Encyclopedia of Stem Cell Research

Pharmaceutical Industry

Contributors: Andrew J. Waskey

Editors: Clive N. Svendsen & Allison D. Ebert
Book Title: Encyclopedia of Stem Cell Research
Chapter Title: "Pharmaceutical Industry"
Pub. Date: 2008
Access Date: October 30, 2014
Publishing Company: SAGE Publications, Inc.
City: Thousand Oaks
Print ISBN: 9781412959087
Online ISBN: 9781412963954
DOI: http://dx.doi.org/10.4135/9781412963954.n212
Print pages: 426-429
2008 SAGE Publications, Inc. All Rights Reserved.

This PDF has been generated from SAGE knowledge. Please note that the pagination
of the online version will vary from the pagination of the print book.

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http://dx.doi.org/10.4135/9781412963954.n212
PHARMACOLOGY HAS BEEN practiced around the world since the first time a plant
or other natural remedy was applied to a human ailment. Major modern pharmaceutical
companies are the fruit of advances in the 20th century in biology, chemistry, genetics,
manufacturing processes, technology, scientific advances and business practices. The
advance have made modern pharmaceuticals products the great deliverer from disease.
The approximately 200 pharmaceutical companies around the world are commercial
businesses that promote the discovery, development, and marketing of new medicines.
Physicians who prescribe medicines and druggists at local drug [p. 426 ] stores are
the end of their distribution system. Many are huge retail chains, others are owned by
a single entrepreneur. The pharmaceutical companies are the makers of the drugs and
other therapeutic products used in medical treatments. They make drugs that are sold
under their brand names or as generics.
Before the 19th century most pharmacology was herbal or some inorganic mixtures.
In the late 19th century advances in biology, chemistry, understanding of genetics,
manufacturing processes as well as other inventions or scientific advance have made
modern pharmaceutical's products what they are today. Most of the pharmaceutical
companies developed from local drug stores in North America or Europe. Some were
founded in the late 19th or early 20th century.
The modern pharmaceutical industry was born from several independent activities.
With the discovery of the antibiotic effects of the mold from which penicillin is grown
medicines such as penicillin, the sulfur drugs, insulin, or antibiotics became available in
local drugstores. From this, small companies grew into mass market industrial giants.
Advances in dye chemistry in the 19th century by German chemists revealed that when
certain microbes absorbed a particular dye, it killed them. The coal was the source
of the new sulfur dyes which when combined with advances in germ theory enable
synthetic drugs to be manufactured. The total pharmacopeia of medical practice was
greatly enlarged. It has since grown into a global multibillion dollar giant. Germany,
Switzerland, the United Kingdom, Italy, and the United States became major centers for
the manufacture of drugs.

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Encyclopedia of Stem Cell Research:

Pharmaceutical Industry

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New Drug Developments

In the 1950s and 1960s, a great many new drugs were developed. With a market in the
tens of millions around the world heart medications or blood pressure drugs such as
cortisone and thorazine extended the lives of millions.
Psychiatry was aided with a number of psychoactive drugs such as valium
(diazepam) and other tranquilizers. They also ushered in a new era of drug abuse.
In the 1960s a tragic side effect was discovered in female users of thalidomide.
Pregnant women who took the drug often gave birth to deformed children. The
Declaration of Helsinki was issued in 1964 by the World Medical Association setting
standards for the conducting of clinical trials. Pharmaceutical companies were expected
to prove efficacy in the clinical trials that they conducted before marketing a drug.
The invention of the pill in the 1960s, which was the first of the oral contraceptives,
enabled couples to plan their families. It also prevented unwanted pregnancies in those
sexually active people who were unmarried.
Cancer drugs began to be developed in the 1970s. Chemotherapy became a familiar
term for cancer treatments. Also in the 1970s, changes in patent laws opened the door
to rapid expansion of the pharmaceutical industry. Small struggling biotechnology firms
were bought by growing pharmaceutical companies. As they continued to grow they
also bought smaller pharmaceutical corporations so that manufacturing became more
concentrated. The effect was to create national pharmaceutical oligopolies in a small
number of countries where drug manufacturing was concentrated.
In some cases the use of chemicals has often been a matter of trial and error, such
as the famous case of the discovery of the effects of Viagra which failed as a blood
pressure medicine but succeeded as a treatment for erectile dysfunction.
Since the 1980s advances in the understanding of DNA (deoxyribonucleic acid) and
the mapping of the human genome has been combined with computers to speed the
development of new drugs. Studies of metabolic pathways and ways to manipulate

