Pharmaceutical company
560876
225645554
2008-07-14T18:35:57Z
66.6.80.49
/* Sales leaders */
A '''pharmaceutical company''', or '''drug company''', is a commercial business whose focus is to research, develop, market and/or distribute [[medication|drugs]], mostly in the context of [[healthcare]].<ref>John L. McGuire, Horst Hasskarl, Gerd Bode, Ingrid Klingmann, Manuel Zahn "Pharmaceuticals, General Survey" Ullmann's Encyclopedia of Chemical Technology" Wiley-VCH, Weinheim, 2007.DOI: 10.1002/14356007.a19_273.pub2</ref> They can deal in [[Generic drug|generic]] and/or [[brand]] medications. They are subject to a variety of laws and regulations regarding the patenting, testing and marketing of drugs.
==History==
The earliest [[Pharmacy|drugstores]] date back to the [[Middle Ages]]. The first known drugstore was opened by [[Islamic medicine|Arabian pharmacists]] in [[Baghdad]] in 754,<ref>S. Hadzovic (1997). "Pharmacy and the great contribution of Arab-Islamic science to its development", ''Medicinski Arhiv'' '''51''' (1-2), p. 47-50.</ref> and many more soon began operating throughout the [[Islamic Golden Age|medieval Islamic world]] and eventually medieval [[Europe]]. By the 19th century, many of the drug stores in Europe and [[North America]] had eventually developed into larger pharmaceutical companies.
Most of today's major pharmaceutical companies were founded in the late 19th and early 20th centuries. Key discoveries of the 1920s and 1930s, such as [[insulin]] and [[penicillin]], became mass-manufactured and distributed. Switzerland, Germany and Italy had particularly strong industries, with the UK, US, Belgium and the Netherlands following suit.
Legislation was enacted to test and approve drugs and to require appropriate labeling. Prescription and nonprescription drugs became legally distinguished from one another as the pharmaceutical industry matured. The industry got underway in earnest from the 1950s, due to the development of systematic scientific approaches, understanding of human biology (including [[DNA]]) and sophisticated manufacturing techniques.
Numerous new drugs were developed during the 1950s and mass-produced and marketed through the 1960s. These included the first oral contraceptive, "The Pill", Cortisone, blood-pressure drugs and other heart medications. MAO Inhibitors, [[chlorpromazine]] (Thorazine), [[Haldol]] (Haloperidol) and the tranquilizers ushered in the age of psychiatric medication. [[Valium]] (diazepam), discovered in 1960, was marketed from 1963 and rapidly became the most prescribed drug in history, prior to controversy over dependency and habituation.
Attempts were made to increase regulation and to limit financial links companies and prescribing physicians, including by the relatively new US [[FDA]]. Such calls increased in the 1960s after the [[thalidomide]] tragedy came to light, in which the use of a new tranquilizer in pregnant women caused severe birth defects. In 1964, the World Medical Association issued its [[Declaration of Helsinki]], which set standards for clinical research and demanded that subjects give their informed consent before enrolling in an experiment. Phamaceutical companies became required to prove [[efficacy]] in clinical trials before marketing drugs.
Cancer drugs were a feature of the 1970s. From 1978, India took over as the primary center of pharmaceutical production without patent protection.{{Fact|date=September 2007}}
The industry remained relatively small scale until the 1970s when it began to expand at a greater rate.{{Fact|date=September 2007}} Legislation allowing for strong patents, to cover both the process of manufacture and the specific products, came in to force in most countries. By the mid-1980s, small biotechnology firms were struggling for survival, which led to the formation of mutually beneficial partnerships with large pharmaceutical companies and a host of corporate buyouts of the smaller firms. Pharmaceutical manufacturing became concentrated, with a few large companies holding a dominant position throughout the world and with a few companies producing medicines within each country.
The pharmaceutical industry entered the 1980s pressured by economics and a host of new regulations, both safety and environmental, but also transformed by new DNA chemistries and new technologies for analysis and computation.{{Fact|date=September 2007}} Drugs for heart disease and for AIDS were a feature of the 1980s, involving challenges to regulatory bodies and a faster approval process.
[[Managed care]] and [[Health maintenance organization]]s (HMOs) spread during the 1980s as part of an effort to contain rising medical costs, and the development of preventative and maintenance medications became more important. A new business atmosphere became institutionalized in the 1990s, characterized by mergers and takeovers, and by a dramatic increase in the use of contract research organizations for clinical development and even for basic R&D. The pharmaceutical industry confronted a new business climate and new regulations, born in part from dealing with world market forces and protests by activists in developing countries. [[Animal Rights]] activism was also a problem.
Marketing changed dramatically in the 1990s, partly because of a new consumerism.{{Fact|date=September 2007}} The Internet made possible the direct purchase of medicines by drug consumers and of raw materials by drug producers, transforming the nature of business. In the US, Direct-to-consumer advertising proliferated on radio and TV because of new FDA regulations in 1997 that liberalized requirements for the presentation of risks. The new antidepressants, the SSRIs, notably [[Fluoxetine]] (Prozac), rapidly became bestsellers and marketed for additional disorders.
