The Pharmaceutical Industry and Innovation
Even in the crisis year of 2009, research-based pharmaceutical companies further increased their investment in research and development in Germany to its current amount of EUR 5.22 billion, or more than EUR 14 million a day! Few other industries are as research-intensive. Around 20 percent of these companies’ employees work in the area of research and development, many more than the average of R&D-based companies. 37 new substances were launched onto the market, the highest number since 1997, providing for important medical progress, such as improvements in the treatment of rheumatism and some types of cancer. Germany remains a valued research location worldwide: We are number 1 in Europe in terms of the number of clinical trials and are surpassed only by the USA on a global level.Market Launches of New Molecular Entities in Germany 2009
37 pharmaceuticals based on new NMEs (new substances known internationally as New Molecular Entities) were launched in
the German market in 2009 – the highest number since 1997. Because of the global research process, the number of such
substances launched in Germany is closely connected to the international development of pharmaceuticals. Unless they are of merely regional importance, most new NMEs receive marketing authorization as soon as possible in all key countries. This
is the only way to balance the costs for research and development of an NME, which globally amount to USD 800 million on
average, within its limited patent term.
New Molecular Entities and their Applications 2008
In 2009 research-based pharmaceutical companies once again facilitated important progress in medicine by creating new
drugs, e.g. for the treatment of rheumatism and some types of cancer. For the first time, the five new vaccines launched included one against Japanese encephalitis. These five drugs will be used to treat rare diseases such as phenylketonuria and Muckle-Wells syndrome. Research-based pharmaceutical companies launched a total of 37 new molecular entities this year, the highest number since 1997, as well as another 19 drugs based on existing active
ingredients, which are delivered in a new dosage form. In the form of a nasal spray, a powerful pain reliever can now offer relief within just a few minutes and an HIV medication is now available as a drinking solution suitable for administering to children.
Pharmaceutical Projects by vfa Member Companies Promising Success by 2013
The vfa member companies are working on thousands of drugs. Pharmaceutical projects for medications to treat some 110 diseases have progressed so far that they could lead to marketing authorization by the end of 2013. Most of these projects target cancer (31 percent), cardiovascular diseases (13 percent) and infectious diseases (14 percent) but a particularly large number of drugs are also being developed against inflammatory diseases such as rheumatoid arthritis and type 2 diabetes (adult-onset diabetes). A total of 97 percent of the projects are concerned with severe diseases, some of them life-threatening; only three percent address less serious physical disorders such as incontinence or menopausal discomfort.
Marketing Authorizations for Orphan Drugs in the European Union
Since the start of 2000, companies have been able to apply for “Orphan Drug” status for a drug being developed in Europe if it is for treating a disease affecting no more than one in 2,000 EU citizens. With this status comes lower marketing authorization fees, free scientific consulting and exclusive marketing rights, usually for ten years. Whereas on average only one drug for treating a rare disease (Orphan Drug) received marketing authorization every year before the regulation came into force, the figure is now much higher. A total of 60 Orphan Drugs have now received marketing
authorization in the EU and over 700 more are being developed (as of July 2010). The Orphan Drug Regulation is therefore a good example of how meaningful political regulatory activity can boost pharmaceutical research in areas society deems important.
Development Costs for a new Pharmaceutical
In 2001, an average of USD 800 million was required for the research and development of a new drug with a new molecular entity. More than half of these costs are spent on clinical development, especially the logistically expensive, multinational phase-III studies. The requirements involved in proving a new drug’s safety, efficacy, tolerability and quality during the marketing authorization process have increased steadily. A further
reason for the high increase in costs lies in the growing complexity of the diseases treated. Examples include multiple sclerosis and Parkinson’s disease, for which researchers must take into account many physical processes simultaneously to identify possibilities for risk-free pharmaceutical therapy.
R&D Expenditures of the vfa Member Companies
Research-based pharmaceutical companies in Germany again intensified and expanded their research and development (R&D) activities involving new pharmaceuticals in 2009. R&D expenditure increased to EUR 5.2 billion, which corresponds to over EUR 14 million a day. As a result, not just volume but also research intensity increased, despite the global financial and economic crisis. At 4.4 percent, R&D expenditure grew more strongly than sales (3.6 percent). A higher proportion of sales, 13.7 percent, was invested in R&D activities than in the previous year. Although pharmaceutical products make up only 2.4 percent of the German industry’s sales, research-based pharmaceutical companies contributed more than 10 percent of R&D spending
in 2009.
Research Intensity: A Comparison
The research and development of new drugs is highly cost and labor intensive. The research intensity of vfa member companies continued to grow in 2009. A higher share of sales, 13.7 percent, was invested in R&D activities than in the previous year (13.6 percent). The proportion of R&D employees of all vfa company
employees increased to 20 percent (from 19.7 percent in the previous year), which means one in five employees now works in this area. The R&D intensity of vfa companies thus remains much higher than that of other companies conducting R&D in Germany overall, which achieve a sales rate of 3.9 percent and an employee rate of 7.9 percent (2007, most recent available data).
R&D Expenditures in Europe, Japan and the USA
The R&D expenditure of pharmaceutical companies in Europe, Japan and the USA increased to almost USD 90 billion in 2008. Calculated in local currency, R&D expenditures in the USA and Japan have risen more strongly than in Europe. 40 percent of global R&D outlays continue to be made in the USA.
Patent Applications for Genetically Manufactured Pharmaceuticals
10,289 patents were registered for pharmaceuticals in Germany in 2009. 1,028 applications (10 percent) were for genetically manufactured drugs. At the outset of the millennium, the proportion of these applications was 20 percent. Patent applications from the USA in particular have decreased. Patent applications from Germany have declined in absolute figures (2000: 183 applications, 2009: 111), but have been able to maintain their share of the total number. The number of patent applications from Japan and countries such as Switzerland, Sweden and Canada has grown considerably.
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