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Encyclopedia of Stem Cell Research:

Pharmaceutical Industry

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them provided new ways to treat diseases. Growth in understanding of pathogens also
opened the way for the development of more effective drugs. Instead of development
by trialand-error computers can be used to tests thousands of drugs on thousand of
receptor sites on a relatively short period of time.
In the 1990s and the first decade of the 2000s, the challenges arose in the area of
marketing of drugs through massive advertising. Other challenges were [p. 427 ]
consumers seeking lower prices via new distribution system or mass purchase by
health maintenance organizations (HMOs) or preferred provider organizations (PPOs),
via internet sales, the lower cost of drugs from foreign countries, attacks by animal
rights activists on laboratory animal studies or everchanging government regulations.
The growing consumption of drugs by Americans combined with the marketing by the
pharmaceutical industry brought charges from some quarters of over merchandising to
an overmedicated society.
Today, there are strong economic and political motivations to advance new drugs. The
competition to develop new drugs is intense because the profits from breakthrough
drugs can be enormous. In the United States and some other countries, they are
heavily regulated. They are less regulated in many Third World countries. Government
regulations seek to accomplish a number of goals. One is to protect the public from the
modernday equivalent of the numerous snake oil salesmen who traveled the United
States in the 19th and early 20th century selling remedies that had little, if any, medical
benefit other than the soothing effects of a combination of alcohol and opium. Quack
remedies sold to innocent consumers as medical remedies are of dubious medical
value making money for the salesmen, but providing little more than false hope for the
consumer.
With advances in anatomy, biology, chemistry, toxicology, and the ability to manufacture
drugs as well as advances in statistical science, it became possible to conduct
clinical trials on drugs. The clinical trials seek to prove the effectiveness of a new
drug, its toxicity, its side effects, the appropriate dosage levels, and other important
considerations that ensure that the drug will minister to the health of the patient and not
harm or kill them.

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Encyclopedia of Stem Cell Research:

Pharmaceutical Industry

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Today, the Food and Drug Administration (FDA) regulates pharmaceutical

development in the United States. The FDA enforces standards set by the United
States Pharmacopoeia. In Europe, the European Union's agency for regulating the
development and application of pharmaceuticals is the European Medicines Agency
(EMEA). It enforces the pharmaceutical standards set by the European Pharacopoeia.
It also evaluates drugs developed in Africa and the Middle East. Regulatory agencies
besides the FDA include the International Conference on Harmonisation of Technical
Requirements for Registration of Pharmaceuticals for Human Use (ICH), the European
Medicines Agency (EMEA), Ministry of Health, Labour and Welfare (Japan), Medicines
and Healthcare products Regulatory Agency (MHRA), Central Drugs Standards
Control Organisation (India) (CDSCO), and others. Pharmaceutical companies are less
regulated in many Third World countries.

Leading Companies
Leading pharmaceutical companies include Abbott, Astrazeneca, BASF, Bayer,
Boehringer Ingelheim, BristolMyers-Squibb, CSL Behring, Eli Lilly, Ferring,
Glaxosmithkline, Grunethal, HoffmannLa-Roche, Johnson & Johnson, Merck,
Novartis, Novo Nordisk, Nycomed, Organon, Pfizer, SanofiAventis, Solvay
Pharmaceuticals, ScheringPlough, UBC, and Wyeth. Most of these belong to
industrial associations such as 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), or to other associations.
The associations serve as clearing houses for matters of common concern or as lobby
organizations for the industry. They promote the exchange of industry information and
provide a forum for discussing matters of common concern.
Pharmaceutical companies engage in many charitable programs. Sometimes these
include the donations of their products to treat diseases in Third World countries, such
as River Blindness drugs donated by Merck to African countries or Pfizer's donation

