The global pharmaceutical industry faces challenging times but sees silver lining
There is a golden age for everything, only, as American film director Alexander Payne, once said, “You just never know when you’re living in a golden age.” American poet Randall Jarrell gives an ironic twist to it, when he said, “The people who live in a golden age usually go around complaining how yellow everything looks.”
The golden age of medicine is a time that everyone can appreciate, for good health is at the core of good living. Medicine in some form has existed for long ages, and the world’s great thinkers obsessed on healing sick bodies. But they were nowhere close to a golden age. One of the most venerated figures in the global history of medicine, Greek physician Hippocrates said, “Natural forces within us are the true healers of disease.” Italian Renaissance artist Leonardo da Vinci said, ““Medicine is the restoration of discordant elements; sickness is the discord of the elements infused into the living body.”
History shows how certain breakthroughs in treating the sick were milestones that helped advance healthier and longer lives for everyone. Deadly viruses had led to many deaths over centuries, until English physician and scientist Dr Edward Jenner pioneered the world’s first vaccine, the smallpox vaccine in 1796. In 1928, came another medical breakthrough, the chance discovery of the world’s first antibiotic, Penicillin G, by Scottish physician, microbiologist and pharmacologist, Alexander Fleming.
Since then, different kinds of antibiotics were produced in the world, and today, over 100 distinctive antibiotics are available on the market, ranging from mild to extremely strong, and able to cure minor to deadly infections. The use of antibiotics is so widespread globally, it is expected to have a market value of around USD 57 billion by 2024, according to a recent report by Grand View Research Inc. in California.
Yet, as reports indicate, although pharmaceutical innovation appears robust, with research possibly in its golden age, the world’s drug industry is deemed to be past its golden age of being profitable. In 2017, the US created a record by obtaining over 50 new approvals for active substances, drug therapies and vaccines, but the industry is currently pressured to lower drug prices, while various thriving patents are ending. These factors impact negatively on profit. In fact, some economists have said it is time for the drug industry to experience a decline in profit, after decades of roaring prosperity. In 2017, the pharmaceutical industry grew its total revenue only by 2%, and, for the first nine months of the year, about 20 leading pharmaceutical companies collectively stagnated in revenue growth. Professor of Applied Economics at the Sloan School of Management at the Massachusetts Institute of Technology (MIT), Ernst Berndt and his team, in a recent study, found that the average lifetime sales of drugs coming onto the market since the early 1990s, have progressively fallen over the years. They discovered that drugs produced in the mid-1990s achieved $4 billion to$5 billion in sales revenue. Similar drugs during 2005-2009, fell short of $3 billion revenue.
In the face of questions raised about affordability of high-cost prescription drugs, manufacturers argue that to lower prices would make research and development on new drugs less attractive in the future. Also, the demand for quality drugs keeps the share prices of drug companies, like the Hikma share price, soaring and remaining high.
Furthermore, research and development costs for new drugs are consistently rising, compounded by legal and financial complications that prevent newer more effective drugs from being produced. Hovering over it all are the “superbugs,” the deadly bacteria that have formed resistance to existing antibiotics, making it harder than ever to create potent new drugs. As Betsy Bauman said, “Antibiotics are truly miracle drugs that have saved countless millions of lives. But antibiotic resistance is a critical public health issue that is eroding the effectiveness of antibiotics and may affect the health of each and every one of us.”
About 700,000 people die globally, every year, because of infections that don’t respond to existing antibiotics. When antibiotics are used extensively, the bacteria they are fighting, develop resistance to the medication. As research studies indicate, R&D costs of producing a new antibiotic goes over a billion dollars. According to Pew Charitable Trusts, 37 new antibiotics are currently in clinical trials. However, most of those drugs are derivatives of existing classes of medicine and it will take less time for bacteria to grow resistant to them.
While the cost of producing a new class of antibiotic, is almost prohibitively expensive, it is also dogged by lower return on investment. Antibiotics are used generally for 7-14 days. In contrast, long term medications for chronic ailments such as diabetes or high blood pressure, have a higher return on investment through consistent and incremental use. While researchers continued to find new classes of antibiotics through the initial discovery into the 1980s, since then, there was a dry spell, creating a 30-year “discovery void.” Recently, the dry spell was thwarted with a new antibiotic to treat many common bacterial infections like septicemia and TB. This discovery was commended as “a paradigm shift.” As biochemist Kim Lewis at Boston’s private research university, Northeastern University, said, “Without antibiotics, essentially you do not have modern medicine.”
Perhaps, there is yet a golden age to come for the modern pharmaceutical industry. William Shakespeare said, “The golden age is before us, not behind us.”
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