Research and development

Innovation is the spine of research and drug development

Drug research and development is a very risky, costly and long-term business. For a new kind of medication to be created, scientists must find thousands of new compounds. A brief example: from 10 thousand newly discovered compounds, only 250 of them get into the pre-clinical phase. Then only an insignificant number of those compounds get into clinical testing and only one of five tested drugs gains registration and is transferred into the market. The number of newly discovered efficient compounds is not really large and it is even decreasing in the long-run. While ten years ago, over 40 new compounds were introduced to the market, in the last few years it is about 10 less.

This large level of unsuccessful, larger clinical studies, increasing technical heftiness of products and an all time rising demand for security and effectiveness of a new medication also introduced the main reason for the raise of drug research and development costs. For comparison: verification of a new drug in the year 1960 took only about 6 years, whilst in the present day it takes about 10 to 12 years. Today, the development of one new drug costs about one billion US dollars, which is basically the same as a quarter of year expenses for drugs in the Czech Republic. Nevertheless, only one out of three newly introduced medications pays for the average cost of new drug research and development.

The research and development of new medications is continuing. Not long ago it was supported by the guidelines of the European Union, which placed conditions for research and development of new drugs that are used in pediatrics. Therefore, doctors can prescribe medication to children that completely fit their needs.

Innovative drugs are protected by patents or data protection. That should be a guarantee for the manufacturer that the expenses for the medications shall come back and new drug research can continue. The patent protection officially lasts 20 years. However, guaranteed exclusivity is much shorter. The active substance within the drug must be protected by a patent in the first phase of development, when it is not yet available to patients. The real exclusivity of a certain drug on the market therefore lasts only 8 to 10 years.

Manufacturers watch the security and effectiveness of the drug even after it is placed on the market. It can happen, that new indication of the drug can be discovered, which could mean a turnover in the research. For example, Aspirin: previously meant for decreasing pain and fever is today used also for preventing cardiovascular diseases.

Innovative pharmaceutical industry

Research in the pharmaceutical industry brings us not only a medical progress and better conditions for patients. It is also the creator of economic values. It belongs to a desired and technologically challenging branch with a high added value. It creates work places for highly qualified experts. More than a hundred thousand workers are engaged in research and development of new drugs in Europe.

The Worldwide pharmaceutical industry is divided into three traditional centres: Europe, United States of America and Japan. Currently, drug research and development is evolving in China and India. Even though at the beginning of the 90’s (20th century) the world-wide production of pharmaceutics was lead by Europe. The United States of America is close to becoming the centre of pharmaceutical industry today. They represent almost half of the Worlds medication sales (47.7 %), whilst Europe supplies 30 % (source: EFPIA 2006).

The core of drug research and development was also moved to the United States. Today, almost two thirds of the drugs that are introduced to the market come from the US. Europe, in comparison with the US, is held back by its division into many states and its individual regulatory systems. It is also behind in investments into research from public funds. While in the USA investment rose between the years 1990 and 2006 five times, in Europe it was only 2.9 times. A larger awareness of patients and altogether higher funding of the pharmacy industry has an significant influence on the increasing US market.

The position of the pharmaceutical industry in Europe is still strong. It represents the second largest industrial branch in the countries of Western Europe; its production has increased 5 times in the last 20 years. Also, the second largest number of private investments into research and development (18,5 %) falls here. Which puts the pharmaceutical branch behind the IT branch and in front of the automotive branch (source: EFPIA 2005). In cross-sector comparison it is even the first in the share of investment into research and development on general revenue. France, Great Britain, Germany, Italy, Ireland and Switzerland belong to the largest European producers. By initiation of innovative drugs, the European Commission is trying to support the conditions for the research-oriented pharmaceutical industry in Europe.

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