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Abstract: Drug discovery and development in
recent years is posing a great challenge to
pharmaceutical companies. With escalating costs of drug
discovery and diminishing product pipelines,
pharmaceutical companies are always looking for newer
avenues to fill the drying pipeline. Various strategies
are adopted by companies ranging from mergers and
acquisitions to licensing deals with small research
based organizations. Pharmaceutical companies have
realized that traditional model of drug discovery and
development is risky and uncertain. In order to reduce
the risk and uncertainty pharmaceutical companies are
looking towards biotechnology, which seems a promising
proposition to these companies. In the western world
many big pharmaceutical companies have tied up with
small biotech companies and various institutes for
research related to drug discovery that is based on the
concept of biotechnology. So, pharmaceutical
biotechnology is one area where the companies have seen
a ray of hope in terms of successful drug discovery.
Some companies have even launched products that are
purely an outcome of biotechnology based research.
Introduction
Biotechnology has been frequently referred as the
technology of 21st century along with Information
Technology. Modern Biotechnology has already made
significant contribution to the health and agriculture
sector. During the first half of the twentieth century,
bench chemistry was the sole method of creating new
drugs. Discovery and preclinical development was
conducted with biology providing animal models for
pharmacological and toxicological evaluation, while
chemistry produced and modified small sets of compounds
to improve symptoms in the animal models of disease.
Recent advancements in the once seemingly unrelated
fields of molecular biology, chemistry, and computer
science, are changing the way we look for new drug
compounds. The core of identifying potential new drugs,
however, remains the same, following two phases. Phase
one, or discovery, focuses on identifying disease
targets and developing chemical compounds that produce a
desired biological effect on a specific target.
Development of several drugs, various pharmaceuticals,
vaccines using recombinant DNA technology has given rise
to multi billion dollar industry. So far the drug
development revolved around new chemical entities and a
serious consideration was not given to biotechnology
sector until 1980. This implies that the biotechnology
industry is relatively young. New biologic entities were
first introduced in the 1980s. By 1994, only 29 new
biologic entities had been introduced into the U.S.
market, but this number has increased dramatically since
then. In this regard, 41 new biological introductions
occurred between 1995 and 2001. Further, DiMasi et al
has identified that the clinical phase development for
biotech and pharmaceutical products were similar.
Drug Development
R&D accounted for 15.6% of global sales in 2000 for the
US research-based pharmaceutical industry, compared to
10.5% for computer software, 8.4% for electrical and
electronics firms and 3.9% for U.S. companies overall,
excluding drugs and medicines. The average R&D cost per
new chemical entity (NCE) brought to the market is
estimated at US$ 802 million (DiMasi et al., 2003).
Danzon states that the cost per NCE is high for three
reasons: high input costs for both drug discovery and
drug development, including human clinical trials that
are required by the Food and Drug Administration (FDA)
to establish proof of safety and efficacy; the time
value of money considering that it takes 12–15 years to
advance a drug from discovery through regulatory
approval (see figure1); and high failure rates. Despite
faltering investor confidence, development of
biotechnology products has surged to the point where one
quarter of all drug development is now biotech-based.
Whereas a few years ago biotech accounted for just 15%
of drugs in R&D, this has risen steadily to the 2002
figure of 25%.
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