Drug development progressed from a hit-and-miss approach to rational drug discovery in both laboratory design and natural-product surveys. Demand for nutritional supplements and so-called alternative medicines created new opportunities and increased competition in the industry. Controversies emerged around adverse effects, notably regarding [[Vioxx]] in the US, and marketing tactics. Pharmaceutical companies became increasingly accused of [[disease mongering]] or over-medicalizing personal or social problems.<ref name="Moynihan">Ray Moynihan and Alan Cassels (2005). ''Selling Sickness: How Drug Companies are Turning Us All Into Patients''. Allen & Unwin. New York. ISBN 1741145791</ref>
There are now more than 200 major pharmaceutical companies, jointly said to be more profitable than almost any other industry, and employing more political lobbyists than any other industry.[http://www.publicintegrity.org/rx/report.aspx?aid=723] Advances in biotechnology and the human genome project promise ever more sophisticated, and possibly more individualized, medications.
==Research and development==
{{main|Drug discovery|Drug development}}
'''Drug discovery''' is the process by which potential [[medications|drugs]] are discovered or designed. In the past most drugs have been discovered either by isolating the active ingredient from traditional remedies or by [[serendipity|serendipitous]] discovery. Modern [[biotechnology]] often focuses on understanding the [[metabolic pathway]]s related to a [[disease]] state or [[pathogen]], and manipulating these pathways using [[molecular biology]] or [[Biochemistry]]. A great deal of early-stage drug discovery has traditionally been carried out by universities and research institutions.
'''Drug development''' refers to activities undertaken after a compound is identified as a potential drug in order to establish its suitability as a medication. Objectives of drug development are to determine appropriate [[Formulation]] and [[Dosing]], as well as to establish [[drug safety|safety]]. Research in these areas generally includes a combination of [[in vitro]] studies, [[in vivo]] studies, and [[clinical trials]]. The amount of capital required for late stage development has made it a historical strength of the larger pharmaceutical companies.{{Fact|date=August 2007}}
Often, large multinational corporations exhibit [[vertical integration]], participating in a broad range of drug discovery and development, manufacturing and quality control, marketing, sales, and distribution. Smaller organizations, on the other hand, often focus on a specific aspect such as discovering drug candidates or developing formulations. Often, collaborative agreements between research organizations and large pharmaceutical companies are formed to explore the potential of new drug substances.
=== The cost of innovation ===
Drug discovery and development is very expensive; of all compounds investigated for use in humans only a small fraction are eventually [[Approved drugs|approved]] in most nations by government appointed medical institutions or boards, who have to approve new drugs before they can be marketed in those countries. Each year, only about 25 truly novel drugs ([[New chemical entities]]) are approved for marketing. This approval comes only after heavy investment in [[pre-clinical development]] and [[clinical trial]]s, as well as a commitment to ongoing [[safety monitoring]]. Drugs which fail part-way through this process often incur large costs, while generating no revenue in return. If the cost of these failed drugs is taken into account, the cost of developing a successful new drug ([[New chemical entity]] or NCE), has been estimated at about 1 billion USD<ref>[http://csdd.tufts.edu/Research/Milestones.asp Tufts Center for the Study of Drug Development]</ref>(not including marketing expenses).
A study by the consulting firm [[Bain & Company]] reported that the cost for discovering, developing and launching (which factored in marketing and other business expenses) a new drug (along with the prospective drugs that fail) rose over a five year period to nearly $1.7 billion in 2003.<ref>''Has the Pharmaceutical Blockbuster Model Gone Bust?'', [[Bain & Company]] press release, December 8, 2003. [http://www.bain.com/bainweb/publications/printer_ready.asp?id=14243 Press release]</ref>
These estimates also take into account the [[opportunity cost]] of investing capital many years before revenues are realized (see [[Time-value of money]]). Because of the very long time needed for discovery, development, and approval of pharmaceuticals, these costs can accumulate to nearly half the total expense. Some approved drugs, such as those based on re-formulation of an existing [[active ingredient]] (also referred to as [[Line-extension]]s) are much less expensive to develop. The consumer advocacy group Public Citizen suggests on its web site that the actual cost is under $200 million, about 29% of which is spent on FDA-required clinical trials. For me-too-drugs and for generics, the cost are even less.
Calculations and claims in this area are controversial because of the implications for regulation and [[subsidization]] of the industry through federally funded research grants.
