The Pharmaceutical Industry and the

Future of Drug Development

David Taylor

The pharmaceutical industry has a number of unusual characteristics, both in its

structure and in the nature of its business operations, which are little known outside
the industry but which materially affect the process of bringing new pharmaceuticals
to the patient. The development of a new pharmaceutical is very time consuming,
extremely costly and high risk, with very little chance of a successful outcome. The
process of research and development is described, together with all its challenges,
including environmental ones. The commercial realities and constraints of the
business, together with its current problems, are discussed, followed by an
exploration of some of the likely future commercial and technical developments in
the business, including the development of a greener pharmacy.

1 Introduction

The pharmaceutical industry has a number of unusual characteristics that make it

very different from what people normally think of as industry. It is also an industry
replete with contradictions; for example, despite the undisputed fact that for over a
century the industry has made a major contribution to human wellbeing and the
reduction of ill health and suffering, it is still regularly identified by the public in
opinion surveys as one of the least trusted industries, often being compared
unfavourably to the nuclear industry. It is undoubtedly one of the riskiest businesses
in which to invest money, yet it is perceived by the general public to be excessively
profitable. The major pharma companies rightly promote themselves as being
research-based organisations, yet most people believe that they spend more on
marketing than on research.1,2 Despite the acknowledged risks and costs associated
with pharmaceutical development, many citizens still believe that pharmaceuticals
should be being developed to meet all human needs and that when developed they
should be given away to everyone on the basis of need.
This opening chapter aims to provide a basic understanding of how the industry
works and attempts to provide an explanation for some of its contradictions. The
objective is to provide a backdrop to the business so that the challenges of the issue
of pharmaceuticals in the environment can be better understood.
Note that the words “medicine,” “pharmaceutical” and “drug” are often used
interchangeably and the word “drug” can also mean both a medicine and an illegal
substance, depending on the context. In this chapter the word “pharmaceutical” is
arbitrarily assigned to the end-products of the pharmaceutical industry that are used
by patients. The word “drug” is mainly used for potential pharmaceuticals whilst
under development by the industry.

1.1 Historical Background

Human beings have been using “drugs” to treat illness and disease for more than
3000 years. A few dozen drugs of plant and animal origin were already recorded in
China around 1100 BCE and by the end of the 16th century the Chinese were using
at least 1900 different remedies.3 Today Traditional Chinese Medicine recognises
more than 13 000 drugs.
Outside China, the first known pharmacopeia, the five volumes of De Material
Medica, were written in the first century CE by Dioscorides, a Greek botanist. 4 Herbal
practitioners of this early period have been identified in many indigenous populations
across the globe, such as North and South America,5 India6 and Australia.7 In the
later mediaeval period, herbalism flourished in both the Islamic 8 and Christian parts
of the world.9 This tradition continued up to the 17th century, encompassing the work
of Paracelsus10 in Switzerland and Culpepper11 in England. Culpepper's work, The
English Physician, published in 1652, was one of the first English language
pharmacopeias.12
Until the 18th century the use of herbal medicines had been entirely based on
empiricism: practitioners knew what worked but not why or how. However, in the late
18th century the foundations of pharmacology, the study of the actions of drugs and
how they exert their effects, began to emerge. William Withering 13 in the 1780s was
one of the first people to study and isolate the active ingredient in a herbal remedy.
He isolated digitalis from the foxglove, describing its extraction from various parts of
the plant, its subsequent effects and the optimum way of using it to treat patients.
The science of pharmacology developed slowly during the next century and Oswald
Schmiedeberg (1838–1921) is now generally recognised as the founder of modern
pharmacology.14 In 1872 he became professor of pharmacology at the University of
Strassburg in Austria where he studied the pharmacology of chloroform and chloral
hydrate and in 1878 published the classic text, Outline of Pharmacology.
Coincidentally, modern organic chemistry also began to emerge at around the
same time as pharmacology. Before the 19th century, chemists had generally
believed that compounds obtained from living organisms were endowed with a “vital
force” that distinguished them from inorganic compounds. However, in 1828
Friedrich Wöhler produced the organic chemical urea, a constituent of urine, from the
entirely inorganic compound, ammonium cyanate. Although Wöhler was always
cautious about claiming that he had disproved the theory of vital force, this event has
often been thought of as the starting point of organic chemistry. 15 These two
scientific developments in pharmacology and organic chemistry led, amongst other
developments, to the foundation of the pharmaceutical industry in the last decade of
the 19th century.
The modern pharmaceutical industry can trace its origin to two main sources:
companies such as Merck, Eli Lilly and Roche that had previously supplied natural
products such as morphine, quinine and strychnine, moved into large-scale
production of drugs in the middle of the 19th century, whilst newly established
dyestuff and chemical companies, such as Bayer, ICI, Pfizer & Sandoz, established
research labs and discovered medical applications for their products. Nevertheless,
growth was relatively modest and at the start of the 1930s most medicines were still
sold without a prescription. Almost half of them were compounded locally by
pharmacists and in many cases physicians themselves dispensed medicines directly
to their patients.
 However, a number of major advances were made in the early part of the 20th
century. Salicylic acid, a natural constituent of willow bark, had been recorded by
Hippocrates as having analgesic properties. In 1897, scientists at Bayer
demonstrated that a chemically modified version of salicylic acid had much improved
efficacy and the product, aspirin, is still in widespread use today. 16 In the 1920s and
1930s both penicillin and insulin were identified and manufactured, albeit at a
modest scale. The Second World War provided a major stimulus to the developing
industry, with requirements for the large-scale manufacture of analgesics and
antibiotics and increasing demands from governments to undertake research to
identify treatments for a wide range of conditions. After the war, the implementation
of state healthcare systems in Europe, such as the UK's National Health Service
(NHS),17 created a much more stable market, both for the prescription of drugs and,
much more importantly, their reimbursement. This produced a major incentive for
further commercial investment in research, development and manufacture. This
greater role for the state was paralleled on both sides of the Atlantic, with increasing
government regulation of medicine production.
The post-war period from the 1950s to the 1990s saw major advances in drug
development with the introduction of new antibiotics, new analgesics, such as
acetaminophen and ibuprofen, and complete new classes of pharmaceuticals such
as oral contraceptives, ßig;-blockers, ACE inhibitors, benzodiazepines and a wide
range of novel anti-cancer medicines.
The thalidomide scandal of 196118 triggered a complete reassessment of state
controls on the industry. New regulations now demanded proof of efficacy, purity and
safety, with the latter leading to a massive increase in the requirements and costs of
research and development, particularly in the clinical testing of new drugs. 19 As the
barriers to entry in drug production were raised, a great deal of consolidation
occurred in the industry. Likewise, the processes of globalisation, which had begun
before the war, increased. This resulted in new drug development being dominated
by a small number of very large multi-national companies and the beginning of the
era of the “blockbuster” drug.
 In 1977, Tagamet, an ulcer medication, became the first ever blockbuster
pharmaceutical, earning its manufacturers, GSK, more than US$ 1 billion a year and
its creators the Nobel Prize. This was followed by a succession of products, each
seemingly more successful than its predecessors. Prozac, the first selective
serotonin re-uptake inhibitor (SSRI) was launched by Eli Lilly in 1987 and
omeprazole, the first proton pump inhibitor (PPI), was introduced by Astra in 1989.
Atorvastatin, marketed as Lipitor in 1996, became the world's best-selling drug of all
time, with more than US$ 125 billion in sales over approximately 15 years.
This was probably the golden age for the industry, with research producing an
apparently endless stream of increasingly successful and profitable products; since
then, the industry has been beset by a series of major problems, many of which have
yet to be solved.

