1. Innovation & the Pharmaceutical Research & Development Industry

2. Inventions

3. Research & Development (R&D) in Pharmaceuticals
DISCOVERY
Enzymes, receptors, & genetics,
DEVELOPMENT
Safety, quality and efficacy tests
PRODUCTION
Quality assurance
REGISTRATION
Medical and marketing approval
MONITORING
Physician and patient satisfaction
Longer than
10 years
More than
$800 m

4. Chronology of Drug Innovation
SOURCES/INNOVATIONS
cell pharmacology/
molecular biology
natural products
& derivatives
serendipity
receptors
enzymes
genetic
engineering
chronic de-
generative
disease
associated
with aging,
inflammation
cancer
biotech drugs
lipid lowerers
ACE inhibitors
H2-antagonists
beta blockers
NSAIDS
psychotropics
penicillins
sulphonamides
aspirin
NEW THERAPEUTIC CYCLES
Source: Lehman Brother Pharmaceutical Research

5. From discovery to patient
R & D in Pharma
From discovery to patient
Patent application
Acute toxicity
Pharmacology
Phase I clinical trials
Chronic toxicity
Registration and transparency
Phase II
Phase III
Reimbursement
Pharmacovigilance
Price
1 medicinal product
0 5 years 10 years 15 years 20 years
Patent expiry
Supplementary
Protection
SOUTH AFRICA?
10 years of research
2 to 3 years of administrative procedures
Source: “Recherche & Vie”, LIM (AGIM)

6. Discovery & development of a successful medicine
R&D: Scientific Risk
Discovery & development of a successful medicine
YEARS
PHASES IV
III II I 15 14 13 12 11 10 9 8 7 6 5 4 3 2 1
INTRODUCTION
/REGISTRATION
POST-MARKETING SURVEILLANCE 1
DEVELOPMENT 2
CLINICAL TEST (HUMANS)
2 - 5
5 - 10
PRECLINICAL TEST (ANIMALS)
BASIC
RESEARCH
SYNTHESIS,
EXAMINATION &
SCREENING
3,000 – 10,000
QUANTITY OF SUBSTANCES
Source: Based on PhRMA analysis, updated for data per Tufts Center for the Study of Drug Development (CSDD) database

7. Length of Drug Development
Total time from synthesis to approval
15.3
14.2
11.6
8.1
Source: Tufts CSDD, NCE Database, 1995

8. Cost of Drug Development
U of Rochester Tufts OTA Myers & Howe Tufts
Source: R Hansen, PhD, University of Rochester; J.A. DiMasi, Tufts University; Office of Technology Assessment, Myers & Howe, 1997;
Tufts Center for the Study of Drug Development All figures except 2001 reflect impact of inflation as measured by the GDP Deflator.

9. Drug Development Costs vs Returns: 1980’s Study
AVERAGE PV OF RETURNS:
$224 MM
AVERAGE R&D COSTS:
$202 MM
Source: Grabowski and Vernon, “Returns to R&D on New Drug Introduction in the 1980’s.” Journal of Health Economics Vol. 13, (November 1994):

10. Innovation of the Pharmaceutical Industry
PATENTED BY:
Source: PhRMA Survey; Center for the Study of Drug Development, Tufts University (1991)

11. Pharmaceutical Research and Development Process
1 in 5,000 compounds make it to market
Takes 12 to 15 years from discovery to launch
Average cost of nearly $800 million

12. Benefits of Pharmaceutical Research and Development
Prevent and treat disease
Reduce costly hospitalization, nursing home stays and surgeries
Return patients to productive lives

13. Benefits of Pharmaceutical Research and Development
Antibiotics and vaccines have virtually wiped out diptheria, syphilis, whooping cough, measles and polio in many parts of the world
8 out of 10 children can now survive leukemia
Over the past 30 years, medicines have helped reduce heart disease and stroke by half for many populations

14. Worldwide Drug Research Continues
96 new drugs for heart disease and stroke
316 anti-cancer medicines
122 drugs to treat AIDS
146 drugs and vaccines for children
17 new treatments for Alzheimer’s disease
29 medicines for arthritis