===Controversy about drug development and testing===
There have been increasing accusations and findings that clinical trials conducted or funded by pharmaceutical companies are much more likely to report positive results for the preferred medication.<ref>{{cite web|url=http://www.ncbi.nlm.nih.gov/entrez/query.fcgi?cmd=retrieve&db=pubmed&list_uids=14970094&dopt=Abstract|title=Association between industry funding and statistically significant pro-industry findings in medical and surgical randomized trials|publisher=[[PubMed]]|author=Bhandari M, Busse JW, Jackowski D, Montori VM, Schunemann H, Sprague S, Mears D, Schemitsch EH, Heels-Ansdell D, Devereaux PJ|date=[[2004-02-17]]|accessdate=2007-05-24}}</ref>
In response to public outcry about specific cases in which unfavorable data from pharmaceutical company-sponsored research was suppressed, the [[Pharmaceutical Research and Manufacturers of America]] have published new guidelines urging companies to report all findings and limit the financial involvement in drug companies of researchers.<ref name="moynihanbmj"/> As a result of this public outcry and PhRMA response the US congress signed into law a bill which requires phase II and phase III clinical trials to be registered by the sponsor on the NIH website [http://www.clinicaltrials.gov clinicaltrials.gov |rel="nofollow"]. <ref> {{cite web|url=http://www.hhlaw.com/files/Publication/edbf3429-125c-41c9-9442-b552e69b756c/Presentation/PublicationAttachment/972a9053-8c8d-46e4-ac96-ecf4892a8643/Pharma.pdf |title=Hogan & Hartson Update on Pharmaceutical Trial Registration |accessdate=2008-06-02 |publisher= |date=2008-03-03}} </ref>
Drug researchers not directly employed by pharmaceutical companies often look to companies for grants, and companies often look to researchers for studies that will make their products look favorable. Sponsored researchers are rewarded by drug companies, for example with support for their conference/symposium costs. Lecture scripts and even journal articles presented by academic researchers may actually be 'ghost-written' by pharmaceutical companies.<ref>{{cite web|url=http://observer.guardian.co.uk/uk_news/story/0,6903,1101680,00.html|title=Revealed: how drug firms 'hoodwink' medical journals|publisher=[[The Observer]]|author=Barnett, Antony|date=[[2003-12-07]]|accessdate=2007-05-24}}</ref> Some researchers who have tried to reveal ethical issues with clinical trials or who tried to publish papers that show harmful effects of new drugs or cheaper alternatives have been threatened by drug companies with lawsuits.<ref>{{cite web|url=http://www.pubmedcentral.nih.gov/articlerender.fcgi?tool=pmcentrez&artid=1123215|title=How whistleblowing cost one doctor £550000|publisher=[[PubMed]]|date=[[2002-05-25]]|accessdate=2007-05-24}}</ref><ref>{{cite web|url=http://www.pubmedcentral.nih.gov/articlerender.fcgi?tool=pmcentrez&artid=1140678|publisher=[[PubMed]]|title=What Can We Learn from Medical Whistleblowers?|author= Lenzer, Jeanne|date=[[2005-05-27]]|accessdate=2007-05-24}}</ref>
==Product approval in the US==
{{main|Food and Drug Administration #Regulation of drugs}}
In the [[United States]], new pharmaceutical products must be approved by the [[FDA]] as being both safe and effective. This process generally involves submission of an [[IND|Investigational new drug]] filing with sufficient pre-clinical data to support proceeding with human trials. Following IND approval, three phases of progressively larger human clinical trials may be conducted. Phase I generally studies [[toxicity]] using healthy volunteers. Phase II can include [[Pharmacokinetics]] and [[Dosing]] in patients, and Phase III is a very large study of efficacy in the intended patient population.
A fourth phase of post-approval surveillance is also often required due to the fact that even the largest clinical trials cannot effectively predict the prevalence of rare side-effects. Post-marketing surveillance ensures that after marketing the safety of a drug is monitored closely. In certain instances, its indication may need to be limited to particular patient groups, and in others the substance is withdrawn from the market completely. Questions continue to be raised regarding the standard of both the initial approval process, and subsequent changes to product labeling (it may take many months for a change identified in post-approval surveillance to be reflected in product labeling) and this is an area where congress is active.<ref>{{cite web|url=http://www.pharmatimes.com/WorldNews/article.aspx?id=12822|title=US Congress Warned of Gathering Storm at FDA|publisher=PharmaTimes|accessdate=2008-02-08}}</ref>
The FDA provides information about approved drugs at the Orange Book site.<ref>{{cite web|url=http://www.fda.gov/cder/ob/default.htm|title=Electronic Orange Book|publisher=U.S. Food and Drug Administration|accessdate=2007-05-31}}</ref> In the UK, the [[British National Formulary]] is the core guide for pharmacists and clinicians.
===Orphan drugs===
{{main|Orphan drug}}
There are [[Orphan Drug Act|special rules]] for certain rare diseases ("orphan diseases") involving fewer than 200,000 patients in the United States, or larger populations in certain circumstances.