1.2 What is a Pharmaceutical?

This may seem an odd question since we all surely know what a pharmaceutical is.
However, there is no straightforward scientific answer to this apparently simple
question. Pharmaceuticals are not a class of substances like phthalates or PCBs.
They have no chemical, physical, structural or biological similarities. There is thus no
scientific justification for treating pharmaceuticals collectively as a coherent set of
chemical substances.
Pharmaceuticals are often thought of as being complex chemical structures but
they can also be simple aromatic molecules like the anaesthetic, propofol (2,6-
diisopropylphenol), simple aliphatic molecules like the vasodilator, nitroglycerine
(1,2,3-trinitroxypropane), or more complex but still relatively low molecular weight
molecules like the statin, atorvastatin (MW 558.6) ((3R, 5R)-7-[2-(4-fluorophenyl)-3-
phenyl-4-(phenylcarbamoyl)-5-propan-2-ylpyrrol-1-yl]-3,5-dihydroxyheptanoic acid).
Increasingly, new pharmaceuticals are likely to be very high molecular weight
biopharmaceuticals such as insulin (MW 5800 Da).
In fact, the only common factor which unites pharmaceuticals is their use;
substances that we identify as pharmaceuticals are simply those substances that we
use as human (or animal) medicines. This means that, in principle, any substance
might be identified, at some point, as a pharmaceutical.
Not surprisingly therefore, many pharmaceuticals are also used for non-
pharmaceutical purposes. For example, the vasodilation properties of nitroglycerine
were only discovered by William Murrell20 after its invention by Alfred Nobel as the
active constituent of dynamite. Similarly, the discoverers of warfarin ((R,S)-4-
hydroxy-3-(3-oxo-1-phenylbutyl)-2H-chromen-2-one) at the University of Wisconsin
in 194821 would be amazed that at the beginning of the 21st century this rat poison is
still the most frequently prescribed anticoagulant in the world. This is not just a
historical oddity. The most recent example is dimethylfumarate, which has widely
been used as a mould inhibitor. It is interesting to note that a year after the European
Union applied the new REACH regulation to impose severe restrictions on its use as
a mould inhibitor,22 dimethylfumarate under its trade name, Tecfidera, was granted a
pharmaceutical marketing authorisation in 2013 for use against multiple
sclerosis.23 In other words, the global inventory of chemical substances can be
divided into two groups: pharmaceuticals and those substances for which no
pharmaceutical use has yet been identified, e.g. before 2013 dimethylfumarate was
not a pharmaceutical, however, after 2013 it was.
Many commentators seem to believe that pharmaceuticals should be subjected to
different regulatory treatment because they are “designed to be biologically
active”,24 with the implication that this criterion is sufficient to differentiate
pharmaceuticals from other substances. However, this is incorrect, being derived
from a misunderstanding about pharmaceutical development and it wrongly implies
that pharmaceuticals are uniquely biologically active by design. It would be more
appropriate to say that pharmaceuticals are selected from the many substances that
produce a specific effect in animals, including humans, based on their overall safety.
The majority of pharmaceuticals are initially discovered using high-throughput
screening techniques capable of screening >100 000 compounds day −1, applied to
chemical “libraries” containing several million compounds. 25 The vast majority of
chemicals are known to exhibit some biological activity, so the screening assay is
designed to identify only those substances that exhibit the specific biological activity
of interest. It is not unusual for this initial screening step to generate several hundred
potential leads which then need to be refined down to 1 or 2 candidates for further
investigation. All these initial potential leads exhibit the relevant biological activity but
this may be accompanied by other less-welcome toxicological properties which must
be ruthlessly screened out of the selected set during the refining period. Thus the
final candidate(s) will have the desired biological activity, but few or no undesirable
properties; the purpose of the refining process is to eliminate those compounds with
worse toxicological profiles, many of which may already exist in the environment.
Thus, from an environmental risk assessment perspective, pharmaceuticals are
indistinguishable from any other chemical. They are but one class of the myriad
numbers of micro contaminants that emerged at the end of the 20th century due to
major improvements in analytical science. However, from a risk-management point
of view, pharmaceuticals as a group do need to be treated differently due to their
major direct impact on human health and wellbeing. 26 Pharmaceuticals do not pose
any more risks to man and the environment than other chemicals, but the risk/benefit
calculations may be very different.
Finally, it is worth mentioning the way in which pharmaceuticals are named, as this
can be a source of confusion. Pharmaceuticals, as chemical substances, all have
systematic IUPAC chemical names to describe their molecular structure. However,
although useful to the synthetic chemist, these long and cumbersome names are
poorly suited to either the description of experimental work or for use in a marketing
context. For example, it is clearly much simpler to describe something as warfarin
rather than use its systematic name (R,S)-4-hydroxy-3-(3-oxo-1-phenylbutyl)-2H-
chromen-2-one. Consequently, during its life cycle the same drug will be described in
several different ways. Initially, as it makes its way down the development pathway,
the substance will be given a unique reference code, e.g. Sanofi has a series of
codes such as SAR391786 and SAR438037 to identify substances in their R&D
pipeline.27 This convention is primarily for simplicity, but it also has the advantage of
hiding any structural information about the compound from competitors.
As the drug progresses through clinical trials it will acquire a generic name, which
describes the active ingredient. Initially such names were often simple contractions
of the systematic name, but in 1953 the World Health Organisation (WHO) created
the international non-proprietary name (INN) system 28 to bring some order into the
nomenclature. Although there has been a major improvement in generic naming,
there are, however, still instances where an active ingredient has acquired more than
one generic name from different parts of the world. For example, N-(4-
hydroxyphenyl)-ethanamide is known as acetaminophen in the USA and Japan but
as paracetamol in the rest of the world. Today, the generic name of a drug will be
created from descriptors that classify the drugs into different categories and also
separate drugs within categories. The generic name is widely used in the scientific
literature and the medical profession since it represents the specific active ingredient
whereas the “common” name, by which the drug will usually be known to the public,
is the company trade name.
A drug is usually given a trade name during the later stages of its clinical trials as
the marketing strategy for the product begins to be developed. The trade name will
be protected as a trademark, it relates only to the specific company product and will
have been designed with marketing of the drug in mind. For example, Novartis
market the ßig;-blocker, metoprolol, as Lopressor since it is effective at lowering
blood pressure. Once a drug is out of patent the same active ingredient may acquire
a large number of different trade names, which can cause additional confusion, e.g.
acetaminophen (paracetamol) is marketed as both panadol and tylenol (and has
>100 other trade names in different parts of the world).

1.3 Environmental Impact

Until the late 1990s the environmental impact of the pharmaceutical industry was
universally considered to be insignificant. Any environmental impact was considered
to arise solely from manufacturing facilities and, since these were relatively small in
size with well-controlled emissions, environmental impacts were not considered to be
a problem. It was appreciated that the pharmaceutical products themselves were
biologically active, but in view of the small quantities being manufactured and the
high cost of production, releases of the active product to the environment from
manufacturing were expected to be very small.
However, the discovery of pharmaceutical residues in surface waters from 1994
onwards led to this view being revised. Although the presence of pharmaceutical
residues in surface waters had been predicted by Richardson and Bowron in the
mid-1980s,29 it was not for another decade until such residues began to be routinely
measured following the identification in 1994 of clofibric acid in German rivers by
Stan and his colleagues.30 Residues have now been found in ground waters,
estuarine and coastal waters and rivers, and some compounds have also been
detected in drinking water. Low concentrations of pharmaceuticals in surface waters
are now thought to be ubiquitous, although they are rarely found >0.1 µg l −1 and are
frequently <0.01 µg l−1.31 Concentrations in wastewaters are usually in the few µg
l−1 range but in some cases much higher values have been reported. 32–35
We now know that pharmaceuticals can enter the environment in three different
ways: in effluents discharged from manufacturing sites, from the disposal of unused
and life-expired medicines, and via excretion from patients undergoing treatment.
Detailed quantification for any individual pharmaceutical is difficult, but there is
general agreement that the latter source dominates the global environmental input,
with effluent discharges and the disposal of unused medicines making relatively
small contributions.36,37 Relatively high local concentrations can occur adjacent to
discharges from industry, particularly in developing countries, 32,35 and from
hospitals.34
Most scientists, in academia, governments, regulatory bodies and industry, that
have evaluated the published data have concluded that there appear to be no
appreciable acute aquatic life effects due to pharmaceuticals in the environment. 38 In
other words, short-term immediate damage to the environment is very unlikely.
However, work continues on evaluating potential chronic effects in order to refine
these assessments. This emphatically does not mean that all pharmaceuticals are
benign as far as their environmental impact is concerned. The devastating impact of
diclofenac on the Asian vulture39 and the implication of EE2 in the feminisation of
fish40 are clear examples that this is not the case. However, pharmaceuticals should
be considered on a case-by-case basis according to their individual properties, not
as a coherent group of substances.
One area of focused effort concerns certain hormones because they are
potentially a class of compounds with observable effects at environmentally relevant
concentrations. However, as research accumulates it is becoming clear that
hormonally active compounds do not all have similar properties and this confirms the
view that such medicines need to be considered on a case-by-case basis rather than
as a single class. Scientific knowledge of the potential long-term effects of
pharmaceuticals in the environment on plants and wildlife is still in the early stages of
development and is an area of active research.
The other area of major concern is that of antibiotic resistance. 41 Antibiotic
resistance is a serious and growing phenomenon in contemporary medicine and has
emerged as one of the pre-eminent public health concerns of the 21st century. An
increasing number of pathogenic bacteria have developed resistance to commonly
used antibiotics, e.g. MRSA (methicillin-resistant staphylococcus aureus) which has
now produced an epidemic of community-acquired MRSA. 42 There continues to be
concern that the release of antibiotics into the environment might be contributing to
the growth of antibiotic resistance. However, there is, at present, relatively little
empirical evidence to support this hypothesis, 43,44 although this remains a very active
area of research.45

2 The Pharmaceutical Industries

As far as most people are concerned, the Pharmaceutical Industry consists of a

small number of very large multinational corporations with household names such as
AstraZeneca, GlaxoSmithKline (GSK), Eli Lilly, Merck, Novartis, Roche and Pfizer.
These companies are collectively known as Big Pharma, a phrase that is intended to
be prejudicial.46 However, this is very misleading. If you ask a member of the public if
they have heard of Teva or Mylan there is a high probability that they will have never
heard of either of them, despite the fact that Teva is the 11th largest pharmaceutical
company in the world47 and may very well be supplying the medicine that they are
currently taking.
The pharmaceutical industry in some ways resembles an iceberg. These very well-
known companies, which are loosely defined as research-based pharma companies,
represent ca. 40% of the market in terms of finance;47 however, they correspond to
only a small fraction of the industry as a whole, with >90% of pharmaceutical
companies, known as generic companies, being largely invisible to the general
public. In turn, these generic companies produce the vast majority of all
pharmaceuticals sold. In 2013 84% of the 4000 million prescriptions issued in the
USA were filled by generics.48
This asymmetric situation is caused by the patents system: the large research
pharmaceutical companies invest many billions of dollars searching for new
drugs.49,50 The majority of the candidate drugs never make it to the market place
because, during development, the drug is found not to work or to have serious side
effects that mean it can never be used in patients. However, a small number of new
pharmaceuticals do enter the market each year and the patent system ensures that
for a limited period of time the innovating company retains exclusive rights to sell the
pharmaceutical. When the patent expires anyone is free to manufacture and sell
what is now termed a “generic pharmaceutical”. The majority of pharmaceuticals, i.e.
all those that are out of patent, are therefore manufactured and sold by the generic
pharmaceutical companies. Generic pharmaceutical companies never have an
unsuccessful product, whereas the research pharmaceutical companies rarely have
a successful one. This has a major effect on the profile of the business, the way in
which companies are structured and the way in which they operate.
Generic pharmaceutical companies are low-cost, low-margin and low-risk
businesses. The products that they choose to manufacture and sell have already
been shown to be valuable and commercially successful in the market place.
Generic companies do not need to incur any research and development costs,
although some of the larger companies do undertake process-orientated R&D in
order to introduce more efficient, and lower cost, manufacturing. Although
manufacturing in the industry is highly regulated, product volumes are small and
manufacturing costs are relatively low. Marketing costs are also very low since the
products are already well established in the marketplace and the demand is well
understood. In many ways, generic pharmaceutical companies are in commodity
markets where competitive differentiation is based on cost of goods and profitability
is determined by market share.
The research pharmaceutical companies operate under a completely different
business model. It is these innovative companies that bring the new pharmaceuticals
to the market. This is very expensive, time consuming, and involves extremely high
risks. Research and development in the pharmaceutical industry is very expensive,
but it is the development activity that dominates the costs, particularly in the clinical
trials which follow the pre-clinical development.
Research into ill health and disease can sometimes identify targets where
chemical intervention could generate positive outcomes. High-throughput screening
and other techniques can then be used to identify possible substances that might be
suitable candidate drugs. The most likely candidate(s) then move from research into
development. This not only involves the major issues of determining whether the
candidate drug works satisfactorily (efficacy) but also whether it causes any
significant side effects (safety). It is also necessary to investigate whether the active
substance can be delivered to the patient satisfactorily, i.e. can the substance be
turned into a useable drug?
The success rate though this development phase is extremely low: <1% of
candidate drugs eventually end up in the pharmacy. This rate is continuing to
deteriorate as regulatory requirements increase and people, both inside and outside
the industry, become increasingly risk averse.

