ compound or substance is one that is believed to have potential to treat disease. Leads are sometimes developed as collections, or libraries, of individual molecules that possess properties needed in a new drug. Testing is then done on each of these molecules to confirm its effect on the drug target.

Lead optimisation compares the properties of various lead compounds and provides information to help pharmaceutical and biotechnology companies select the compound or compounds with the greatest potential to be developed into safe and effective medicines. Often during this same stage of development, lead prioritisation studies are conducted in living organisms (in vivo) and in cells in the test tube (in vitro) to compare various lead compounds and how they are metabolized and affect the body.

Pre-Clinical Phase

Investigating a compound’s safety and pharmacology prior to assessment in humans.

During the pre-clinical development of a drug, laboratory tests document the effect of the investigational drug in living organisms (in vivo) and in cells in the test tube (in vitro). The results of preclinical testing are used to determine how to best formulate the drug for its intended clinical use. Regulatory agencies require testing that documents the characteristics - chemical composition, purity, quality and potency - of the drug's active ingredient and of the formulated drug.

Toxicology studies are conducted to identify potential risks to humans. Results of all testing must be provided to the MHRA or other appropriate regulatory agencies in other countries in order to obtain permission to begin clinical testing in humans.

Testing for

  • the likely effect on human biological systems

  • toxicology

  • evidence of safety in pharmacological screening tests

Key Activities

  • formation of a multi-disciplinary project team to manage the development of the compound

  • toxicological and pharmacological screening

  • manufacture of small amounts of the drug for testing

  • market research to establish the need for a new medicine in the therapeutic area

Timescale
10 to 18 months

Phase I

Determining the pharmacokinetic properties, safety and toleration of the drug in healthy volunteers.  Sometimes known as “1st into man studies.”

The first studies conducted in humans, a small number of subjects, usually from 20 to 100 healthy volunteers, take the investigational drug for short periods of time. Testing includes observation and careful documentation of pharmacodynamics and pharmacokinetics - how the drug acts in the body - how it is absorbed, distributed, metabolised and excreted.

Testing for

  • safety profile in humans – escalating from sub-pharmacological doses to test the safety profile

  • how the drug is absorbed, distributed, metabolised and excreted

  • food interactions, potential drug interactions

  • possible close ranges and formulations

Key Activities

  • clinical trials involving up to 100 healthy volunteers

  • manufacture of small amounts of the drug for testing and trials

  • development of appropriate dosage forms such as capsules or tablets for large scale patient trials

  • further toxological testing in parallel with clinical trials

Timescale
Around 1 year

Phase II

Determining the safety profile and investigate evidence of efficacy and dose response in target patients.

Phase II studies determine effectiveness and further study the safety of the candidate drug in humans. Depending upon the type of investigational drug and the condition it treats, this phase of development generally takes from six months up to three years. Testing is conducted with higher patient numbers suffering from the condition the investigational drug is designed to treat. This testing determines safety and effectiveness of the drug in treating the condition and establishes the minimum and maximum effective dose.

Most Phase II clinical trials are randomised or randomly divided into groups, one of which receives the investigational drug, one of which gets a placebo containing no medication and sometimes a third that receives a current standard treatment to which the new investigational drug will be compared. In addition, most Phase II studies are double-blinded, meaning that neither patients or researchers evaluating the compound know who is receiving the investigational drug or placebo.

Phase II trials are often subdivided into:

Phase IIa
First clinical studies in a small number of patients to demonstrate safety and first signs of efficacy.

Phase IIb
Initial dose-ranging efficacy trials. More extensive than Phase IIa patient studies, IIb is used to establish dose and overall efficacy/safety properties. These studies also establish the initial benefits to risk ratio. The results of these trials are used to determine the study design and dosing for Phase III trials.

Testing for

  • preliminary evidence of efficacy, safety and differentiation against gold standard treatments – proof of concept

  • biomarkers providing initial evidence of efficacy

  • optimal dose and dosage regimen

Key Activities

  • clinical trials involving larger patient groups

  • interactions with Regulatory Agencies before starting clinical trials

  • complex statistical analysis and reporting data

  • further toxological testing and development of commercial dosage forms

  • further market research and medical value research

Timescale
Around 2 years

Phase III

Proving safety and efficacy in large scale trials with determination of the risk/benefit profile to allow regulatory approval.

Phase III studies provide expanded testing of effectiveness and safety of an investigational drug, usually in randomised and blinded clinical trials. Depending upon the type of drug candidate and the condition it treats, this phase usually requires one to four years of testing. In Phase III, safety and efficacy testing is conducted with 1000s of volunteer patients suffering from the condition the investigational drug treats.

A Marketing Authorisation Application (MAA) is an application to market a new drug. Such applications document safety and efficacy of the investigational drug and contain all the information collected during the drug development process. At the conclusion of successful preclinical and clinical testing, this series of documents is submitted to MHRA or to the applicable regulatory authorities in other countries. The application must present substantial evidence that the drug will have the effect it is represented to have when people use it or under the conditions for which it is prescribed, recommended or suggested in the labeling.

Phase III trials are often subdivided into:


Phase IIIa
Expanded, controlled and uncontrolled clinical trials intended to gather additional evidence of efficacy for specific indications being studied and to better understand safety and drug related adverse effects. Trials are usually multi-centred and collect substantial safety experience and efficacy information.  They often include the Pivotal Trials which serve the basis for drug approval.

Phase IIIb
Studies conducted after the drug has been submitted for marketing approval. The purposes of these studies include differentiation from other treatments, exploring use in additional patient populations, seeking new indications for the study, or exploring AEs. Results of these studies may be used to supplement a pending application or complete earlier trials by providing additional safety data or they may test the approved drug for additional conditions for which it may prove useful.

Testing for

  • proof that the drug works against the disease in the general population showing clear advantage over existing therapies

  • confirmation of optimal dose and how often it’s given

  • further toxicology and Phase I studies

Key Activities

  • clinical trials involving 1000s of people in global studies

  • large-scale statistical analyses and reporting

  • global interactions with Regulatory Authorities

  • preparation and submission of the Regulatory Filing

  • manufacture of large amounts of expected drug formulation

  • knowledge transfer to Marketing and Manufacturing

Timescale
Around 3 years

Pivotal trials

A generic term for adequate and well-controlled Phase II and III trials which provide substantial evidence of effectiveness and safety upon which the drug is approved.

Phase IV

Commercially oriented trials conducted after the drug has been approved for marketing.

Phase IV studies expand testing of a proven drug to broader patient populations and compare the long-term effectiveness and/or cost of the drug to other marketed drugs available to treat the same condition. Study design may extend the recommended duration of treatment or they may be primarily instructive in nature to help familiarise a larger number of practitioners with the drug's efficacy and side effects.

Post-Approval Studies (Post Marketing Surveillance)

Testing a marketed drug in new age groups or patient types.

Some studies focus on previously unknown side effects or related risk factors. Clinical studies carried out by a company following market introduction to evaluate a new drug under conditions of actual medical practice. The studies may be initiated by the manufacturer to clarify why and how a new drug is used or to determine whether the adverse experience profile established in controlled trials reflects the true properties of the drug. Such studies may also be required by a regulatory health authority as a condition for approval.

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