<ref>{{cite web|url=http://www.fda.gov/orphan/oda.htm|title=The Orphan Drug Act (as amended)|publisher=U.S. Food and Drug Administration|accessdate=2007-09-24}}</ref> Because medical research and development of drugs to treat such diseases is financially disadvantageous, companies that do so are rewarded with tax reductions, fee waivers, and [[market exclusivity]] on that drug for a limited time (seven years), regardless of whether the drug is protected by patents.
===Legal issues===
Where pharmaceutics have been shown to cause side-effects, [[civil action]] has occurred, especially in countries where [[tort]] payouts are likely to be large. Due to high-profile cases leading to large compensations, most pharmaceutical companies endorse [[tort reform]]. Recent controversies have involved [[Vioxx]] and [[SSRI]] antidepressants.
==Industry revenues==
For the first time ever, in 2006, global spending on prescription drugs topped $643 billion, even as growth slowed somewhat in Europe and North America. The United States accounts for almost half of the global pharmaceutical market, with $289 billion in annual sales followed by the EU and Japan.[http://www.vfa.de/download/SHOW/en/statistics/pharmaceuticalmarket/vfastat_30_en_fa_mt.pdf/vfastat_30_en_sw_mt.pdf (pdf)] Emerging markets such as China, Russia, South Korea and Mexico outpaced that market, growing a huge 81 percent.<ref name='forbes-10'/>
US profit growth was maintained even whilst other top industries saw slowed or no growth.<ref>{{cite web|url=http://www.imshealth.com/ims/portal/front/articleC/0,2777,6025_3665_44771558,00.html|title=IMS Reports 11.5 Percent Dollar Growth in '03 U.S. Prescription Sales|publisher=[[IMS Health]]|date=2004-02-17| accessdate=2007-06-01}}</ref> Despite this, "..the pharmaceutical industry is — and has been for years — the most profitable of all businesses in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue." <ref> [http://www.time.com/time/magazine/article/0,9171,581399-1,00.html] "Why We Pay So Much," TIME magazine, Feb. 2, 2004</ref>
Pfizer's cholesterol pill [[Atorvastatin|Lipitor]] remains the best-selling drug in the world for the fifth year in a row. Its annual sales were $12.9 billion, more than twice as much as its closest competitors: [[Clopidogrel|Plavix]], the blood thinner from Bristol-Myers Squibb and Sanofi-Aventis; [[Esomeprazole|Nexium]], the heartburn pill from AstraZeneca; and [[Fluticasone/salmeterol|Advair]], the asthma inhaler from GlaxoSmithKline.<ref name='forbes-10'>{{cite web|url=http://www.forbes.com/home/sciencesandmedicine/2006/03/21/pfizer-merck-amgen-cx_mh_pk_0321topdrugs.html|title=The World's Ten Best-Selling Drugs|author=Herper, Matthew and Kang, Peter|publisher=[[Forbes]]|date=[[2006-03-22]]|accessdate=2007-05-31}}</ref>
[[IMS Health]] publishes an analysis of trends expected in the pharmaceutical industry in 2007, including increasing profits in most sectors despite loss of some patents, and new 'blockbuster' drugs on the horizon.<ref>{{cite web|url=http://www.imshealth.com/ims/portal/front/articleC/0,2777,6025_3665_79210022,00.html|title=IMS Health Forecasts 5 to 6 Percent Growth for Global Pharmaceutical Market in 2007|publisher=IMS Health|date=[[2006-10-24]]|accessdate=2007-06-19}}</ref>
Teradata Magazine predicted that by 2007, $40 billion in U.S. sales could be lost at the top 10 pharma companies as a result of slowdown in R&D innovation and the expiry of patents on major products, with 19 blockbuster drugs losing patent.<ref>{{cite web|url=http://www.teradata.com/t/page/131951/|title=Prescription for change|publisher=Teradata Magazine online|month=March|year=2005|accessdate=2007-06-19}}</ref>
===Sales leaders===
The top ten pharmaceutical companies by 2006 sales are:<ref>Wood Mackenzie 2006</ref>
{|
! Rank !! Company !! Sales ($m) !! Growth (%) !! Market Share (%) !! Based/Headquartered in
|-
| 1 || [[Pfizer]] || 45,983 || 1.8 || 7.3 || [[US]]
|-
| 2 || [[GlaxoSmithKline]] || 37,034 || 9.7 || 5.9 || [[UK]]
|-
| 3 || [[Sanofi-Aventis]] || 35,638 || 5.0 || 5.7 || [[France]]
|-
| 4 || [[Novartis]] || 28,880 || 18.0 || 4.6 || [[Switzerland]]
|-
| 5 || [[Hoffmann–La Roche]] || 26,596 || 21.8 || 4.2 || [[Switzerland ]]
|-
| 6 || [[AstraZeneca]] || 25,741 || 10.5 || 4.1 || [[UK]]/[[Sweden]]
|-
| 7 || [[Johnson & Johnson]] || 23,267 || 4.2 || 3.7 || [[US]]
|-
| 8 || [[Merck & Co.]] || 22,636 || 2.8 || 3.6 || [[US]]
|-
| 9 || [[Wyeth]] || 15,683 || 2.4 || 2.5 || [[US ]]
|-
| 10 || [[Eli Lilly and Company]] || 14,814 || 7.5 || 2.4 || [[US ]]
|}
NB The top 25 Pharmaceutical Company lists produced by Wood-Mackenzie for the years 2004-2006 can be found at: http://www.p-d-r.com/ranking/ranking.html on the P-D-R website.