3 Research, Discovery and Development

We saw in Section 1.2 that almost any substance has the potential to find use as a
pharmaceutical, but how do we know which ones to use? In the days of the herbalist
and apothecaries, knowledge was derived from simple empiricism, substances were
used when they had been shown to work, and such valuable information was passed
on in oral tradition until documentation became available. However, although at the
beginning of the 21st century we have far more knowledge than the first century
herbalists had, the process of identifying new drugs is, at least in principle, very
similar. The following recent quote from a medicinal chemist† is apposite:51
“In medicinal chemistry we’re still fundamentally an observational science. (That
should have been obvious given how little math any of us need to know). We have
broad theories, trends, rules of thumb – but none of it is enough to help us very
much, and we’re constantly surprised by our data. That can be enjoyable, if you
have the right personality type, but it sure isn’t restful, and a lot of the time it isn’t
very profitable, either”.

The following section provides a simplified overview of the process involved in

developing a new pharmaceutical. In view of the low success rate, the R&D
departments of research pharmaceutical companies will not just be investigating one
drug but, at any one time, will be looking at many different substances at varying
points in the development cycle. A large company may have 100–200 substances
going through its development pipeline at any one time. 52

3.1 Pre-clinical Trials

Identifying a new drug starts with research into the particular illness or disease of
interest. This can be being undertaken within the research laboratories of the
pharmaceutical company but may also be being carried out in academia,
government research organisations, small “boutique” pharmaceutical companies or
any combination of these. Medical research is now so complex that large
pharmaceutical companies currently undertake most of their research in combination
with partners.
In those situations where the research identifies a specific receptor or target within
the body which could deliver beneficial effects, the search can begin for a potential
drug. The target can be a wide variety of things: a particular cell type, enzyme, gene,
pathway or process. It is estimated that more than 500 targets are currently under
investigation in the research pharmaceutical companies.
Once a target has been selected, the next step is to identify any substances that
might have some sort of regulating effect on it. Advances in automated chemical
synthesis techniques, such as combinatorial chemistry, have enabled chemical
libraries to expand rapidly. Aurora Fine Chemicals, 53 for example, has a compound
library containing >18 million substances and a compound library for a
pharmaceutical company will now typically contain samples of 1–2 million different
substances.
The search for a likely candidate drug within these vast chemical libraries has
been simplified in the 20th century by the introduction of high-throughput screening
techniques (HTS) which use advances in robotics, automation, miniaturisation and
data handling.54 In these techniques automated equipment can be used to apply
simple biochemical assays to very large numbers of chemicals in a short period of
time: throughput can range from 50 000 to 100 000 samples a day. Developments in
ultra-high-throughput screening (UHTS) since 2010 now make assay rates of 1 000 
000 samples a day possible. Screening usually takes place in several stages. Initially
a simple assay is used to pre-screen a very large number of samples, potentially the
complete library, although a more clearly defined sub-set is often used.
Subsequently a more complex assay will be used to refine the initial group, which
might contain several hundred compounds, down to a more manageable number,
usually <10. HTS/UHTS techniques can also now be used to provide initial
pharmacokinetic information on absorption, distribution, metabolism and excretion
(ADME). Guiguemde and colleagues have provided a useful review of the
application of these techniques in the search for candidate drugs to cure or alleviate
malaria.55 The outcome of this activity is the identification of a small number of
substances that might lead to a candidate drug and eventually to a useable
pharmaceutical.
This “Lead Identification” is the second major stage of the R&D process, following
“Target Selection”, and marks the transition from research into development.
Although there is probably a further 10 years of development work needed before a
drug could be submitted for marketing authorisation, it is at this point that the drug is
likely to be patented. The R&D costs up to this point will have been relatively modest
at a few million US$, but beyond this point costs escalate rapidly and the business
needs to protect its investment.
 The next step in the process, “Lead Optimisation”, endeavours to reduce the
number of potential leads from ca. 10–15 down to 3–4 substances. At the same time,
attempts will be made to modify the molecular structure in various ways in the hope
of increasing the efficacy whilst simultaneously decreasing any potential side effects.
This sounds simple but will usually take 2–3 years of detailed pre-clinical
experimentation using in silico, in vitro and in vivo techniques. During this period,
work will also have commenced on the design of the process chemistry that will
initially be used to manufacture trial batches of the substances (the active
ingredients) for use in the subsequent clinical trials and eventually for full-scale
manufacture.
In parallel, work will begin on the potential “druggability” 56 of these substances, i.e.
can the active ingredient be converted into a form that could be taken by a patient
such that the substance can interact with the target. This is by no means a
straightforward task. The ideal pharmaceutical from the perspective of the patient is
a tablet taken once a day. Any departure from this ideal has an adverse impact on
adherence, i.e. the likelihood that the patent will actually adhere to the treatment
regime. However, if, for example, you need the pharmaceutical to be absorbed in the
intestine, you have to ensure that it is able to pass though the highly acidic
conditions in the stomach without being degraded, which can be a challenging
problem.57
At the end of all this activity it is possible that a candidate drug, and potentially a
reserve candidate, will have emerged. The reserve candidate is usually the second
best candidate to emerge at this point and is the one that can be taken forward
rapidly to replace the lead candidate should any unexpected problems arise during
the clinical trials.

3.2 Clinical Trials

At this point a decision is needed as to whether to take the candidate forward into
clinical development, where the costs will again rapidly escalate still further. Although
informed by advice from the scientific team, this is primarily a commercial decision.
In parallel with the scientific activities, a considerable amount of additional work will
have been undertaken to assess the commercial potential of the candidate. Have
any negative indications appeared during the pre-clinical development? How good is
the drug at meeting the medical criteria? Are there any significant remaining
challenges in formulation or manufacturing? How secure is the intellectual property?
What is the current competitive situation? What is known about future competition?
How large is the target market? And crucially, what is the likely sale price, etc. etc.?
Provided that these questions can be answered satisfactorily, the candidate then
moves on to the first phase of clinical trials.
Clinical trials take place in four distinct phases, the first three before the drug is
marketed and the fourth phase begins when the pharmaceutical is prescribed for the
first time and continues for the lifetime of the product.
Clinical trials are intended to provide answers to two essential questions in the
development of a new drug: (a) does the drug work? and (b) if it does, is it safe for
the patent to take? However, in many cases, even at the large scale that some of
these trials are undertaken, the answer to these questions may not be clear-cut.
Many people assume that in a clinical trial all (or at least a majority) of the patients
given the treatment will get better, but this is a rare occurrence. We know that not all
patients react in the same way to a drug, although we rarely know precisely why.
One example where we do know the reason is the breast cancer drug trastuzumab
(marketed as herceptin),58 which only has beneficial effects in those patients with a
specific gene; it is of no benefit to all the others. Fortunately, this fact is known and
there is a diagnostic test to identify those patients who will benefit. Otherwise we
would be in the situation that pertains for many pharmaceuticals that they only work
in some patients. For this reason, amongst many others, the results of a clinical trial
usually require advanced statistical techniques for their interpretation.
Clinical trials are also beset with a wide range of practical 59 and ethical60 problems.
Every trial must be approved by an ethics committee and all patients must give their
prior informed consent to participate. In order to eliminate observer bias, in patients,
administrators and doctors, all trials will be blinded (i.e. the patients receiving
medication will be unaware of whether they are part of the trial group or the control
group) and many trials are now double blind (i.e. neither patient, nurse nor physician
will be aware of this information). All clinical trials undertaken for the purpose of drug
registration must be subject to good clinical practice (GCP) guidelines. 61
A candidate drug will take from six to ten years to complete the first three phases
of clinical trials. The time taken is determined by the duration of the disease that is
being treated and by the extended time that it can sometimes take to assemble
sufficient patients for the trial.
Phase 1 trials are to confirm that the results derived from the in silico, in
vitro and in vivo trials in experimental animals are replicated in human subjects.
Small numbers (10–15) of healthy human volunteers are exposed to very low
amounts of the candidate drug for short periods under carefully controlled and
monitored conditions. Data from the trial are compared with data from the pre-clinical
studies to ensure that the drug is working as anticipated. These studies are “first time
in man” experiments and, despite the care and preparation taken, the unexpected
can happen. One of the best-known examples is the recognition that sildenafil, a
drug under development by Pfizer to treat hypertension, subsequently marketed as
viagra, had a notable impact on male erectile dysfunction. 62 However, in some rare
cases the consequences can also be severely adverse. 63
If all has gone according to plan in Phase 1, Phase 2 trials can begin, the primary
purpose of which is to establish whether the drug works, i.e. is it effective against the
target disease? In addition, further information on pharmacodynamics and safety is
collected. These trials are larger (100–300) and now involve patients with the illness
concerned.
In Phase 3 trials, the treatment is then given to much larger groups of patients
(1000–3000) in order to confirm its effectiveness, monitor any side effects, compare
it to commonly used treatments and collect information that will allow it to be used
safely. Despite the vast amount of information that has been generated on the
candidate drug before it enters its Phase 3 trials, many drugs fail at this point, with
some analysts estimating the failure rate to be as high as 30%.
This is the first time that the drug will have been given to a large number of
patients and only now will low-frequency side effects begin to appear. Even a
serious, potentially life-threatening, side effect that appears in less than 1 in 100
people will not have been identified previously. 64 In addition, the higher level of
statistical power in the Phase 3 trial may also demonstrate that the drug has, in fact,
little if any efficacy.65 In fact, frequently the drug doesn’t work or works much less
effectively than originally predicted or only works on a sub-set of the population. This
information is itself immensely valuable in furthering our knowledge and without this
detailed empirical evidence pharmacology would revert to merely anecdotal
observation which, in turn, would ensure that future developments in pharmacology
would be delayed.
Failures of drug candidates at this late stage in the process are, of course, bad
news for the business; by this point a very large amount of money, time and
research effort will have been invested, all of which will have been to no avail. The
impact on the morale of the research team should also not be forgotten; it is not
unusual for a medicinal chemist, for example, to have spent his/her whole career in
the industry and to have never worked on a successful product. As a consequence,
the industry has devoted considerable efforts in the last few decades to address this
problem of late-stage attrition.66 The result is that more and more promising drug
candidates are terminated early in the process, at the first sign of any potential
problem, which history tells us may have led to the unnecessary elimination of many
potentially successful drugs. For example, neither aspirin nor penicillin would have
made it to the market under today's industry drug-development regimes.
People are frequently surprised that drug development takes such a long time.
Approximately 10 years is likely to elapse between the news media articles that
“scientists have discovered a cure for X” and patients actually receiving the
medication, even if the development is successful. The reason is that it actually
takes this amount of time and the extensive clinical trial procedures involved to
discover if the treatment will actually work. However, this raises ethical issues,
particularly with life-threatening diseases where patients and their doctors are
desperate to try any new treatment as soon as possible. This becomes a challenge
when it seems clear from early trial data that the drug may have significant beneficial
outcomes, but by the time a marketing authorisation is approved many potential
patients will be dead. Consequently a number of regulatory programmes 67 now exist
to provide “expanded access” or “compassionate access” to patients with serious or
life-threatening conditions who do not meet the enrolment criteria for the clinical trial
in progress when it is clear that patients may benefit from the treatment, that the
therapy can be given safely outside the clinical trial setting, that no other alternative
therapy is available, and the drug developer agrees to provide access to the drug.
These programmes are, however, carefully managed so that the body of clinical trial
data itself is not compromised. However, there is increasing demand for wider and
more rapid access to unproven therapies where the need is severe. 68
A successful conclusion of the phase 3 trials enables the innovating company to
assemble all the relevant data on the candidate drug for submission as an
application for a marketing authorisation to the appropriate regulatory body, e.g. the
Federal Drug Administration (FDA) in the United States and the European Medicines
Agency (EMA) in the European Union. Assuming that the application is successful,
the pharmaceutical, with its trade name, will be launched on the market and start to
be prescribed to patients. It is at this point that phase 4 of the clinical trial process
begins.
Phase 4 relates to the on-going safety surveillance and technical support of the
pharmaceutical. The safety surveillance, usually known as pharmacovigilance, is
designed to detect any rare or long-term adverse effects over a much larger patient
population and longer time period than was possible during the phase 1–3 clinical
trials. In some instances pharmacovigilance regimes will be required by the regulator
as part of the marketing authorisation; in other cases they will be being undertaken
by the innovating company for further research into new applications for the
pharmaceutical. It is relatively unusual for serious harmful effects to be discovered
during these phase 4 trials but in some cases the data may result in a
pharmaceutical being no longer sold, or restricted to certain uses. 69
The product will then continue to be sold at a high price until the innovator's patent
expires, usually somewhere between 5 and 10 years after initial launch.
Subsequently, generic product will begin to appear in the marketplace and the price
will drop significantly.
3.3 Environmental Issues

