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36 Chapter 1 History of pharmaceuticals
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dichlorodiphenyltrichloroethane.svg Accessed February 16, 2020.
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February 28, 2020.
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[62] Hoffman-LaRoche: https://en.wikipedia.org/wiki/Roche Accessed February 29, 2020.
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[75] Novo Industri A/S: https://www.referenceforbusiness.com/history2/30/NOVO-INDUSTRI-A-S.
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38 Chapter 1 History of pharmaceuticals
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Bibliography 39
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Chapter 2
Business model: brand versus generics, product
demand, process selection, and economics
2.1 What is a drug?
A drug is a chemical (active pharmaceutical ingredient, API) which is given to people
in order to treat or prevent an illness or disease. Consumption of drugs can be via
inhalation, injection, smoking, ingestion, absorption via a patch on the skin, or disso-
lution under the tongue. Traditionally, drugs were obtained through extraction from
medicinal plants, but more recently also by organic synthesis. Pharmaceutical drugs
are generally used for a limited duration, or on a regular basis for chronic illnesses.
APIs in unformulated form are difficult to dispense. APIs are used in minute quanti-
ties (micrograms to milligrams). For easier and safer dispensing, they are formulated
with inert excipients. Consumption of unformulated APIs can be difficult and more
than needed dose can be toxic.
Most of the API are also called small-molecule drugs. They are fine/specialty
chemicals and are manufactured by chemical synthesis. Besides small-molecule
drugs, there are biologic drugs, a product that is produced from living organisms or
contain components of living organisms. Biologic or biosimilar drugs are produced
using a living or attenuated microorganism [1]. They are not discussed in detail here
but, in most cases, chemical engineering principles apply for their process commer-
cialization and optimization.
2.2 Brand and generic drugs
Most of the drugs are small molecules that fall into two categories: brand or generic.
How they came about has been discussed in Chapter 1. The business model for the
brand and the generic drugs is very similar. Each drug (injectable, solid tablet, an
ointment, spray, or drops) in its finished dose form (FDF) has two components. One
is an API that has the effect to cure the disease [2]. Generally, very small quantities
(micrograms to milligrams) are needed to cure ailments. Since such small quantities
cannot be picked by a pinch, they are admixed with a mixture of inert components,
the second component, known as the excipients. This mix is converted to FDF to
facilitate dispensing. Focus here is on solid dosage. Discussion and concepts can be
extended to other dispensable forms.
https://doi.org/10.1515/9783110702842-002
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2.2.1 Brand drugs
Brand drugs generally have a trade name and are protected by a patent. A patent pro-
tects the investment of the drug company that developed the drug and gives the com-
pany the sole right to sell the drug while the patent is in effect. When the patent
expires, the same drug is sold as a generic drug.
Brand drug development is expensive. Their costs have escalated from about
$802 million in 2003 to approximately $2.6 billion dollars in 2019 [3]. They go through
a rigorous discovery, development, clinical research/trials, review, and approval pro-
cess. Their manufacturing processes have to follow cGMP practices [4]. Once approved,
a brand drug is sold by the drug molecule pioneering company exclusively.
For decades, the regulation and control of new drugs in the United States has
been based on the new drug application (NDA). Since 1938, every new drug has
been the subject of an approved NDA [5] before US commercialization. The NDA ap-
plication is the vehicle through which drug sponsors formally propose that the FDA
approve a new pharmaceutical for sale and marketing in the United States. The
data gathered during the animal studies and human clinical trials of an investiga-
tional new drug (IND) becomes part of the NDA.
The goals of the NDA are to provide enough information to permit an FDA re-
viewer to reach the following key decisions:
– Whether the drug is safe and effective in its proposed use(s), and whether the
benefits of the drug outweigh the risks
– Whether the drug’s proposed labeling (package insert) is appropriate, and what
it should contain
– Whether the methods used in manufacturing the drug and the controls used to
maintain the drug’squalityareadequatetopreservethedrug’s identity, strength,
quality, and purity
The documentation required in an NDA is supposed to tell the drug’s whole story,
including what happened during the clinical tests, what the ingredients of the drug
are, the results of the animal studies, how the drug behaves in the body, and how it
is manufactured, processed, and packaged. The following provides summaries on
NDA content, format, and classification, plus the NDA review process.
2.2.2 Brand drug development process
New drug discovery and development process is complex. It has multiple steps [6].
42 Chapter 2 Business model: brand versus generics, product
2.2.2.1 Step 1: discovery and development
Discovery
Typically, researchers discover new drugs through:
– new insights into a disease process that allows researchers to design a product
to stop or reverse the effects of the disease;
– many tests of molecular compounds to find possible beneficial effects against
any of a large number of diseases;
– existing treatments that have unanticipated effects;
– new technologies such as those that provide new ways to target medical prod-
ucts to specific sites within the body or to manipulate a genetic material.