===Patents and generics===
Depending on a number of considerations, a company may apply for and be granted a [[chemical patent|patent]] for the drug, or the process of producing the drug, granting exclusivity rights typically for about 20 years.<ref>[http://www.wipo.int/patentscope/en/patents_faq.html#patent_role Frequently Asked Questions (FAQs)<!-- Bot generated title -->]</ref> However, only after rigorous study and testing, which takes 10 to 15 years on average, will governmental authorities grant permission for the company to market and sell the drug.<ref>{{cite web|url=http://www.phrma.org/files/NDA2006.pdf|title=New Drug Approvals in 2006|year=2007|month=March|accessdate=2008-02-23}}</ref> Patent protection enables the owner of the patent to recover the costs of research and development through high profit margins for the [[brand]]ed drug. When the patent protection for the drug expires, a [[generic drug]] is usually developed and sold by a competing company. The development and approval of generics is less expensive, allowing them to be sold at a lower price. Often the owner of the branded drug will introduce a generic version before the patent expires in order to get a head start in the generic market.<ref>{{cite web|url=http://www.phrma.org/files/IMS%20Authorized%20Generics%20Report_6-22-06.pdf|title=Assessment of Authorized Generics in the U.S.|publisher=IMS Consulting|year=2006|month=June|accessdate=2008-02-23}}</ref>
===Medicare Part D===
In 2003 the United States enacted the [[Medicare Prescription Drug, Improvement, and Modernization Act]] (MMA), a program to provide prescription drug benefits to the [[elderly]] and [[disabled]]. This program is a component of [[Medicare (United States)]] and is known as [[Medicare Part D]]. This program, set to begin in January 2006, will significantly alter the revenue models for pharmaceutical companies. Revenues from the program are expected to be $724 billion between 2006 and 2015.<ref>{{cite web|url=http://web.archive.org/web/20060217051127/http://www.kff.org/medicare/upload/7044-02.pdf|title=The medicare Prescriptions Drug Benefit|publisher=[[Kaiser Family Foundation]]|year=2005|month=September|accessdate=2007-06-12}}</ref>
Pharmaceuticals developed by biotechnological processes often must be injected in a physician's office rather than be delivered in the form of a capsule taken orally. Medicare payments for these drugs are usually made through Medicare Part B (physician office) rather than Part D (prescription drug plan).
===Mergers, acquisitions, and co-marketing of drugs===
A [[Mergers and acquisitions|merger, acquisition]], or [[co-marketing]] deal between pharmaceutical companies may occur as a result of complementary capabilities between them. A small [[biotechnology]] company might have a new drug but no sales or marketing capability. Conversely, a large pharmaceutical company might have unused capacity in a large sales force due to a gap in the company pipeline of new products. It may be in both companies' interest to enter into a deal to capitalize on the synergy between the companies. The difference between the value of the two companies after the deal and before the deal is known as the [[synergy]] value of the deal.
===Prescriptions===
In the U.S. , prescriptions have increased over the past decade to 3.4 billion annually, a 61 percent increase. Retail sales of prescription drugs jumped 250 percent from $72 billion to $250 billion, while the average price of prescriptions has more than doubled from $30 to $68.
[http://www.census.gov/compendia/statab/tables/08s0130.pdf Retail prescription drug sales 1995 to 2006 PDF from www.census.gov ]
==Marketing==
Pharmaceutical companies commonly spend a large amount on advertising, marketing and lobbying.{{Fact|date=September 2007}} In the US, drug companies spend $19 billion a year on promotions.<ref name="moynihanbmj">Moynihan R ([[2003-05- cvc31]]). [http://www.pubmedcentral.nih.gov/articlerender.fcgi?artid=1126054 Who pays for the pizza? Redefining the relationships between doctors and drug companies. 2: Disentanglement]. ''BMJ: British Medical Journal''. Volume 326, Issue 7400, Pages 1193–1196. Retrieved on [[2007-10-06]].</ref> Advertising is common in healthcare journals as well as through more mainstream media routes. In some countries, notably the US, they are allowed to advertise direct to the general public. Pharmaceutical companies generally employ sales people (often called 'drug reps' or, an older term, 'detail men') to market directly and personally to physicians and other healthcare providers. In some countries, notably the US, pharmaceutical companies also employ [[lobbyists]] to influence politicians.{{Fact|date=September 2007}} Marketing of prescription drugs in the US is regulated by the federal [[Prescription Drug Marketing Act (PDMA)|Prescription Drug Marketing Act of 1987]].