The overwhelming majority of the R&D effort expended in the design of a new drug
is concerned with its effects in humans. As we saw in Section 1.3, the environmental
impact of the pharmaceutical industry in general and its products in particular were
not considered to be significant until the end of the last century. However, work is
now undertaken in the R&D process in two specific areas related to the environment.
One is the move towards more sustainable manufacturing and the other towards
improving understanding of any potential environmental impacts that might arise
from the use of a new pharmaceutical.70
The manufacture of most pharmaceuticals is undertaken at a relatively small
scale, i.e. 0.1 to 10 tonnes year−1 compared to commodity chemicals such as
terephthalic acid which are produced in plants capable of making >500 000 tonnes
year−1. Unlike the majority of ‘bulk’ chemicals, most pharmaceuticals are very
complex organic molecules that have to be constructed using multiple synthetic
steps, often involving the isolation and purification of intermediate products. As a
consequence, process efficiency has historically been very low 71 and, despite the
small volumes of the pharmaceutical produced, the waste-to-product ratio has been
extremely high.
In recent years, driven by both cost and sustainability issues, the research
pharmaceutical companies have become industry leaders in the introduction of
green chemistry and technology techniques into their process design. The twelve
principles of green chemistry were first formulated by Anastas and Warner in
1998.72 Since then they have been actively taken up by the pharmaceutical sector in
the process design area and are now reaching further upstream, influencing
medicinal chemists in research and development laboratories.
Work on process design will begin at some point during phase 1 trials. Until this
point medicinal chemists will have been able to meet the demand for experimental
material from laboratory-scale synthesis; however, the phase 2 and particularly
phase 3 trials demand significant amounts of material, often at pilot-plant scale.
Although speed is still a major criterion in process development research, increased
attention is now given to ensuring that the process is efficient in energy, water,
solvents and raw materials. It is also necessary to ensure that any residual waste
produced is minimised and that it can be satisfactorily and efficiently treated.
Despite the growing concern about the presence of pharmaceutical residues in the
environment, there are still but few regulatory requirements to assess the potential
environmental impact of a new drug, apart from in the European Union. 73 Other
countries such as Canada and Japan have been considering legislation for several
years but as yet the only substantive regulations are those in the EU. Nevertheless,
the research pharmaceutical industry is aware of its producer responsibilities and
most of the companies have been voluntarily undertaking environmental risk
assessments of their new products for many years. In addition, some
companies, e.g. AstraZeneca, have been going further, making their data
public74 and introducing ecopharmacovigilance programmes, mirroring to some
extent the pharmacovigilance activities undertaken for the human population. 75

4 Commercial Realities

4.1 Problems with Patents

A successful pharmaceutical, once approved by medicines regulators such as the

FDA in the United States and the EMA in the European Community, can then be
sold. The innovating company will have already patented the drug and thus has
exclusive rights to sell the product until the patent expires. However, although
patents in developed countries are usually granted for 20 years, the window of sales
exclusivity will be significantly less, in most cases no more than 10 years. This is
because the innovating company needs to patent the drug well before its first launch
in order to protect its intellectual property. During this short period, of ten years or
less, the innovating company has to recoup all the R&D costs of both the drug(s)
being sold and of all the other drugs that failed during development, together with the
manufacturing and marketing costs. The instant that the patent expires, generic
competition will lead to a dramatic reduction in price and major loss of market share.
 Since patent life is one of the key determinants of the income that can be
generated from a product it is not surprising that research companies try to extend
patent life as much as possible.76 This “patent evergreening”48 can sometimes be
done simply by patenting the manufacturing process or the drug formulation or, in
some cases, the drug delivery system, all of which can be implemented much closer
to the launch date. Generic companies, on the other hand, endeavour to have
patents set aside or to find ingenious ways to get around the patents.
There has also been an increase in recent years in “pay for delay” agreements
between patent holders and generic manufacturers. Table 1 shows an example of
how these work. If the patent holder pays the generic company not to manufacture
then both the patent holder and the generic company benefit, but the price remains
higher after patent expiry than it would have done. However, the legality of these
deals is under question.77
Table 1 Example of “pay for delay” mechanism.
Annual
Patent Status Cost Price Scrip Price Patent H
In patent $1 $10 $9000
Expired $2 $1000
Patent holder pays generic company $2000/1000 prescriptions to delay manufacture and sale $7000