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Encyclopedia of Stem Cell Research:

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of AIDS drugs in South Africa. They also promote research or provide scholarships at
universities or to hospitals.
[p. 428 ] Large corporations attract a variety of detractors. The pharmaceutical
industry is no exception. In the litigious climate of the United States, successful tort
actions can net attorneys who successfully sue pharmaceutical companies millions
of dollars. Critics of the pharmaceutical industry often charge that the companies are
extorting people by charging high prices, which have little to do with the cost and
financial risk of research and development of the new drugs.
The role of pharmaceutical companies in the Third World has also been contested by
critics, who charge that the companies conduct clinical trials without the same level of
safeguards that exist in the United States. Some critics charge that the money spent on
research and development is only spent on diseases that are the most likely to yield a
higher reward. This criticism ignores the special rules that the FDA has to encourage
the development of orphan drugs. These are drugs that can be used to treat people
who have a disease that affects fewer than 200,000 people. Companies that develop
such drugs are rewarded with special tax reductions or other regulatory incentives.
Medicinal drugs are usually put into a dozen categories. Those used to treat humans
are classified according to the way that they affect the human body. Or they can be
classified by their chemical makeup, the disease they fight, by the effect they have on
the heart or blood vessels, or by their effect on the nervous system.
Numerous new drugs have been developed since the 1950s that have been separated
into prescription and nonprescription. However, the problem of drug abuse or excessive
health claims by some companies for nonprescription vitamins or other products has
forced closer supervision of some of these products.
Many observers of the pharmaceutical industry and futurists are predicting a bright
future for the industry. Advances in stem cell research are expected to generate a huge
new range of medicines that will cure a wide range of diseases or mitigate the effects
of others. The changes will impact the practice of medicine which has for decades
depended upon surgery or chemistry to accomplish its most important tasks.

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Encyclopedia of Stem Cell Research:

Pharmaceutical Industry

2008 SAGE Publications, Inc. All Rights Reserved.

SAGE knowledge

Using stem cells, the pharmaceutical industry should be able to program biological
material to accomplish a variety of tasks that have been impossible until now. These
would include organ regeneration, and organ or nerve repairs.
The advent of stem cell technology and its application will mean that the industry will
be more biotechnologically based. Instead of its own laboratories, it may turn to the
army of academic researchers providing the intellectual resources for developing new
therapies. It will also likely mean that a great many new companies will emerge or that
spinoff companies will move into specializing in a new product. Biologists will play a
much greater role in the development of a stem cell oriented pharmaceutical industry
than has historically been the case.
Andrew J.Waskey Dalton State College
http://dx.doi.org/10.4135/9781412963954.n212
See Also:

Biotechnology, History of
Stem Cell Companies

Bibliography
AntonioEscohotado, Brief History of Drugs: From the Stone Age to the Stoned Age
(Inner Traditions International, 1999)
H.Winter Griffith, StephenMoore, and KevinBoesen, Complete Guide to Prescription
and Nonprescription Drugs 2006 (Perigee, 2005)
AndreJungmittag, G.Reger, and T.Reiss, Changing Innovation in the Pharmaceutical
Industry: Globalization and the New Ways of Drug Development (Springer-Verlag,
2000)
MelodyPetersen, Our Daily Meds: How the Pharmaceutical Companies Transformed
Themselves into Slick Marketing Machines and Hooked the Nation on Prescription
Drugs (Farrar, Straus and Giroux, 2008)

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Pharmaceutical Industry

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SAGE knowledge

LesleyRichmond, AlisonTurton, and JulieStevenson. Pharmaceutical Industry: A Guide

to Historical Records (Ashgate, 2003)
Michael A.Santoro, Ethics and the Pharmaceutical Industry (Cambridge University
Press, 2007)
Glyn Stacey, ed. and John Davis, eds., Medicines from Animal Cell Culture (Wiley,
2007)http://dx.doi.org/10.1002/9780470723791
Jane Williams, ed. and Lorraine Griffin, eds., Insider's Guide to the World of
Pharmaceutical Sales (Principle, 2005).

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Pharmaceutical Industry