Growth of pharmaceutical giants: from production orientation to R&D orientation

2018/09/28 14:36
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The case of penicillin has enabled pharmaceutical companies to finally realize that developing small quantities of effective drugs is far more profitable than a large but small number of products. After the end of World War II, the traditional pharmaceutical industry changed from production-oriented to research-oriented. The pharmaceutical industry ushered in a golden age, and a number of multinational pharmaceutical giants grew up.
Since the outbreak of the global financial crisis in 2008, the industry has continued to slump in investment, but the pharmaceutical industry has maintained a steady and steady investment.
According to the top 25 list of global pharmaceutical R&D expenditures released by GEN, a well-known website in the biopharmaceutical industry, the 25 pharmaceutical companies listed in the list have accumulated a total of 100.441 billion US dollars for research and development in 2014, of which the top 20 accounted for 94.108 billion. The US dollar has increased by 6% compared to the US$886.43 billion invested in 2011.
In the pharmaceutical industry, R&D capability is an important evaluation indicator for measuring the future development of a pharmaceutical company. The proportion of R&D expenditure to operating income (hereinafter referred to as R&D ratio) is one of the common specific parameters.
Then, when do pharmaceutical companies begin to use R&D as their core competitiveness? The story still goes back and forth before and after World War II.
The unprecedented war in human history exposed the gaps in the pharmaceutical field, and a large amount of demand was not met. The government and the companies that were profitable were beginning to realize the importance of investing in research and development of truly effective drugs. Pfizer, Merck, and Lilly... A group of multinational pharmaceutical giants have grown from World War II and completely changed the direction of the pharmaceutical industry. It can be said that the modern pharmaceutical industry started in the global economic recovery period after World War II.
Before World War II, Pfizer's most famous product was citric acid. At that time, many pharmaceutical companies were more like the current API companies, mainly producing chemical products rather than mature preparations. These companies are also reluctant to give up the main business that is still making money, investing a lot of money to undertake the function of commercializing new research results in the laboratory.
This selective "unconsciousness" has led to the fact that penicillin, also known as penicillin, has been hailed as the most effective antibiotic in human history. It has been discovered for more than a decade, but it cannot be used to cure diseases.
In 1928, British bacteriologist Alexander Fleming inadvertently discovered Penicillium, and experimentally inferred that metabolites during the growth of Penicillium can be effectively sterilized. He called this substance penicillin. In August 1940, the famous "Lancet" magazine published the results of the Australian pathology professor Howard Florey and the German biochemist Ersted Chann on the study of penicillin.
Fleming took the initiative to find the company to develop the drug, but was rejected by a number of companies including Johnson & Johnson. Until the then US President Roosevelt saw the relevant literature and announced who can take out the production of penicillin in the shortest time, who can get the US military drug supply rights, this big business opportunity stimulated the major pharmaceutical companies in the United States, the situation Changed.
At the time, there were three major pharmaceutical companies involved in the competition: Pfizer, Merck (now Merck) and Bristol-Myers Squibb.
Among them, Pfizer relied on the fermentation technology for preparing citric acid, and did not hesitate to occupy the deep-tank fermentation equipment for producing citric acid, and first found the correct mass production method of penicillin. In December 1941, Penicillin officially became the munition of the US government, and the world's first penicillin plant was announced on March 1, 1943. In 1945, Pfizer produced by Pfizer already accounted for half of global production.
At the end of the Second World War, Pfizer, which has penicillin supply rights, has expanded in size by a hundredfold. Until now, the anti-infective field is still Pfizer's strength. Pfizer sold its former citric acid business in 1990, investing more than $1 billion in research and development in the mid-1990s, and developed antidepressant Zoloft, antihypertensive drug active and well-known "blue" Color pills "Wan Ai Ke and other new drugs.
In addition to Pfizer, other pharmaceutical companies are also catching up. After penicillin, Eli Lilly hopes to find a better antibiotic, eventually discovering the first cefotaxime and introducing more cephalosporin preparations. Its second-generation cephalosporin product, cefaclor, is still one of the best-selling antibiotics.