It is not only the inevitable loss of market share from generic companies that the
innovating company must be concerned about. Once a candidate drug is patented,
many years before product launch, the concept and principle on which the drug is
based will become public knowledge. All research pharmaceutical companies are
keenly aware that everyone else is keeping a close watch on their patents.
Companies can be expected to begin investigating interesting patents for areas of
research in which they already have major interests and it is, therefore, quite
common for several drugs with the same or similar modes of action to be
simultaneously under development in different companies, each one being carefully
designed to avoid infringing existing patents. Indeed, one of these follow-on drugs
might make it into the market first, which could have serious consequences for the
original innovator's sales.
 These drugs are often given the derogatory term “me-toos” and frequently
dismissed as being unnecessary and wasteful products of competition. However,
these drugs, which may only show incremental improvements on the original, are
nonetheless important to patients. It is frequently found that a patient who cannot
tolerate or fails to respond to one drug may benefit from one of the “me-toos”. 78
This short and increasingly diminished patent life available after pharmaceutical
launch has consequences throughout the business. This has been recognised by
legislators and a number of mechanisms have been introduced to provide extensions
to marketing exclusivity in order to promote the development of certain drugs, e.g.
paediatric medicines with low commercial value. For example, under certain
circumstances a manufacturer in the European Union can be granted a
supplementary protection certificate,79 which grants continued sales exclusivity for a
limited period, normally 5 years, after patent expiry.
The short useful patent life is the reason why research pharmaceutical companies
spend such large amounts of money on marketing. When the patent expires and
generic competition begins, marketing is largely unnecessary because by then
everyone is well aware that the “new” pharmaceutical exists and understands its
potential benefits for patients. However, at product launch, the patent holder does
not have the time to wait for this information to slowly spread across the medical
community. If the investment is to be recovered, the new pharmaceutical has to be
used immediately by as many patients as possible. This requires intensive marketing
efforts leading up to the launch of the pharmaceutical to ensure that all those who
might benefit know of its existence.
It is often said that research pharmaceutical companies spend more on marketing
than on R&D1 but this is largely a myth, arising from the way in which companies
display their expenditure in their annual accounts. All companies clearly display their
R&D expenditures because these often qualify for tax rebates. However, sales and
marketing expenditure is usually incorporated into an expenditure category called
“sales, general and administrative expenses” (SGA) in which the marketing budget is
only a relatively small proportion. Nevertheless, industry critics persist in comparing
R&D with SGA expenditure and coming to false conclusions. A more realistic
estimate suggests that the pharma industry spends approximately twice as much on
R&D as it does on marketing.80
The short useful patent life also results in other consequences with substantially
greater risks. In the early days of the industry, drug development was a linear
process; a pharmaceutical would be approved, manufacturing would begin,
distribution would occur and patients treated. This was possible because the
regulatory and testing procedures were simpler and shorter, thus leaving sufficient
patent life, after product launch, to generate a satisfactory return on investment
(ROI). Today, development timescales are much longer, with a corresponding
reduction in the potential sales window. This is leading to much riskier parallel
processing, with development and testing work, such as drug delivery system
design, running in parallel with the clinical development. Manufacturing process
design may also now begin as soon as a candidate drug is approved for
development; the manufacturing plant might be constructed during Phase 2 or 3
clinical trials and the product might be manufactured and distributed to pharmacies
before the FDA or EMA has given final marketing approval. This would enable
doctors to write prescriptions for the new pharmaceutical the day after marketing
approval was given. However, should marketing approval not be granted, all this
investment will, of course, be wasted. I have personal experience of a world-scale
chemical plant for a pharmaceutical active ingredient being constructed,
commissioned, mothballed and then demolished without ever making any saleable
product when the candidate drug was refused its market authorisation.
Why would companies take such risks? The aim is to reduce the time taken to
bring a candidate drug to the patient; speed to market is one of the key metrics in
this industry and weeks are important. A “blockbuster” pharmaceutical is defined as
one that generates US$ 1 billion revenue a year, 76 which translates to almost $20 
million loss in revenue to the business for every week the product launch is delayed.
The increased risk involved in manufacturing also leads to major structural
changes in the business model. The pharmaceutical industry developed as a set of
fully integrated and self-sufficient businesses. In-house research scientists produced
candidate drugs, which were then developed into saleable products; these were in
turn manufactured, marketed and distributed. However, the risks associated with
blockbuster drugs have led to a considerable reshaping of the business, particularly
in terms of manufacturing.
The telescoping of the development process leads to an increased risk of building
manufacturing plant that you might never use. However, if your new drug is
successfully launched and then turns out to be a blockbuster you may need to
rapidly scale up your manufacture to meet the unexpected demand which may
subsequently increase still further, requiring even more manufacturing capacity.
However, when the patent expires sales will nose dive and all this manufacturing
capacity will be surplus to requirements.
The initial response to this challenge was to attempt to design and build modular
in-house multi-use manufacturing facilities that could be used to produce any active
ingredient. However, a more economical solution has been to outsource
manufacturing to one or more toll-manufacturers, a practice which is now
commonplace in the research companies. The innovating company will use a pilot
plant to manufacture trial batches of active ingredient for clinical trials and to test out
process design options. The bulk active ingredient used for product sales will,
however, be manufactured by contractor(s) who is(are) much more able to match
production with demand.81 In addition to the fact that the research company does not
have to invest capital in expensive manufacturing plant for products with relatively
short life expectancies, outsource contracting has a number of additional
advantages. The use of toll-manufacturing increases flexibility, making it easier to
scale production up or down to meet fluctuating demands. It also provides business
resilience by enabling production to be divided between different locations and,
finally, modern toll-manufacturers are often more knowledgeable about efficient
process chemistry and have much lower operating costs, especially in India and
China.
Outsourcing benefits in manufacturing have encouraged industry to extend it into
most other areas of the business. Services such as security, catering, facilities
management and IT have commonly been outsourced, but this is now extending to
what would traditionally have been seen as core business competencies such as
pre-clinical R&D. For example, in 2012 AstraZeneca outsourced substantial amounts
of safety assessment, development drug metabolism and pharmacokinetics to a
contract research organisation.82
Despite the obvious benefits, outsourcing is itself not without risk and the US$ 1.4 
billion outsourcing agreement between AstraZeneca and IBM in 2007 for
telecommunications and IT was widely seen as a failure and needed to be
renegotiated five years later.83

4.2 Maintaining a Viable Business

The pharmaceutical industry consists of a set of businesses in which shareholders

can be persuaded to invest money with the expectation of receiving a return on their
investment. However, this industry is a high-risk business and thus the value
proposition presented to potential investors is a little unusual, as is illustrated by the
following case study:
Company A has identified research that suggests that regulation of target B in
human beings shows promise in producing a beneficial outcome for disease C.
Company A has also established that, at least in vitro, its candidate drug X has the
potential to regulate target B. It wishes to attract shareholders to invest between
US$ 500 million and US$ 800 million over the next 12–15 years to develop the
candidate into a marketable drug.Investors should be aware that there is no certainty
that drug X is actually able to regulate target B safely in vivo, or that any such
regulation of the target will actually significantly influence the course of the disease
concerned. The company estimates that the odds of success are <100 : 1 against,
but that if successful the drug would generate substantial annual profits in the region
of US$ 1–5 billion for up to 10 years.

As this example demonstrates, since the investment required is very large, long
term and has a very high risk of failure, the potential return on investment must be
very high if the necessary funds are to be forthcoming. It is also worth repeating that,
unlike many types of business investment where some saleable assets will be
created by the investment, failure in this context is absolute; when a candidate drug
fails, even in late stage development, there are zero assets available to offset the
losses.
Although this business model has many drawbacks, it has been sufficiently
attractive to enough investors for a very successful industry to be developed over the
last century, with a stream of new therapies appearing in the marketplace.
Alternative funding models continue to be proposed but to date none of these have
been applied successfully.84,85
There are a number of people who believe that it is fundamentally unethical to
make very large profits out of essential medicines and that either the state or non-
profit organisations should undertake this task. However, the risk is simply too great
for governments or non-profit companies to consider. For example, imagine the
response that you would get from a finance minister presented with the value
proposition in the case study above for the development of a single drug!
This then has a direct impact on research priorities. It is clear that despite their
size, pharmaceutical companies do not have sufficient resources to work in all areas
of medical need; however, because of development timescales and the need to
spread their investment risk, they must work on several candidate drugs
simultaneously. In choosing which areas to work in, a company must address the
following question: assuming that our potential candidate drugs in this area can be
successfully marketed, will they generate sufficient income during their patent life to
cover their development costs, a portion of the development costs of previously
unsuccessful candidates and, in addition, make an adequate return for the
shareholders?
In other words, there needs to be a sufficiently large number of patients who
require the drugs and also these patients must be able to pay for them, either directly
or via insurance or taxation. It should, therefore, be no surprise that pharmaceutical
companies heavily invest in research into chronic illnesses in the developed
world, e.g. cancer, dementia, diabetes, hypertension, etc., whilst paying scant
attention to diseases that only affect small numbers of patients.

4.3 Access to Medicines

This inevitably produces a substantial number of “orphan diseases”: life-threatening

conditions that affect only a small fraction of the population, usually defined as
between 1/1000 and 1/5000, which no commercial organisation can afford to
investigate, simply because there are insufficient patients from which to recoup the
investment cost. As the time and cost of development increases and the useful
patent life shrinks, the number of commercially unviable areas also increases.
Consequently, a number of separate pieces of legislation 86,87 have been enacted
which modify the rules on patents, taxation and subsidies to make R&D investment
financially viable for these orphan diseases. Pharmaceutical companies are
frequently accused of not investing in some areas because they will make too little
profit. A recent example was the public outrage that the pharmaceutical industry had
not already invested in a vaccine active against Ebola. However, the reality is that
investing in areas such as this would inevitably lead to bankruptcy since in such
areas the costs are certain to exceed the income, even if a successful product could
be invented.
In recent years another problem has emerged. Antibiotics are used to treat
infections in the majority of the population so would not normally be considered as
“orphan drugs”. However, we have now reached the stage where new drug
development in this area has dwindled. One reason is the inherent difficulty of the
research challenges; identifying compounds that will rapidly kill infectious cells in
short timescales whilst being harmless to every other cell is somewhat difficult;
however, the principal reason is economic. Antibiotics are used by patients for very
short periods and sales volumes are now insufficient to justify the necessary
development costs. This is exacerbated by the fact that any new antibiotic would
now be prescribed sparingly to ensure that antibiotic resistance was minimised. This
problem was identified as early as 200388 but only recently have serious attempts
been made to find a funding solution. 89
The other requirement, in addition to having enough potential patients, is “ability to
pay” or, more specifically, “ability to pay enough”. This is a major ethical dilemma for
the pharmaceutical industry. It has two parts, one less visible than the other. The
less obvious issue is that it is a determinant of which diseases receive attention.
There may be a large number of potential patients, but if none of them could afford to
buy a newly developed drug then such diseases are unlikely to be a research
priority. The second issue concerns access to medicines that have already been
developed. Both issues are now described as the access to medicines issue 90 and
every major pharma company has a public policy relating to it, e.g. Pfizer.91
The first issue is being addressed by most of the major research pharmaceutical
companies who are now involved, often with philanthropic partners, in altruistic drug-
development programmes for diseases that predominantly affect the developing
world. For example, GSK has a major drug development programme on malaria,
jointly with the Gates Foundation.92 None of these drug developments will be
profitable; indeed, most will cost money, leading to an overall reduction in profits, but
the major pharma companies accept that they have a social responsibility in this
area. Recently some pharmaceutical companies have begun to share their entire
libraries of chemical compounds, allowing other researchers to look through them for
promising drug candidates which the companies themselves are unable to take into
commercial development.93 This enables charitable foundations, government
agencies and academics to pursue developments in these areas.
The second issue, “ability to pay”, also has two components. It is primarily a
problem with pharmaceuticals that are still in patent, since the price of the
subsequent generic pharmaceuticals, which is available after patent expiry, is much
reduced. Traditionally this issue related solely to the developing world and came to a
climax in 1997 during the AIDS epidemic, where millions of sufferers from the
disease in Africa were unable to afford the new retroviral pharmaceuticals that had
been developed.94 Arguments over the tension between international rights to patent
protection and health emergencies were eventually resolved and led to the Doha
Declaration on trade-related aspects of intellectual property rights (TRIPS
Agreement) and public health.95 In fact, many patented pharmaceuticals are now
supplied to developing countries at a fraction of the price that they are sold at in the
developed world.
However, this exacerbates the problem of parallel imports. Differential prices for
pharmaceuticals between developed and developing countries, especially where the
price difference is substantial, provide opportunities for significant arbitrage: buying a
product in the developing country at the low price, exporting it to the developed
country and then selling it at an intermediate but highly profitable price. During the
AIDS crisis in Africa, GSK became so concerned at this possibility that they set up
some clinics where the pharmaceuticals could be administered to the patient without
the risk of the material being exported. This type of legal but unethical arbitrage has
recently been happening so frequently within the European Union that artificial
pharmaceutical shortages have ensued, leading to manufacturers trying to impose a
quota system.96
However, it is not only patients in developing countries that have difficulties arising
from pharmaceutical pricing. In most countries pharmaceutical pricing is at least
partially controlled by the state. Pressure on national health services and private
health insurance companies is leading to increased downward pressure on prices
and, in some cases, complete refusal to allow a new pharmaceutical to be
prescribed.97 This market information then feeds back into the commercial decisions
made by the industry as to what areas of research should be pursued, which in turn
leads to more orphan diseases to the overall detriment of patients.

