Big Pharmaceuticals – Whose Interests

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Why is Big Pharma doing so well?

The health problems that we face are becoming increasingly alarming. In Third World countries, people are dying from rampant diseases such as HIV/AIDS and Malaria. In the absence of good nutrition, sanitation and well-established health care system, people rely on medical guidance and treatment brought in by external help to survive against these major diseases.

On the other hand, in the more developed world, people are facing ‘first-world problems’ such as diabetes and obesity. Furthermore, as people become more health-conscious, the demand for so-called alternative medicines and nutritional supplements generate a plenty of new opportunities for pharmaceutical companies.

Thus, there is a huge demand for medicines for a wide range of purposes from curing dangerous diseases to meeting people’s whimsical needs to live a healthier life. Aware of such circumstances, pharmaceutical companies are taking advantage of them by increasingly over-medicalizing social problems. As a result, they are able to exploit these demands and prosper from the increased profits earned.

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Characteristics

The Big Pharma has two distinct functions: manufacturing, and research and development. Some firms are primarily engaged in manufacturing, and others concentrate on research and development.

One characteristic of the pharmaceutical industry is that it heavily invests in research and development, with a rapid pace of product innovation. For example, U.S. companies performed $40.7 billion in R&D in 2010, with nearly a double increase during the last decade. This high rate of investment has enabled the pharmaceutical industry to produce most of drugs introduced globally.

Another characteristic is the domination of a few companies as these companies are the ones that receive high rates of return from their investments in R&D. This implies that these few companies receive sufficient cash flow from clinical areas that have a larger pool of patients willing to pay higher prices for drugs. In the long run, the companies are able to cover the risks and costs of their investments. On the other hand, companies that tap into smaller markets or markets that are not capable of paying such high prices will rarely attract investments and quit the market.

Using their large market share, big pharmaceutical companies’ actions are purely profit driven instead of benefitting the society. They also avoid accountability for the detrimental effects on people, communities, and the environment.

According to Science Daily, a "study by two York University researchers estimates the U.S. pharmaceutical industry spends almost twice as much on marketing and promotion as it does on research and development." Although pharmaceutical companies rationalize high drug prices by quoting high R&D costs, the high drug prices are actually used to cover marketing and promotion costs ($33.5 billion). This information is however not exposed to the public. The mentioned study continues to accuse Big Pharma of targeting consumer’s habits and demands instead of valuing patients’ lives. The study proves that Big Pharma is essentially market-driven which contradicts the life-saving and research-driven image it presents to the public.

Although people are heavily reliant on Big Pharma, the overall health situation in societies has not improved because Big Pharma never fully carries out their corporate social responsibilities, as it is so profit-driven.

Process

Developing a drug

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On average, the development of a new drug takes about 12 to 15 years and the success rate for the approval of a drug is an estimation of 1 out of 10,000. Majority of the applications do not make it out of the lab. The cost of producing a single new drug, including commercialization has also been estimated to range around $800 million to $1.7 billion USD. As there are numerous steps in involved, we will divide the entire process into 4 stages and look at them in greater detail.

Stage 1: Discovery

There are two main approaches that pharmaceutical companies take on when they are in the discovery phase. They will either decide to create a brand new drug to help tackle untreated diseases or they can choose to improve on an existing drug. If the decision is to create a brand new drug, researchers will first have to survey the environment to decide a drug target. Following, chemical compounds are designed to see if they can interact with the drug target effectively. If a compound has some form of reaction, researchers will assess whether the compound is suitable to be developed into a drug base on the quality and result of the reaction. This process is normally tedious and time consuming as the researchers constantly create and test compounds until they find suitable matches before proceeding to create a prototype of the drug.

Stage 2: Pre-clinical research

During pre-clinical research, the prototype of the drug is evaluated based on its perimeters, such as its biological compound and its enzymatic activity. The purpose of this stage is to identify the biological activities of the drug and assess its safety. The drug is normally tested on animals and data regarding the toxicity, speed of adsorption by the body, effect on the body and multiple other genotoxicity screenings are collected. Afterwards, a pharmacological profile of the drug is created based on different requirements demanded from different countries’ health authorities. The profiles will be used later by the regulatory bodies for assessment.

In the United States of America, the U.S. Food and Drug Administration (FDA) is body responsible for regulating all pharmaceutical drugs. During this phase, pharmaceutical companies are required to conduct toxicity studies over a period of weeks and submit the acute toxicity results on at least two animal species.

Stage 3: Clinical studies

Upon approval, the drugs will then be tested on human subjects. The purpose of clinical studies is to determine:

- The safety of the drug

- Identify possible adverse effects the drug might have on the body if consumed over a period of time

- The