The Pharmaceutical Industry and Innovation

New Molecular Entities in Germany
In 2008, 31 pharmaceuticals based on NMEs (new molecular entities) were launched in the German market. Based on the global research process, the number of substances launched in Germany is closely connected to the international development of pharmaceuticals. Unless their importance is merely local, most new molecular entities receive marketing authorization in all key countries. This is the only way to balance the costs for the research and development of an NME, which globally amount to USD 800 million on average, within its limited patent term.

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PDF JPG New Molecular Entities and their Applications 2008
In 2008, research-based pharmaceutical companies once again facilitated important progress in medicine based on new or novel pharmaceuticals, e.g. for the treatment of brain tumors or prostate cancer. Two new antibiotics also counteract bacteria that have become resistant to older antibiotics. Novel drugs in the form of capsules or tablets make injections for thrombosis prevention in orthopedic surgery obsolete. One pharmaceutical for epilepsy was developed especially for children. Overall, research-based pharmaceutical companies launched 31 pharmaceuticals with new molecular entities this year. Additionally, there were more than 40 drugs where known active ingredients were developed into a new dosage form, such as patches or lozenges melting in the mouth.

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PDF JPG Pharmaceutical Projects Promising Success by 2013 of the vfa Member Companies
The vfa member companies are working on thousands of drugs. Pharmaceutical projects for some 110 diseases have progressed so far that they may lead to marketing authorization by the end of 2011. Most of these projects will target cancer (26 percent), cardiovascular diseases (18 percent) and infectious diseases (15 percent). But a particularly large number of drugs are also being developed for inflammatory diseases such as rheumatoid arthritis and for type-2 diabetes (the so-called adult onset diabetes). A total of 93 percent of the projects are concerned with severe diseases, some of them even life-threatening while only seven percent address less severe health disorders such as the common cold or incontinence.

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PDF JPG Marketing Authorizations for Orphan Drugs in the European Union
Number
Marketing Authorizations for Orphan Drugs in the European Union
3 3
4 4
5
6
9
13
7¹
2
6
1
0
1 1
1996 1997 1998 1999 2000 2001
European Orphan Drug
Regulation effective
from 2000 onward
2002 2003 2004 2005 2006 2007 2008 2009
5
Source: vfa
¹ expected marketing authorizations (as of: June 2009)
Since the start of 2000, companies have had the opportunity to apply for “orphan drug status” for a pharmaceutical being developed in Europe, if said drug is for a disease that affects no more than one out of 2,000 EU citizens. With this status comes lower marketing authorization fees, free scientific consulting and exclusive marketing rights for a maximum of 10 years, among others. While only one orphan drug on average was approved per year prior to the regulation, this number has increased significantly. A total of 52 orphan drugs have received marketing authorization in the EU since 2000. More than 650 additional ones are being developed (as of June 2009). As a result, the Orphan Drug Regulation is a good example of how meaningful political regulatory activity can increase pharmaceutical research in areas desired by society.

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PDF JPG 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 expenditures are spent on clinical development, especially the logistically expensive, multinational phase III studies. The requirements with regard to proven safety, efficacy, tolerability and quality during the marketing authorization process have increased steadily. Another reason for the strong cost increase is the growing complexity of the diseases to be treated. Examples include multiple sclerosis or Parkinson’s disease for which researchers must take into account many physical processes simultaneously to identify possibilities for risk-free pharmaceutical therapy.

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PDF JPG R&D Expenditures of the vfa Member Companies
Once again, the research-based pharmaceutical companies in Germany intensified and expanded their research and development (R&D) activities for new pharmaceuticals in 2008. R&D expenditures were up 6.9 percent to EUR 4.84 billion, which corresponds to more than EUR 13 million per day. As a result, not just the volume increased significantly. Research intensity has grown as well. At 13.2 percent, a higher share of sales was invested in R&D activities than during the previous year (12.8 percent). Even though pharmaceutical products make up only about 2.5 percent of German industry sales, the research-based pharmaceutical companies contributed more than 10 percent of R&D spending in 2007. This share may have even increased in 2008.

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PDF JPG Research Intensity: A Comparison
The research and development of new pharmaceutical substances is highly cost and labor intensive. In 2008, the research intensity of the vfa member companies continued to increase. At 13.2 percent, a higher share of sales was invested in R&D activities than during the previous year (12.8 percent). The share of R&D employees in total employees at the vfa member companies also increased to 19.4 percent (previous year: 18.6 percent). This means that one out of five employees works in this area today.
As a result, the R&D intensity of the vfa member companies remains at a much higher level than in companies conducting R&D in Germany overall, which achieve a sales rate of four percent and an employee rate of eight percent (2005, last available data).

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PDF JPG R&D Expenditures in Europe, Japan and the USA
In 2007, the R&D expenditures of the pharmaceutical companies in Europe, Japan and the USA increased to more than USD 80 billion. This corresponds to a 61 percent increase since 2000 (adjusted for exchange rate fluctuations). Calculated in local currency, R&D expenditures in the USA (71 percent) and Japan (68 percent) have risen more strongly than in Europe (46 percent). Almost half of global R&D expenses continue to be made in the United States.

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PDF JPG Patent Applications for Genetically Manufactured Pharmaceuticals
In 2008, 11,425 patents were registered for pharmaceuticals in Germany, of which 1,232 applications (10.8 percent) were for genetically manufactured drugs. In 2001 and 2002, this share was still at 20 percent.

Since 1990, the share of patent applications from the United States has gone down slightly. Patent applications from Germany, which were at 16 percent in 2003, have decreased to under 10 percent (2008: 109 applications). Japan, whose share shrank to five percent in the meantime, recorded increases over the past few years and once more ranks higher than Germany with 150 applications. The “Other” category, whose share has increased significantly, is dominated by Switzerland, Sweden and Canada.

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