5 The Pharmaceutical Industry in the Future

5.1 Commercial Pressures

The research pharmaceutical part of the industry is currently going through a major
crisis as a number of issues come to the surface simultaneously.
Since the first blockbuster pharmaceutical, cimetidine, was launched by GSK in
the 1970s, both industry and regulators have been convinced that the “blockbuster
model” for the industry was the long-term way forward: drug discovery and
development was known to be high risk, expensive and time consuming, and that
after patent expiry, generic manufacture would dramatically reduce the price of novel
pharmaceuticals. However, new ‘blockbuster’ pharmaceuticals would continue to be
invented at regular intervals and the profits made during their patent life would be
more than sufficient to fund the necessary R&D for future products. Thus, the
industry as a whole would continue to deliver innovative pharmaceuticals which
would be available to all at low prices after a short patent life.
 For the next few years it looked as if this analysis was going to be correct as a
series of new “blockbuster” pharmaceuticals arrived regularly on the market from the
R&D organisations of many of the major research pharmaceutical companies.
Unfortunately, this didn’t last and it turned out that simply “turning the handle” of the
R&D machinery did not guarantee that any new products at all would emerge, let
alone a stream of novel “blockbusters”. In fact, R&D efficiency in the pharmaceutical
industry has suffered a long-term decline. The number of new pharmaceuticals
approved per billion US dollars spent on R&D has halved roughly every 9 years
since 1950, falling around 80-fold in inflation-adjusted terms. 98
The initial response to these problems by the industry was consolidation, with a
number of large and sequential mergers and acquisitions followed by a number of
very large ones. The 30 research pharmaceutical companies that existed in 1989
had by 2010 successively merged to become only 9 companies. Pfizer alone had
absorbed American Cyanamid, American Home Products, Pharmacia, Upjohn,
Warner-Lambert and Wyeth, as well as the pharmaceutical interests of Monsanto.
The rationale driving this activity was to take advantage of synergy between the
partners to enable staff and cost reductions to be made whilst the innovation and
R&D effort in the two drug pipelines could be maximised. This activity was very
popular with the financial markets but, with hindsight, the benefits to shareholder
value were difficult to realise.99 Much more importantly, substantially increasing the
R&D effort did not result in any commensurate increase in new products. In 2008, J.
P. Garnier, the chief executive of GSK, finally admitted this publically: 100
“The leaders of the major corporations including pharmaceuticals have incorrectly
assumed that R&D was scalable, could be industrialized & could be driven by
detailed metrics and automation. The grand result: a loss of personal accountability,
transparency and the passion of scientists in discovery and development”

A year later, in 2009, Bernard Munos said in print 101 what had been obvious to
many in the industry for some time:
“Success in the pharmaceutical industry depends on the random occurrence of a
few “black swan” products”.

The fact that the “blockbuster” drug model doesn’t work has dramatic
consequences for the future of the industry. Profits from successful pharmaceuticals
are necessary to maintain the R&D effort, but unless new pharmaceuticals replace
successful pharmaceuticals when their patent expires it becomes increasingly
difficult to maintain the R&D. The scale of the problem can be seen in Table 2.102
Table 2 Loss of revenue due to patent expiry.
Company % Revenue loss in 2010–12 solely due to patent expiry
Pfizer 41
AstraZeneca 38
Sanofi - Aventis 34
Bristol Myers Squib 30
GSK 23
Eli Lilly 22
Merck 22
Novartis 14

Faced with this “patent cliff”, the industry has adopted two different strategies: firstly,
seeking to improve its record of innovation by acquisitions of biotechnology
companies, e.g. the acquisition of Medimmune by AstraZeneca in 2007 for US$ 16 
billion103 and the acquisition of Human Genome Science by GSK in 2012 for $ 3.6 
billion,104 together with a host of other smaller “boutique” companies.
The second strategy has been to drastically reduce operating costs using a
combination of direct cost savings from improved efficiency coupled with portfolio
rationalisation, increased collaboration and extensive outsourcing. As a result, the
number of jobs in the global research pharmaceutical sector fell by ca. 300 000 from
2000 to 2010.105 Despite these actions, innovation rates have not yet improved.

5.2 Environmental Challenges

In recent years there have been many suggestions that, in the light of the discovery
of residues of pharmaceuticals in water, the pharmaceutical industry should begin to
produce “green” pharmaceuticals.106–108 This then raises the question of what do we
mean by “green” and how green is the present generation of pharmaceuticals?
The most comprehensive data that currently exist come from the Swedish
environmental classification system.109 This categorises pharmaceuticals into five
classes based on their risk to the environment, which has been calculated from their
intrinsic hazard data and predicted environmental exposure. Although work is still
underway, it is already clear that the majority of pharmaceuticals (>97%) fall into the
“insignificant” risk category. Another recent study, carried out under the European
Union Framework 6 research programme, has produced a similar outcome. 31 This
reported that a large body of literature is now available on the ecotoxicity of
pharmaceuticals and that analysis of the data, together with an increasing amount of
monitoring and modelling data, indicates that the environmental risks of the majority
of pharmaceuticals are low.
Although the environmental risk can be shown to be very low, residues of many
pharmaceuticals can still be detected in the aquatic environment using modern
analytical techniques. Consequently, many people, invoking the precautionary
principle, continue to put pressure on the industry to develop “greener drugs”. The
objective of “greener” drug design is to produce pharmaceuticals which leave lower
residues in the environment.108
A number of environmental scientists continue to make the assumption that this
means that all new pharmaceuticals should be biodegradable. However, this
somewhat simplistic approach, even if it were possible to realise, would not be a
panacea and is certainly not simple to accomplish given our current state of
knowledge. There are a number of pharmaceuticals that are biodegradable, 109 but
this has happened by chance and none of our current pharmaceuticals has been
designed with this in mind. Pharmaceuticals, like most products, do not need to be
100% persistent throughout their life-cycle, but they do need to be functionally
persistent. In other words they have to be stable enough to remain unchanged
during a realistic shelf-life and to be able to be transported, unchanged, though
various pathways in the body to reach the site where their effect will be exerted.
Since most pharmaceuticals are taken orally, this means being able to transit
through the highly acidic stomach. Not only is stability needed for the treatment to be
effective, but instability can result in side effects caused by the toxicity of breakdown
products, particularly in the liver. The ideal pharmaceutical would therefore be a
substance which only began to break down after it had been excreted by the patient.
 However, producing pharmaceuticals that are more degradable in the environment
will not necessarily eliminate environmental residues. The very low environmental
residues that are currently being detected represent the equilibrium concentration
reached between a constant input from wastewater treatment plants and the
degradation rate in the environment. The data from the Swedish environmental
classification scheme109 demonstrate that although very few existing pharmaceuticals
are rapidly degraded in the environment, relatively few of them are highly persistent
either, and most pharmaceuticals appear to degrade, albeit slowly. 110 Increasing the
degradation rate of new pharmaceuticals would undoubtedly reduce the current
residue levels found in the environment but, even with existing analytical
methodology, it is highly likely that residues at lower levels would still be detectable.
However, our objective, taking this precautionary approach, is not to produce
degradable pharmaceuticals but to reduce residue levels in the environment as far
as possible without compromising the health of patients. Increased degradability of
pharmaceuticals is one way that this might be achieved but there are many other
ways to achieve the same endpoint.
One of the drivers of research in the pharmaceutical industry is to improve the
effectiveness of human pharmaceuticals. Consequently, research teams are always
trying to make drugs work better in the patient and most of the improvements being
continuously targeted in drug discovery and development teams will also produce a
lower environmental footprint. Table 3 shows several of the pharmacological
objectives that would deliver improved patient benefit, alongside the environmental
improvements that would ensue if that objective were reached. 70
Table 3 Comparison of criteria for drug design and environmental significance.
Drug Design Criteria Environmental Significance
100% Oral absorption Reduced emissions from patients to dra
Metabolised in patient to inert substances Releases only inert substances
Effective in all patients treated Produce lower overall drug use
Disease receptor specific No impact on healthy receptors
No effects other than therapeutic ones. No non-target effects
The first three of the criteria listed in the table would lead to lower residues of active
substances entering the environment; in other words, reduction at source. The last
two would lead to even lower potential impact of the residual active material on
ecosystems.
Current developments are already leading to candidate drugs with a lower
potential for environmental impact. For example, a better understanding of drug
metabolism and pharmacokinetics can result in lower doses being administered to
achieve the same therapeutic effect. Similarly, shorter duration of therapy, better
targeting and improved drug delivery combined with increased specificity all lead
directly to smaller emissions from the patient to the environment and thus lower
environmental residues.
As we have seen above, the industry continues to struggle with the legacy
problems of the “blockbuster” approach and is also suffering from a decline in the
rate of invention. However, two technical revolutions are underway which may
improve this situation and may also reduce the overall environmental impact of the
industry.
The first of these is the advance of biopharmaceuticals. 111 The vast majority of our
existing pharmaceuticals consist of relatively small molecules produced by chemical
synthesis. However, advances in our understanding of genomics and proteomics,
coupled with our increasing technological capability to manufacture very large
molecules, are leading to a rapidly growing interest in the use of biological as
opposed to chemical-based therapies. The first biopharmaceutical, synthetic insulin,
developed by Genentech and marketed by Eli Lilly, was approved for sale in 1982
and by 2013 there were 300 biological pharmaceuticals that had been approved by
the US FDA with a further 5400 under development in the USA alone. In 2012,
based on worldwide sales, 7 of the top 10 drugs were biopharmaceuticals 112 and it is
estimated that this area now accounts for more than 40% of all drugs in
development.
The fastest growth is in the area of monoclonal antibodies, which are components
of the human immune system and are considered by some to be the perfect human
medicines. They have major therapeutic advantages. Their high potency means that
patient doses can be small, which subsequently then requires only small-scale
manufacture. They have exquisite specificity and can be targeted to human receptor
sub-types responsible for pathology or disease; thus they have substantially less
potential for side effects. These proteins are then rapidly metabolised by the human
body to produce fragments with no mammalian biological activity, thus avoiding the
possibility of producing metabolites with undesirable pharmacological activity. From
an environmental perspective these substances appear to offer major advantages;
most of these compounds produce little if any residues of the active substance,
which is in any case much less likely to exert any adverse impact on the ecosystem,
since it is specifically designed to interact only with a diseased human receptor.
However, the full environmental relevance of these substances is not yet clear.
Biopharmaceuticals are not all easily biodegraded, and modified natural compounds
even less so. Structurally related compounds such as plasmids have already been
detected in the environment and it is known that the protein structures known as
prions are very environmentally stable.113
The second therapeutic revolution also stems from our improved understanding of
genomics, although it is still in its infancy. This is the area of “personalised
medicine”.114 It has been known for many years that most pharmaceuticals do not
work successfully in all patients. It was suspected that this was due to the slightly
different genetic make-up of individual patients, but lack of appropriate experimental
techniques meant that this could not be further investigated. However, the recent
rapid advances in the mapping of the human genome and subsequent development
of the scientific disciplines of genomics, proteomics and metabolomics is leading us
to a better understanding of the molecular signals of many diseases. The
expectation is that molecular screens combined with clinical data will point to more
precise treatment options for each patient sub-group. This should enable much more
precise and effective prescribing to occur which will, in turn, mean less overall drug
use, since every prescribed dose will be effective first time.

