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A pharmaceutical company (or drug company) is a company licensed to discover, develop, market and distribute drugs.
History
Most large pharmaceutical companies were founded in the late 19th and early 20th century, and derive their market share from a few well-marketed preparations.
Drug development
Drug development is considered a costly and intensive process. Of all compounds investigated for use in humans only a small fraction is eventually marketed, and only after heavy investment in clinical trials to determine the safety and efficacy of a compound. The cost for a new drug is estimated to be about $1 billion. Only after rigorous study and testing will the company be granted a patent for the drug for about 20 years.
Marketing
Drugs are initially sold at a price higher than after competition is introduced. When the patent for the drug runs out, a generic is usually created by a competing company and released, causing the price to drop markedly. Drug companies spent $900 million on consumer ads in the first half of 1999 alone. Pharmaceutical companies fund non-profit "patient groups" that consume their drugs. Patient groups advertise for the drug companies, and are unregulated by the FDA.
Some medications only show to have safety issues after they are marketed, as clinical trials are of a limited size, such as the 3,000 test subjects required by the FDA. 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certain instances, its indication may need to be limited to particular patient groups, and in others the substance is withdrawn from the market completely. 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.
Not all countries allow direct-to-consumer marketing. Where this applies, pharmaceutical companies may only advertise to doctors and other health professionals. Drug companies spend $5 billion annually sending representatives to doctors' offices.
Between 1980 and 1997, drug industry funding for academic research rose x8, as research costs rose, and the rate of federal support fell. Drug researchers not employed by pharmaceutical companies often look to companies for grants, and companies often look to researchers for studies that will make their products look good. 79% of papers written by independant researchers are favorable to new drugs. 98% of papers written by researchers sponsored by the drug companies are favorable. Sponsored researchers are rewarded by drug companies by puttting them on symposium circuits to lecture, with the lecture scripts written by pharmaceutical companies. Some researchers who have tried to publish papers that show harmful effects of new drugs or cheaper alternatives have been threatened by drug companies with lawsuits.
Controversies
Recently, some large companies have received a fair share of criticism. Examples are:
- Accusations of forging or suppressing clinical trial results to maximise uptake of some medications;
- Accusations of manipulating the market for their products by showering doctors with free gifts[1].
- Too much advertising materials in the doctor's office, such as clocks, poster ads, etc.
- Aggressive representation by pharmaceutical companies' salespeople (detailmen).
- Sponsorship of medical schools, with influence on the curriculum to discourage the teaching of alternative medicines.
- Increased number of drug tests on animals before FDA approval
- Criticism for keeping the price of patented AIDS medication artificially high, limiting theraputic options for patients in the Third World, where the most people have AIDs. The patents, enforced worldwide by the World Trade Organization, bar the cheap generic manufacture of these medications, and third world countries often lack the economic resources to purchase expensive brand-name drugs from their American and European manufacturers. Pharmaceutical companies claim that lowering the price will not generate enough profits, and cannot be justified given these drugs' high development costs. Proposals to allow the manufacture generic AIDS drugs are not without controversy; it is sometimes claimed that this might cause pharmaceutical companies to move away from AIDS drug research and focus their research on other, more profitable areas. In March of 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. Eventually, the patents for the AIDS drugs will expire, allowing cheap generics on the market. By then, millions will die who could have been saved.
Bibliography
- Ray Moynihan, Alan Cassels: Selling sickness: How the world's biggest pharmaceutical companies are turning us all into patients". Nation Books, New York, 2005.
- Merrill Goozner: The $800 million pill. [2] University of California Press, Berkeley, 2004, 297 S. ISBN 0-520-23945-8.
- Marcia Angell: The truth about the drug companies. Random House, New York, 2004, 305 S. ISBN 0-375-50846-5.
See also
External Links
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