===To healthcare professionals===
Physicians are perhaps the most important players in pharmaceutical sales because they write the prescriptions that determine which drugs will be used by the patient. Influencing the physician is often seen as the key to prescription pharmaceutical sales.<ref>{{cite web|url=http://www.pharmexec.com/pharmexec/article/articleDetail.jsp?id=395598|title=Marketing to Professionals: Tomorrow's Changes Today|publisher=PharmExec.com|author=Myers, Kelly D.|date=[[2007-01-01]]|accessdate=2007-06-20}}</ref> A medium-sized pharmaceutical company might have a sales force of 1000 representatives. The largest companies have tens of thousands of representatives. Currently, there are approximately 100,000 pharmaceutical sales reps in the United States pursuing some 120,000 pharmaceutical prescribers.<ref>{{cite web|url=http://www.healthbanks.com/PatientPortal/Public/support_documents/PMT_Robinson.pdf|title=Changing the Face of Detailing by Motivating Physicians to See Pharmaceutical Sales Reps|publisher=Health Banks|author=Robinson, James T.|year=2003|month=November|accessdate=2007-06-20}}</ref> The number doubled in the four years from 1999 to 2003. Drug companies spend $5 billion annually sending representatives to physician offices. Pharmaceutical companies use the service of specialized [[healthcare marketing research]] companies to perform Marketing research among Physcians and other Healthcare professionals.
===To insurance and public health bodies===
Private insurance or public health bodies (e.g. the NHS in the UK) decide which drugs to pay for, and restrict the drugs that can be prescribed through the use of formularies.{{Confusing|date=September 2007}} This, along with the high-margin companies that can realise for their most successful medicines, make [[pharmaceutical marketing]] complex. There are a number of [[company|firm]]s that specialize in data and analytics for pharmaceutical marketing ([http://yellowikis.org/wiki/index.php/Transwiki:List_of_companies_that_provide_data_and_analytic_services_for_pharmaceutical_sales_and_marketing Yellowikis]).
Public and private insurers restrict the brands, types and number of drugs that they will cover. Not only can the insurer affect drug sales by including or excluding a particular drug from a formulary, they can affect sales by tiering or placing bureaucratic hurdles to prescribing certain drugs as well. In January 2006, the U.S. instituted a new public prescription drug plan through its Medicare program known as [[Medicare Part D]]. This program engages private insurers to negotiate with pharmaceutical companies for the placement of drugs on tiered formularies.
===To retail pharmacies and stores===
Commercial stores and pharmacies are a major target of non-prescription sales and marketing for pharmaceutical companies.
===Direct to consumer advertising===
{{main|Direct-to-consumer advertising}}
Since the 1980s new methods of marketing for prescription drugs to consumers have become important. Direct-to-consumer media advertising was legalised in the FDA Guidance for Industry on Consumer-Directed Broadcast Advertisements
===Controversy about drug marketing and lobbying===
There has been increasing controversy surrounding pharmaceutical marketing and influence. There have been accusations and findings of influence on doctors and other health professionals through drug reps, including the constant provision of marketing 'gifts' and biased information to health professionals;<ref>{{cite web|url=http://www.nofreelunch.org/|title=No Free Lunch|accessdate=2007-05-23}}</ref><ref>{{cite web|url=http://www.washingtonpost.com/wp-dyn/content/article/2005/05/05/AR2005050501115_pf.html|title= Merck CEO Resigns as Drug Probe Continues|publisher=[[Washington Post]]|date=[[2005-05-06]]|accessdate=2007-05-23}}</ref> highly prevalent advertising in journals and conferences; funding independent healthcare organizations and health promotion campaigns; lobbying physicians and politicians (more than any other industry in the US;<ref>{{cite web|url=http://www.publicintegrity.org/rx/report.aspx?aid=723|title=Drug Lobby Second to None: How the pharmaceutical industry gets its way in Washington|publisher=publicintegrity.org|date=[[2005-07-07]]|accessdate=2007-05-23}}</ref> sponsorship of [[medical school]]s or nurse training; sponsorship of continuing educational events, with influence on the curriculum;<ref>Ray Moynihan ([[2003-05-31]]). [http://www.bmj.com/cgi/content/full/326/7400/1163 Drug company sponsorship of education could be replaced at a fraction of its cost]. ''BMJ: British Medical Journal'', Volume 326, Issue 7400, Page 1163. Retrieved on [[2007-10-07]].</ref> and hiring physicians as paid consultants on medical advisory boards.