6 Conclusions
The research pharmaceutical industry remains beset with problems, for most of
which there do not appear to be obvious solutions.
Although it has exclusive rights to the sale of a new drug during its patent
life: increasing regulation is leading to additional costs and longer development times
with consequently reduced times to patent expiry; increasing risk aversion by
executive management teams is contributing to a slowdown in the appearance of
novel pharmaceuticals; reducing risk tolerance in patient populations and regulatory
bodies is leading to a lower success rate for marketing authorisation approvals; cost
pressures within national health services are leading to progressive downward
pressure on prices; market penetration by generics is increasing rapidly; and many
people consider that the current research pharmaceutical business model is no
longer sustainable, but no-one has yet come up with a better one.
However, because of the increasing domination of drug-development pipelines by
biopharmaceuticals, we can be certain that the next generation of human
pharmaceuticals will leave significantly smaller residues in the environment than
those that result from the use of current medicines.

References
1. M. Angell The Truth About the Drug Companies , Random House, New York,
2004,  Search PubMed  .
2. J. Law Big Pharma , Constable, London, 2006,  Search PubMed  .
3. A. Leung Toxicol. Pathol., 2006, 34 , 319  CrossRef   PubMed  .
4. Anon Greek Medicine , National Institutes of Health, USA, 2002,  Search PubMed  .
5. S. H. Buhner Sacred Plant Medicine , Raven Press, Coeur d’Alene,
1996,  Search PubMed  .
6. J. Sumner The Natural History of Medicinal Plants , Timber Press,
2000,  Search PubMed  .
7. P. Clarke J. Anthropol. Soc. South Aust., 2006, 33 , 3  Search PubMed  .
8. S. Hamarneh Med. Hist., 1972, 16 , 226  CrossRef   CAS  .
9. A. V. Arsdall Medieval Herbal Remedies: The Old English Herbarium and Anglo-
Saxon Medicine , Psychology Press, 2002,  Search PubMed  .
10. W. Pagel Paracelsus: An Introduction to Philosophical Medicine in the Era of the
Renaissance , Karger, New York, 1982,  Search PubMed  .
11. O. Thulesius Lakartidningen, 1996, 93 , 4736  CrossRef   CAS  .
12. D. A. Jones Pharm. Hist., 1980, 10 , 9  CrossRef   CAS  .
13. P. Sheldon The Life and Times of William Withering: His Work, His Legacy ,
Brewin Books, Studley, 2004,  Search PubMed  .
14. J. Kochweser and P. Schechter , Life Sci., 1978, 22 , 1361  CrossRef   CAS  .
15. N. N. Greenwood and A. Earnshaw , Chemistry of the Elements , Butterworth-
Heinemann, 1997,  Search PubMed  .
16. D. Jeffreys Aspirin: The Extraordinary Story of a Wonder Drug , Bloomsbury,
London, 2004,  Search PubMed  .
17. Anon, National Health Service Act, 1946, 9 & 10 GEO 6, 81..
18. H. Sjöström and R. Nilsson , Thalidomide and the Power of the Drug
Companies , Penguin, London, 1972,  Search PubMed  .
19. Anon, US Public Law 87-781, 1962, Statute 76, 781.
20. W. Murrell Lancet, 1879, 1 , 80  CrossRef  .
21. K. P. Link Circulation, 1959, 19 , 97  CrossRef   CAS   PubMed  .
22. Anon Off. J., 2012, L128 , 1  Search PubMed  .
23. EMA (European Medicines Agency), Summary of opinion (initial authorisation)
Tecfidera Dimethyl fumarate, 2013, (EMA/167897/2013).
24. J. Sumpter , R. Brown , R. Murray-Smith and G. Maack , Environ. Toxicol.
Chem., 2014, 33 , 1915  CrossRef   CAS   PubMed  .
25. P. Szymański , M. Markowicz and E. Mikiciuk-Olasik , Int. J. Mol. Sci., 2012, 13 ,
427  CrossRef   PubMed  .
26. D. Taylor and T. Senac , Chemosphere, 2014, 115 , 95  CrossRef   CAS   PubMed  .
27. Anon, Sanofi Drug Development Pipeline, accessed 12 September 2014,
http://en.sanofi.com/rd/rd_portfolio/rd_portfolio.aspx.
28. WHO, Guidelines on the Use of INNs for Pharmaceutical Substances, 1997.
29. M. L. Richardson and J. M. Bowron , J. Pharm. Pharmacol., 1985, 37 ,
1  CrossRef   CAS   PubMed  .
30. H. J. Stan , T. Heberer and M. Linkerhägner , Vom Wasser, 1994, 83 ,
57  CrossRef   CAS  .
31. B. Roig Pharmaceuticals in the Environment, Current Knowledge and Needs
Assessment to Reduce Pressure and Impact , Benoit RoigIWA Publishing,
2010,  Search PubMed  .
32. D. G. J. Larsson , C. de Pedro and N. Paxeus , J. Hazard. Mater., 2007, 148 ,
751  CrossRef   CAS   PubMed  .
33. D. Li , M. Yang , J. Hu , L. Ren , Y. Zhang and K. Li , Environ. Toxicol. Chem.,
2008, 27 , 80 —86  CrossRef   CAS   PubMed  .
34. K. Thomas and K. H. Langford , Point Sources of Human Pharmaceuticals into
the Aquatic Environment, Green & Sustainable Pharmacy , K. Kummerer and M.
Hempel, Springer, Berlin, 2010,  Search PubMed  .
35. D. G. J. Larsson Philos. Trans. R. Soc., B, 2014, 369 ,
2013.0571  CrossRef   PubMed  .
36. B. Halling-Sørensen , S. N. Nielsen , P. F. Lanzky , F. Ingerslev , H. Holten-
Lützhøft and S. E. Jørgensen , Chemosphere, 1998, 36 , 393  CrossRef  .
37. Pharmaceuticals in the Environment , K. KümmererSpringer-Verlag, New York,
2004,  Search PubMed  .
38. V. L. Cunningham , M. Buzby , T. H. Hutchinson , F Mastrocco , N. Parke and N.
Roden , Environ. Sci. Technol., 2006, 40 , 3457  CrossRef  .
39. R. Cuthbert , M. A. Taggart , V. Prakash , M. Saini , D. Swarup , S. Upreti , R.
Mateo , S. S. Chakraborty , P. Deori and R. E. Green , PLoS One, 2011, 6 ,
e19069  CrossRef   CAS  .
40. S. Jobling and R. Owen , Ethinyl estradiol: Bitter Pill for the Precautionary
Principle, Late Lessons from Early Warnings: Science, Precaution, Innovation ,
D. GeeEuropean Environment Agency, Copenhagen, 2013,  Search PubMed  .
41. Anon The Richard & Hinda Rosenthal Symposium 2014: Antimicrobial
Resistance: A Problem Without Borders , National Academies Press,
Washington, 2014,  Search PubMed  .
42. C. L. Maree , R. S. Daum , S. Boyle-Vavra , K. Matayoshi and L. G.
Miller , Emerging Infect. Dis., 2007, 13 , 236  CrossRef   PubMed  .
43. K. Kümmerer Chemosphere, 2009, 75 , 417  CrossRef   PubMed  .
44. K. Kümmerer Chemosphere, 2009, 75 , 435  CrossRef   PubMed  .
45. E. M. H. Wellington , A. B. A. Boxall , P. Cross , E. J. Feil , W. H. Gaze , P. M.
Hawkey , A. S. Johnson-Rollings , D. L. Jones , N. M. Lee , W. Otten , C. M.
Thomas and A. P. Williams , Lancet Infect. Dis., 2013, 13 , 155  CrossRef   CAS  .
46. B. Goldacre Bad Pharma , Fourth Estate, London, 2013,  Search PubMed  .
47. W.Noor and M.Kleinrock, Pharmaceutical Executive, 2013, May.
48. G. Boehm , L. Yaoa , L. Hana and Q. Zheng , Acta Pharm. Sin. B, 2013, 3 ,
297  CrossRef   PubMed  .
49. J. A. DiMasi , R. W. Hansen and H. G. Grabowski , J. Health Econ., 2003, 22 ,
151  CrossRef  .
50. M. E. Bunnage Nat. Chem. Biol., 2011, 7 , 335  CrossRef   CAS   PubMed  .
51. D.Lowe, In the Pipeline, 2007, accessed 29 November 2014,
http://pipeline.corante.com/archives/2007/11/27/then_i_felt_like_some_watcher_
of_the_skies_.php.
52. Anon, GSK Product Development Pipeline, accessed 29 November 2014,
http://www.gsk.com/media/280387/product-pipeline-2014.pdf.
53. Anon, Aurora Compound Library, accessed 29 November 2014,
http://www.aurorafinechemicals.com/compound-libraries.html.
54. E. A. Martis , R. Radhakrishnan and R. R. Badve , J. Appl. Pharm. Sci.,
2011, 01 , 2  Search PubMed  .
55. W. A. Guiguemde , A. A. Shelat , J. F. Garcia-Bustos , T. T. Diagana , F.-J.
Gamo and R. K. Guyemail , Chem. Biol., 2012, 19 , 116  CrossRef   CAS   PubMed  .
56. J. Owens Nat. Rev. Drug Discovery, 2007, 6 , 187  CrossRef   CAS   PubMed  .
57. J. Aubert , C. J. J. Mulder , K. Schrör and S. R. Vavricka , SelfCare, 2011, 2 ,