The case of penicillin has enabled pharmaceutical companies to finally realize that developing small quantities of effective drugs is far more profitable than a large but small number of products. Thus, after the end of World War II, the pharmaceutical industry ushered in a golden age.
Pharmaceutical companies have begun to build R&D institutions and work closely with universities and colleges. Throughout the history of the development of world-renowned pharmaceutical companies, almost all of the varieties and sales of new drugs introduced in World War II or after the end of World War II have brought profits and visibility to enterprises.
Especially in the United States, during the Second World War, the R&D advantage in the international pharmaceutical industry was transferred to the United States. From 1941 to 1963, 60% of new drugs were born in the United States, and the others were mainly Switzerland, Germany, and the United Kingdom. Nowadays, among the world-renowned medicines, the backbone forces are basically from these countries, such as Novartis and Roche in Switzerland, GlaxoSmithKline and AstraZeneca in the United Kingdom, Pfizer, Johnson, Merck, Eli Lilly and Bristol-Myers Squibb in the United States.
A large number of gaps in the field of disease have given pharmaceutical companies sufficient space to display. Statistics show that from 1954 to 1978, the annual return rate of new drugs was 20.9%, and research and development expenses usually accounted for 17%-18% of sales. The research and development enthusiasm of pharmaceutical companies was unprecedentedly high. The number of prescription drugs has also increased dramatically. In the US market, the market share of prescription drugs rose from 1/3 in 1929 to 4/5 in 1969.
R&D and patents have become the core competitiveness of pharmaceutical companies. The development of a best-selling new drug can bring considerable profits to pharmaceutical companies. Of course, in contrast, multinational pharmaceutical companies known for their original research drugs face a common problem – the patent cliff. After the patent protection of the original research drug expires, the enterprises that rely on patent protection to obtain sales and profits will plummet.
For example, Pfizer's Lipitor was once the best-selling drug in the world. In 2004, sales began to exceed $10 billion for seven consecutive years. However, after the expiration of US patents in 2011, generic companies have seized market space. In 2013, Pfizer’s Lipitor sales were only $2.3 billion.
In fact, the pharmaceutical industry was originally a relatively stable industry. After the development of World War II, pharmaceutical companies focused on undertaking new drug research and development and commercialization functions, and obtained an exclusive competitive business model, which has remained unchanged. However, the development cycle and cost of new drugs are not comparable to those of more than a decade ago.
At present, the more generally accepted statistical data is that it takes 10 to 15 years for a new drug to be developed from clinical phase 1 to phase 3, and the average drug needs to invest more than 1 billion US dollars. There are even studies that consider research and development expenses and investment losses during the same period. The cost of research and development of a new drug has reached 2.6 billion US dollars.
According to a report released by Deloitte, one of the world's four largest accounting firms, at the end of 2014, the world's top 12 giants have launched 143 products since 2010, with an expected lifetime income of $955 billion. During the same period, 236 assets were advanced to the later stage of development, with an expected lifetime income of $117.1 billion. The cost of developing a new drug continues to rise, up from $1.401 billion in 2014.
The 12 giants included in the Deloitte report include Pfizer, Roche, Novartis, Sanofi, GlaxoSmithKline, Johnson & Johnson, AstraZeneca, Merck, Lilly, Bristol-Myers Squibb, Takeda, and Amgen.
The global pharmaceutical industry is indeed a "major war." According to the published data, the top 10 of the world's 50 mandatory drug companies accounted for more than 50% of the total sales revenue of 50 companies, and the R&D investment accounted for about 60% of the total investment.
After focusing on research and development, the clinical research of pharmaceutical companies has begun to become more standardized. Modern pharmaceutical clinical research requires the human body to test drugs. At first, there was no law to regulate human body drugs. The military and prisoners who obey orders have become the primary group of drugs. Many important antibiotics and vaccines were first tested in the military, and prisoners in German Nazi concentration camps during World War II were often used to test antibiotics.
After the end of World War II, the drug scandals in the Nazi concentration camps led people to face up to the norms of human trials. In June 1964, the World Medical Association Joint Conference published the Helsinki Declaration, which is used to guide doctors and others involved in medical research involving human subjects. (奇健生物