Three Key Challenges Facing the Pharmaceutical Industry in 2014

Background

The Pharmaceutical Industry (pharma) is one of Europe's leading high-technology sectors. Data for 2012 reveal that in that year alone the pharmaceutical industry invested almost £25 million in R&D. Indeed, R&D investment by big pharma has shown a year-on-year increase and investment is up by approximately one third compared to 2005. Over 700,000 people are employed directly in European pharma but hundreds of thousands more are indirectly employed in related occupations including transport, legal services and health and safety (1). The value of pharma to the European economy in years to come therefore cannot be underestimated.

R&D

Nevertheless, like most industries operating in uncertain financial climates over the past decade, pharma is not immune from its share of problems. The R&D process remains risky and expensive. As an example, less than one in every 10 compounds subjected to clinical clinical trials will be approved for clinical use. The time taken from initial development to final approval is approximately 14 years. Despite increased investment, the number of New Drug Applications (NDA) has seen a steady decline over the past 20 years. In the US the number of new drugs approved by the FDA has also decreased gradually, due in part to more stringent safety assessments (2). This leads to a vicious circle whereby big pharma companies spend more resources on pre-clinical testing and are more reluctant to submit applications to the FDA owing to the high costs involved if the compound fails. Biotechnology will play a key role in improving safety by enhancing the efficacy of delivery methods for the compound. One salient example where this may reap rewards is in the development of antibody-coated nanoparticles containing chemotherapeutics to improve tumour cell targeting and minimise toxicity to normal tissue.

Generics

Another major issue facing pharma is the expiry of patents on a number of recognised drugs that ultimately leads to generic drugs emerging from rival companies. These companies incur less expense in simply manufacturing a drug which has already been approved. The benefits of generics to the healthcare industry are clear: the use of generics saved the US health system $217 billion in 2012 (3). Nevertheless, a number of high profile drugs including Lipitor and Glucophage have patents that have expired in the last few years and the cost to individual companies is enormous. Moreover, the issue of counterfeit medicines in developing countries remains a problem. One estimate suggests that around one-third of drugs issued to patients in some areas are counterfeit (4). The pharmaceutical industry together with national security forces and health regulatory agencies will have a key role to play to reduce trade in illegal drugs.

Public Profile

In the UK, public perception of the pharmaceutical industry as a whole is positive with 34% of respondents in one poll saying they felt positive about the industry, despite less than 10% having familiarity with it. Although the social and economic benefits of pharma are widely acknowledged, the major concern among the public is that the pharma companies are seen as untrustworthy. Less than 20% of respondents identified the pharmaceutical industry as trustworthy. Among the concerns raised were the making of excessive profits in times of recession, the poor response of companies to drug-related adverse events and the perceived influence pharma companies have over clinicians prescribing choices (5). What would be the benefits for the pharma industry in improving their public reputation? Firstly, a good reputation would inspire more budding scientists and entrepreneurs to consider a career in the industry. Also, a good public persona would facilitate collaborations with other sectors including IT and charities. In my opinion, pharmaceutical companies should publicly emphasise the important international programmes and charitable grants they contribute towards and highlight the impact of their research in improving global health.

 References

1. Data from European Federation of Pharmaceutical Industries and Associations (EFPIA) to be found here
2. Data from Food and Drug Administration (FDA) to be found here
3. Data from Pharmaceutical Care Management Association (PCMA) to be found here
4. Data from The Guardian to be found here
5. Data from YouGov to be found here