Why Companies Should Have Patents On Their Medications And How A Pharmaceutical Company Can Recover The Costs

This paper hopes to share insight into the steps that are taken by companies, and the strenuous process behind developing an effective new drug.

There are multiple health concerns worldwide and more and more drugs are needed every day. Many drugs however, are extremely expensive to develop, test, and produce. According to the Tufts Center for the Study of Drug Development (2002), it costs up to $802 million to bring a new drug to the market. In 2002, pharmaceutical companies spent $34 billion in research and development (Center-Watch, 2003). In addition to the costs, the overall time from the discovery to approve and market the drug can take up to 15 years.

Some pharmaceutical companies are feeling grief from a decline in research slump but the issues are more serious in reference to the United States intellectual property laws on which these same companies need to inflate their profits. Maybe the focus should be on an idea that came about several years ago. Give drug patents a shorter term of 15 years but don’t start the clock until the FDA approves the drug.

U.S. based companies hold rights to most of the world’s rights on new medicines and holds thousands of new products currently being developed. As of 2012, the industry helps support almost 3.4 million jobs in the U.S. economy. It is also one of the most heavily R&D based industries in the world. In the United States, the environment for pharmaceuticals is much friendlier than other countries around the world in terms of pricing ability and regulations. Both the Pharmaceutical and Biotechnology industries have experienced significant growth in the past year with year-over-year increases of 13.02% and 34.69% respectively. It is an even more striking when looking at the past five years considering both have beat out the S&P 500 with pharmaceuticals increasing an additional 31.44% and the biotechnology sector besting an astonishing 269.3% more return than the

Pfizer is the largest American pharmaceutical company and one of the largest pharmaceutical companies in the world. It competes with Merck and Glaxo, and markets such well-known medications as Celebrex and Viagra. However, the pharmaceutical industry as a whole has undergone changes in recent years with significant consolidation taking place and with increased scrutiny regarding the ways in which drugs are developed, tested and marketed. In addition, recent controversies have erupted regarding Merck's drug Vioxx, and Pfizer has been the target of unwanted publicity regarding its painkiller Celebrex. This research considers the strategic position of Pfizer, including its strengths and weaknesses as well

During preclinical drug development, the pharmaceutical company or drug sponsor must determine if the product is viable for human uses. The sponsor must test the new drug on multiple species of animals in vivo and in vitro to assess the drug toxicity and pharmacologic effects. Animal studies could take 2 weeks to 3 months to collect basic information about the safety and efficacy of the drug.

After all research has been conducted including the testing of all animal and human studies associated, the New Drug application is completed by the drug developer. The results provided are used by the FDA to determine whether the drug is approved or the recommendation of further testing. Finally phase four is based on the monitoring of the drug’s risks and benefits monitored by various sponsors hired by the FDA.

extensive lead time to schedule meetings and review data with insurers—data that had to be

The main purpose of creating the drug patent is to achieve market exclusivity for the product created. With only select brands of the same drug available it is much easier to market and sell the product. Companies are able to determine their price which allows them to achieve maximum profit. The importance of making a large profit in the pharmaceutical industry is that drug-testing and clinical trials are extremely expensive. In many cases the profit gained by selling expensive products will be allocated for future endeavors such as the creation of a future drug, or of the improvement of the drug already on the market. New research is done every day to find the new miracle drug that will fix whatever illness is at hand (FDA). If the selling price exceeds the production cost, the pharmaceutical companies will continue to receive a large profit. Often the company will choose to continue their research, making advancements to the existing drug, that way it can

Preclinical testing begins with identifying the ideal drug target. The target should be disease-modifying and/or have a proven function in the pathophysiology of the disease. Target expression should not be uniformly distributed throughout the body. There should also be a

In the first year it generated revenues of 67.8$ billion and net income of 8.26$ billion. (philippidis, 2011)Pfizer is the largest player in the pharmaceutical market having the best power in marketing and forming associations. It also posts the highest dividends in the industry. Pfizer faces challenges common to all pharmaceutical companies such as patent expiration and FDA regulation. It is dedicated to applying science and global resources to progress health and well-being at every stage of life. Subsidiary members are Agouron pharmaceuticals, G.D Searle & company, Greenstone, Park- Davis, Wyeth, Pharmacia, Upjohn, Warner &lambert. (control, 2011)

Therefore, protection of patents is one of the key conditions necessary for further development of the pharmaceutical industry. At the same time, non-efficient legislation that does not provide the necessary level of patent protection is one of the factors that hamper expansion of “Big Pharmaceutical” companies to the developing countries8.

The concept of product patent for pharmaceutical products is likely to make life saving medicine beyond the reach of the poor and deprived section of the society around the world.

This report provides an analytical strategic review of the global pharmaceutical industry; its origin, evolution,

Although R&D has been retained by the large pharmaceutical firms, there has been a continuous decline in the R&D productivity. Controlling R&D is imperative to the success of a Pharmaceutical firm. However, as the pharmaceutical industry is maturing, there are diminishing returns to the R&D investment. Fewer and fewer blockbuster drugs are being discovered and therefore R&D is not the most value adding component in the value