1  Search PubMed  .
58. C. A. Hudis N. Engl. J. Med., 2007, 357 , 39  CrossRef   CAS   PubMed  .
59. R. Kirk and L. Hutchinson , Nat. Rev. Clin. Oncol., 2012, 9 ,
185  CrossRef   PubMed  .
60. L. M. Friedman , C. D. Furberg and D. L. De Mets , Ethical Issues, Fundamentals
of Clinical Trials , Springer Science+Business Media, New York,
2010,  Search PubMed  .
61. J. Verma J. Clin. Trials, 2013, 3 , 1  Search PubMed  .
62. N. K. Terrett , A. S. Bell , D. Brown and P. Ellis , Bioorg. Med. Chem. Lett.,
1996, 6 , 1819  CrossRef  .
63. G. Suntharalingam , M. R. Perry , S. Ward , S. J. Brett , A. Castello-Cortes , M. D.
Brunner and N. Panoskaltsis , N. Engl. J. Med., 2006, 355 ,
1018  CrossRef   CAS   PubMed  .
64. R.Flynn, Bloomberg, 2012, accessed August 12, 2014,
http://www.bloomberg.com/news/2012-08-23/bristol-myers-drops-hepatitis-c-
drug-after-patient-death.html.
65. M.De'sapinto, Reuters, 2012, accessed May 7, 2014,
http://in.reuters.com/article/2012/05/07/us-roche-idINBRE84604S20120507?
feedType=RSS&feedName=health&utm_source=dlvr.it&utm_medium=twitter&dlv
rit=309303.
66. S. Basavaraj and G. V. Betageri , Acta Pharm. Sin. B, 2014, 4 ,
3  CrossRef   PubMed  .
67. S.Estcourt, Pharmaceutical Executive, 2008, accessed 12 August 2014,
http://www.pharmexec.com/node/233178.
68. Anon, North Carolina drug maker gets FDA approval to provide experimental
treatment to Ebola patients, 2014, Associated Press, accessed 12 August 2014,
http://bigstory.ap.org/article/17d2b3fd2bf445c1bbb87eb5b226aac4/drugmaker-
provides-experimental-drug-ebola-use.
69. Anon, FDA Public Health Advisory Notice,Safety of Vioxx, 2004, accessed
September 30, 2014,
http://www.fda.gov/Drugs/DrugSafety/PostmarketDrugSafetyInformationforPatient
sandProviders/ucm106274.htm.
70. D. Taylor Ecopharmacostewardship – A Pharmaceutical Industry
Perspective, Sustainable Pharmacy , K. Kummerer and M. Hempel, Springer,
Berlin, 2010,  Search PubMed  .
71. R. A. Sheldon CHEMTECH, 1994, 24 , 38  CrossRef   CAS  .
72. P. T. Anastas and J. C. Warner , Green Chemistry: Theory and Practice , Oxford
University Press, USA, 1998,  Search PubMed  .
73. Anon, Guideline on the environmental risk assessment of medicinal products for
human use, European medicines Evaluation Agency Guidance Note
EMEA/CHMP/SWP/4447/00, 2007.
74. AstraZeneca Environmental Risk Assessment Data, accessed 12 August 2014,
http://www.astrazeneca.com/Responsibility/The-environment/Pharmaceuticals-in-
the-environment/era-data-2012.
75. G. Holm , J. Talbot , D. Taylor , J. R. Snape , R. Murray-Smith and P.
Sörme , Drug Saf., 2013, 36 , 533  CrossRef   PubMed  .
76. Anon, Pharmaceutical Sector Inquiry Report, European Commission, DG
Competition, 2009.
77. E.Silverman, Wall St Journal, 2014, 23rd September, accessed 29 September
2014, http://blogs.wsj.com/pharmalot/2014/09/23/why-the-ftc-lawsuit-over-pay-to-
delay-deals-matters-carrier-explains/.
78. A. I. Wertheimer and T. M. Santella , Pharmaceutical Evolution, The Advantages
of Incremental Innovation in Drug Development , Competitive Enterprise Institute,
Washington, 2009,  Search PubMed  .
79. Anon Off. J., 1992, L 182 , 1  Search PubMed  .
80. T.Staton, FiercePharma, 2013, 21st May, accessed 14 September 2014,
http://www.fiercepharma.com/story/does-pharma-spend-more-marketing-rd-
numbers-check/2013-05-21.
81. P.Pollak, A.Badrot and R.Dach, Contract Pharma, 2012, January, accessed 12th
August 2014, http://www.contractpharma.com/issues/2012-01/view_features/api-
manufacturing-facts-and-fiction/.
82. J. Tremblay Chem. Eng. News, 2012, 90 , 9  Search PubMed  .
83. L.Clarke, Computer Weekly, 2013, accessed 12 August 2014,
http://www.computerweekly.com/news/2240179336/AstraZeneca-opts-for-co-
operation-after-IBM-fall-out.
84. J. Morris , P. Stevens and A. van Gelder , Incentivising Research and
Development for the Diseases of Poverty , International Policy Network, London,
2005,  Search PubMed  .
85. M. Kessel and F. Frank , Nat. Biotechnol., 2007, 25 , 859  CrossRef   CAS   PubMed  .
86. Anon, US Public Law 97 – 414, 1983, Statute 96, 2049.
87. Anon Off. J., 2000, L18 , 1  Search PubMed  .
88. L. J. Sellars Pharm Exec., 2003, 23 , 22  Search PubMed  .
89. Anon Nat. Rev. Drug Discovery, 2012, 11 , 507  CrossRef   PubMed  .
90. Anon, Access to Medicines Index, accessed 12 August 2014,
http://www.accesstomedicineindex.org/what-index.
91. Pfizer, Access to Medicines Policy, 2009, accessed 12 August 2014,
http://www.pfizer.com/files/corporate_citizenship/cr_report/access_meds.pdf.
92. K.Kelland, GSK seeks approval for world's first malaria vaccine, 2014, Reuters,
24th July, accessed 12 August 2014,
http://www.reuters.com/article/2014/07/24/us-gsk-malaria-vaccine-
idUSKBN0FT13220140724.
93. R.Cressey, Nature News, 2012, 14th February, accessed 12 August 2014,
http://www.nature.com/news/data-sharing-aids-the-fight-against-malaria-1.10018.
94. W. Fisher III and C. P. Rigamonti , The South Africa Aids Controversy, Law and
Business of Patents , Harvard Law School, 2005, 2008  Search PubMed  .
95. Anon, Doha Declaration on TRIPS and Public Health, 2001, accessed 14
September 2014,
http://www.wto.org/english/thewto_e/minist_e/min01_e/mindecl_trips_e.htm.
96. Anon, Drug shortages as pharmacists sell medication abroad, Daily Telegraph,
2014, 9th October, accessed 14 September 2014,
http://www.telegraph.co.uk/health/healthnews/9106720/Drug-shortage-as-
phramacists-sell-medication-abroad.html.
97. D. Hughes and S. Doheny , Soc. Sci. Med., 2011, 73 , 1460  CrossRef   PubMed  .
98. J. W. Scannell , A. Blanckley , H. Boldon and B. Warrington , Nat. Rev. Drug
Discovery, 2012, 11 , 191  CrossRef   CAS   PubMed  .
99. J. L. LaMattina Nat. Rev. Drug Discovery, 2011, 10 , 559  CrossRef   CAS   PubMed  .
100. J. P. Garnier Harvard Bus. Rev., 2008, 86 , 68  Search PubMed  .
101. B. Munos Nat. Rev., 2009, 8 , 959  CrossRef   CAS  .
102. Anon, Pharma 2020, The Vision, PriceWaterhouseCoopers Report, 2010.
103. A.Pollack, New York Times, 2007, 24th April, accessed 14 August 2014,
http://www.nytimes.com/2007/04/24/business/24drug-web.html?_r=2&.
104. B.Hirschler and T.Clarke, Reuters, 2012, 16th July, accessed 14 August
2014, http://business.financialpost.com/2012/07/16/gsk-clinches-3b-deal-to-buy-
human-genome/.
105. M.Herper, Forbes, 2011, 13th April, accessed 14th August 2014,
http://www.forbes.com/sites/matthewherper/2011/04/13/a-decade-in-drug-
industry-layoffs/.
106. C. G. Daughton Environ. Health Perspect., 2003, 111 , 757  CrossRef   CAS  .
107. K. Kümmerer Green Chem., 2007, 9 , 899  RSC  .
108. K. Kümmerer Rational design of molecules by Life Cycle
Engineering, Sustainable Pharmacy , K. Kummerer and M. Hempel, Springer,
Berlin, 2010,  Search PubMed  .
109. B. Mattson , I. Näsman and J. Ström , RAJ Pharma, 2007, 153  Search PubMed  .
110. S. C. Monteiro and A. B. A. Boxall , Rev. Environ. Contam. Toxicol.,
2010, 202 , 53  CrossRef   CAS  .
111. G.Long and J.Works, Innovation in the Biopharmaceutical Pipeline: A
Multidimensional View, Analysis Group Report, 2013.
112. Anon, accessed 20 September 2014,
http://www.portfoliomanagementsolutions.com/the-organization-of-
pharmaceutical-rd/small-molecule-drugs-versus-biomolecular-drugs-biologics/.
113. C. J. Johnson , J. P. Bennett , S. M. Biro , J. C. Duque-Velasquez , C. M.
Rodriguez , R. A. Bessen and T. E. Rocke , PLoS One, 2011, 11 ,
6  Search PubMed  .
114. M. A. Hamburg and F. S. Collins , N. Engl. J. Med., 2010, 363 ,
301  CrossRef   CAS   PubMed  .

Footnote