At this stage in the process, thousands of compounds may be potential candidates
for development as a medical treatment. After early testing, however, only a small
number of compounds look promising and call for further study.
Development
Once researchers identify a promising compound for development, they conduct ex-
periments to gather information on:
– how it is absorbed, distributed, metabolized, and excreted;
– its potential benefits and mechanisms of action;
– the best dosage;
– the best way to give the drug (such as by mouth or injection);
– side effects or adverse events that can often be referred to as toxicity;
– how it affects different groups of people (such as by gender, race, or ethnicity)
differently;
– how it interacts with other drugs and treatments; and
– its effectiveness as compared with similar drugs.
2.2.2.2 Step 2: preclinical research
Before testing a drug in people, researchers must find out toxicity of the compound.
The two types [7] of preclinical research are:
– in vitro (Petri dish studies) and
– in vivo (studies performed in living organism).
FDA requires researchers to use good laboratory practices (GLP), defined in medical
product development regulations, for preclinical laboratory studies. The GLP regula-
tions are found in CFR – Code of Federal Regulations Title 21 [8]. These regulations
set the minimum basic requirements for:
– study conduct
– personnel
2.2 Brand and generic drugs 43
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– facilities
– equipment
– written protocols
– operating procedures
– study reports
– system of quality assurance oversight for each study to help assure the safety of
FDA-regulated product
Usually, preclinical studies are not very large. However, these studies must provide
detailed information on dosing and toxicity levels. After preclinical testing, re-
searchers review their findings and decidewhetherthedrugshouldbetestedin
people.
2.2.2.3 Step 3: clinical research
While preclinical research answers basic questions about a drug’s safety, it is not a
substitute for studies of ways the drug will interact with the human body. “Clinical
research” refers to studies, or trials, that are done in people. As the developers de-
sign the clinical study, they will consider what they want to accomplish for each of
the different clinical research phases and begin the IND process, a process they
must go through before clinical research begins.
Designing clinical trials
Researchers design clinical trials to answer specific research questions related to a
medical product. These trials follow a specific study plan, called a protocol, that is
developed by the researcher or manufacturer. B efore a clinical trial begins, re-
searchers review prior information about the drug to develop research questions
and objectives. Then, they decide:
– Who qualifies to participate (selection criteria)?
– How many people will be part of the study?
– How long the study will last?
– Whether there will be a control group and other ways to limit research bias.
– How the drug will be given to patients and at what dosage?
– What assessments will be conducted, when, and what data will be collected?
– How the data will be reviewed and analyzed?
Clinical trials follow a typical series from early, small-scale, phase 1 studies to late-
stage, large-scale, phase 3 studies.
44 Chapter 2 Business model: brand versus generics, product
The investigational new drug process
Drug developers, or sponsors, must submit an IND application to FDA before beginning
clinical research.
In the IND application, developers must include:
– Animal study data and toxicity (side effects that cause great harm) data
– Manufacturing information
– Clinical protocols (study plans) for studies to be conducted
– Data from any prior human research
– Information about the investigator
Drug developers are free to ask for help from the FDA at any point in the drug devel-
opment process, including:
– Pre-IND application, to review FDA guidance documents and get answers to
questions that may help enhance their research
– After phase 2, to obtain guidance on the design of large phase 3 studies
– Any time during the process, to obtain an assessment of the IND application
Even though FDA offers extensive technical assistance, drug developers are not re-
quired to take FDA’s suggestions. As long as clinical trials are thoughtfully designed,
reflect what developers know about a product, safeguard participants, and otherwise
meet Federal standards, FDA allows wide latitude in a clinical trial design.
Approval
The FDA review team has 30 days to review the original IND submission. The process
protects volunteers who participate in clinical trials from unreasonable and signifi-
cant risk in clinical trials. FDA responds to IND applications in one of two ways:
– Approval to begin clinical trials.
– Clinical hold to delay or stop the investigation. FDA can place a clinical hold
for specific reasons, including:
– Participants are exposed to unreasonable or significant risk.
– Investigators are not qualified.
– Materials for the volunteer participants are misleading.
– The IND application does not include enough information about the trial’srisks.
A clinical hold is rare; instead, FDA often provides comments intended to improve
the quality of a clinical trial. In most cases, if FDA is satisfied that the trial meets
Federal standards, the applicant is allowed to proceed with the proposed study.
The developer is responsible for informing the review team about new protocols,
as well as serious side effects seen during the trial. This information ensures that the
team can monitor the trials carefully for signs of any problems. After the trial ends,
researchers must submit study reports.
2.2 Brand and generic drugs 45
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