To help ensure the status quo on U.S. drug regulation and pricing, the pharmaceutical industry has thousands of lobbyists in Washington, DC that lobby Congress and protect their interests. The pharmaceutical industry spent $855 million, more than any other industry, on lobbying activities from 1998 to 2006, according to the non-partisan Center for Public Integrity. <ref> http://www.usatoday.com/news/washington/2007-05-10-senators-drug-bill_N.htm "Senators Who Weakened Drug Bill Got Millions From Industry," USA Today, May, 10, 2007]</ref>
Some advocacy groups, such as [[No Free Lunch (organization)|No Free Lunch]], have criticized the effect of drug marketing to physicians because they say it biases physicians to prescribe the marketed drugs even when others might be cheaper or better for the patient.<ref name="Koerner">Koerner BI (March/April, 2003), [http://www.motherjones.com/news/hellraiser/2003/03/ma_290_01.html Dr. No Free Lunch]. ''Mother Jones'', Retrieved on [[2007-10-06]].</ref>
There have been related accusations of [[disease mongering]]<ref name="Moynihan"/> (over-medicalising) to expand the market for medications. An inaugural conference on that subject took place in Australia in 2006.<ref>{{cite web|url=http://collections.plos.org/plosmedicine/diseasemongering-2006.php|title=A Collection of Articles on Disease Mongering|publisher=Public Library of Science|accessdate=2007-05-23}}</ref>
A 2005 review by a special committee of the [[UK]] government came to all the above conclusions in a European Union context<ref>{{cite web|url=http://www.epha.org/a/1773|title=UK parliamentarians put the pharma industry under the spotlight|publisher=European Public Health Alliance|accessdate=2007-05-23}}</ref> whilst also highlighting the contributions and needs of the industry.
==Developing world==
The role of pharmaceutical companies in the developing world is a matter of some debate, ranging from those highlighting the aid provided to the developing world, to those critical of the use of the poorest in human clinical trials, often without adequate protections, particularly in [[states]] lacking a strong [[rule of law]]. Other criticisms include an alleged reluctance of the industry to invest in treatments of diseases in less economically advanced countries, such as [[malaria]]; Criticism for the price of [[patent]]ed [[AIDS]] medication, which could limit therapeutic options for patients in the [[Third World]], where the most people have AIDS.
Under [[World Trade Organization]] rules, a developing country has options for obtaining needed medications under [[compulsory licensing]] or importation of cheaper versions of the drugs, even before [[patent]] expiration [http://www.wto.org/english/news_e/pres03_e/pr350_e.htm (WTO Press Release)]. Pharmaceutical companies often offer much needed medication at no or reduced cost to the developing countries. Proposals to allow the manufacture of generic AIDS drugs are not without controversy; it is sometimes claimed that this might cause pharmaceutical companies to move away from AIDS drug research and focus their research on other, more profitable areas{{Fact|date=June 2007}}). In March of 2001, [[South Africa]] was sued by 41 pharmaceutical companies for their [[Medicines Act]], which allowed the import and generic production of cheap AIDS drugs. The case was later dropped after protest around the world.
===Nigerian clinical trial===
In 1996, a pediatric clinical trial conducted on behalf of [[Pfizer]] tested the antibiotic [[Trovafloxacin|Trovan]] allegedly without first obtaining the informed consent of participants or their parents.<ref>{{cite web|url=http://www.washingtonpost.com/ac2/wp-dyn/A11939-2000Dec15|title=As Drug Testing Spreads, Profits and Lives Hang in Balance|author=Stephens, Joe|publisher=Washington Post|date=[[2000-12-17]]|accessdate=2007-06-25}}</ref><ref>{{cite web|url=http://bmj.bmjjournals.com/cgi/content/full/323/7313/592/b|title=Nigerians to sue US drug company over meningitis treatment|Kovac, Carl|publisher=BMJ|date=[[2001-09-15]]|accessdate=2007-06-25}}</ref><ref>{{cite web|url=http://www.bmj.com/cgi/content/full/322/7280/194|title=Pfizer accused of testing new drug without ethical approval|author=Wise, Jacqui|publisher=BMJ|date=[[2001-01-27]]|accessdate=2007-06-25}}</ref><ref>{{cite web|url=http://www.channel4.com/health/microsites/D/dying_for_drugs/resources4.html|title=Dying For Drugs|publisher=channel4.com|accessdate=2007-06-25}}</ref>
===Charitable programmes===
Charitable programs and drug discovery & development efforts are routinely undertaken by phamaceutical companies. Some examples include:
* "[[Merck & Co.|Merck]]'s Gift," wherein billions of [[River Blindness]] drugs were donated in Africa <ref>http://www.cartercenter.org/healthprograms/showdoc.asp?programID=2&submenu=healthprograms</ref>
* [[Pfizer]]'s gift of free/discounted [[fluconazole]] and other drugs for [[AIDS]] in [[South Africa]] <ref>[http://www.aegis.com/pubs/atn/2000/ATN34003.html Pfizer Will Donate Fluconazole to South Africa<!-- Bot generated title -->]</ref>
* [[GlaxoSmithKline|GSK]]'s commitment to give free albendazole tablets to the WHO for, and until, the elimination of [[lymphatic filariasis]] worldwide.</sup>
* In 2006, [[Novartis]] committed USD 755 million in corporate citizenship initiatives around the world, particularly focusing on improved access to medicines in the developing world through its Access to Medicine projects, including donations of medicines to patients affected by [[leprosy]], [[tuberculosis]], and [[malaria]]; [[Glivec]] patient assistance programmes; and relief to support major humanitarian organisations with emergency medical needs.<ref>www.corporatecitizenship.novartis.com Novartis corporate citizenship</ref>
== Industry associations ==
* [[European Federation of Pharmaceutical Industries and Associations]] (EFPIA)
* [[European Pharmaceutical Market Research Association]] (EphMRA)
* [[International Federation of Pharmaceutical Manufacturers and Associations]] (IFPMA)
* [[Japan Pharmaceutical Manufacturers Association]] (JPMA)
* [[New York Health Products Council]] (NYHPC)
* [[Pharmaceutical Research and Manufacturers of America]] (PhRMA)
* [[Irish Pharmaceutical Healthcare Association]] (IPHA)
== Regulatory authorities ==
* [[International Conference on Harmonisation of Technical Requirements for Registration of Pharmaceuticals for Human Use]] (ICH)
* [[European Medicines Agency]] (EMEA)
* [[Food and Drug Administration]] (FDA)
* [[Ministry of Health, Labour and Welfare (Japan)]]
* [[Medicines and Healthcare products Regulatory Agency]] (MHRA)
* [[Central Drugs Standards Control Organisation(India) CDSCO]]
* [[Ukrainian Drug Registration Agency]][http://www.drugmed.gov.ua/]
== See also ==
{{col-begin}}
{{col-break}}
* [[Biotechnology]]
* [[Cautionary and advisory label]]
* [[Clinical trial]]
* [[Contamination control]]
* [[Drug development]]
* [[Drug design]]
* [[Drug discovery]]
* [[Generic drug]]
* [[Health care system]]
{{col-break}}
* [[List of top selling drugs]]
* [[List of pharmaceutical companies]]
* [[National pharmaceuticals policy]]
* [[Orphan drug]]
* [[Pharmaceutical marketing]]
* [[Pharmaceutical lobby]]
* [[Prescription drug prices in the United States]]
* [[Use of biotechnology in pharmaceutical manufacturing]]
{{col-end}}
==Notes==
{{reflist|2}}
==Further reading==
* Jaconelli T, "[http://www.thelancetstudent.com/2008/01/07/the-pharmaceutical-industry-and-its-influence-on-doctors-and-medical-students/ ''The Pharmaceutical Industry and its Influence on Doctors and Medical Students]", Lancet, 2008.
* Coyne J. Lessons in conflict of interest: “The construction of the martyrdom of David Healy and the dilemma of bioethics.” American Journal of Bioethics 5 (1): W3-W14, 2005.
* Ray Moynihan, Alan Cassels: ''Selling sickness: How the world's biggest pharmaceutical companies are turning us all into patients''. Nation Books, New York, 2005.
* Merrill Goozner: ''[http://www.businessweek.com/magazine/content/04_16/b3879046_mz005.htm The $800 million pill]''. University of California Press, Berkeley, 2004, 297 S. ISBN 0-520-23945-8.
* Marcia Angell: ''The truth about the drug companies''. Random House, New York, 2004, 305 S. ISBN 0-375-50846-5.
* Diana A. Taylor: ''HEALTHYWORDS Towards a Betterment in Medical Communications across the Drug Industry'' ISBN 3-8288-9083-0 Tectum Verlag 2006 S.187
*Joanna Moncrieff, "[http://www.spinwatch.org/content/view/258/8/ An Unholy Alliance? Psychiatry and the influence of the pharmaceutical industry]", ''Spinwatch'', 27 June 2006.
* E. Kumar Sharma, "[http://businesstoday.digitaltoday.in/the-best-companies-to-work-for-in-india-18.html The best Pharmaceutical company to work for in India]", ''Business Today'', October 26, 2007.
<br>
[[Category:Biotechnology]]
[[Category:Clinical research]]
[[Category:Pharmaceutical companies]]
[[Category:Pharmaceutical industry]]
[[Category:Pharmaceuticals policy]]
[[Category:Pharmacology]]
[[Category:Pharmacy]]
{{Link FA|ca}}
{{Link FA|es}}
[[ca:Indústria farmacèutica]]
[[de:Pharmaunternehmen]]
[[es:Industria farmacéutica]]
[[eo:Farmacia industrio]]
[[fr:Industrie pharmaceutique]]
[[ko:제약회사]]
[[it:Industria farmaceutica]]
[[nl:Farmaceutische industrie]]
[[ja:製薬]]
[[pt:Indústria farmacêutica]]
[[ru:Фармацевтическая компания]]
[[fi:Lääketeollisuus]]