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International Federation of Pharmaceutical Manufacturers & Associations



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  • Innovation in public health is a complex, laborious, uncertain and fragile process that requires a multidisciplinary approach and a diversity of stakeholders
  • A successful pharmaceutical R&D process is one that minimizes the time and cost needed to bring a compound from the scientific “idea”, through discovery and clinical development, to final regulatory approval and delivery to the patient
  • R&D costs are rising as regulators require more and bigger clinical trials to meet more stringent safety requirements.

Background

Pharmaceutical innovation is a complex creative process that encompasses far more than pharmaceutical R&D alone. Innovation is the result of knowledge, its application and the harnessing of creativity through management expertise. It is the process of discovering, developing and bringing to clinical use new medicinal products that extend or improve the lives of patients. A successful pharmaceutical R&D process is one that minimizes the time and cost needed to bring a compound from the scientific ‘idea’, through discovery and clinical development, to final regulatory approval and delivery to the patient.

Pharmaceutical companies generate innovation in health care by inventing and developing new treatments for previously untreated health problems (radical innovation) and also developing improved versions of existing medicines or new indications for them e.g. to treat diseases other than those for which the medicines were originally invented (incremental innovation). Often underestimated, these incremental innovations significantly improve health and quality of life, by providing patients with more choice, better risk tolerance, easier dosing and administration, as well as fewer side effects.

Modern pharmaceutical R&D is characterized by ever increasing magnitude, complexity and scale. Researchers face an increasingly demanding clinical and regulatory environment. They are confronting complex diseases (such as Alzheimer’s, cancer and HIV/AIDS) that require much more basic research to identify novel treatment targets. Moreover, recent advances in science and technology have contributed to the emergence of powerful new research tools such as nanotechnology, pharmacogenomics, high-throughput screening and combinatorial chemistry, which make pharmaceutical innovation both more promising and more challenging than before. It is also increasingly complex and expensive, requiring more extensive collaboration.

The cost of bringing a new medicine to market is rising, not falling. Since 2000, US pharmaceutical manufacturers have increased their R&D budgets by roughly 55 percent, from $26 billion to almost USD 40 billion in 2005, of which they invested more than $10 million in preclinical studies (25% of total R&D spending) and $17.2 billion in clinical trials (43% of R&D spending) . It should be noted that R&D costs vary widely from one new medicine to the next. Those costs depend on the type of medicine being developed, the likelihood of failure, and whether the medicine is based on a molecule not used before in any pharmaceutical product (a new molecular entity, or NME), rather than an incremental modification of an existing medicine.

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