Fundamentals of Bioinformatics - Ogurtsov, A.N. 2013

Information Principles in Biotechnology
Bioinformatics in Pharmacy
Global Pharmaceutical Industry

An Overview of the global pharmaceutical industry is provided in an article by V.B. Kondratiev, published on July 18, 2011, on the "Perspektivy" website; the main points of this review are outlined below.

The pharmaceutical industry encompasses the development, manufacturing, and marketing of licensed drugs and medications. This sector is characterized by diverse regulatory and legislative frameworks governing patenting, testing, as well as the safety and efficacy of manufactured drugs.

The origins of pharmacies date back to the Middle Ages. The first apothecary shop emerged in 754 in Baghdad, after which they rapidly spread across medieval Islamic countries and Europe. By the 19th century, many pharmacies in Europe and North America had evolved into major pharmaceutical companies. The majority of today's pharmaceutical firms were established as early as the late 19th to early 20th century.

The 1920s and 1930s saw the discovery of Insulin and penicillin, which became vital mass-produced drugs. During those years, Switzerland, Germany, and Italy possessed the most developed pharmaceutical industries, followed by the United Kingdom, the United States, Belgium, and the Netherlands. This same period marked The Development of legislation regulating drug testing and certification processes, and mandating appropriate branding. Prescription and over-the-counter drugs were legally separated.

The 1950s were characterized by systematic scientific research, advancing medical knowledge, and improving production technologies. During this period, A large number of new drugs were developed and widely distributed, including cortisone and various cardiovascular agents. The 1960s witnessed The Emergence of tranquilizers and psychotropic medications, such as chlorpromazine, haloperidol, and diazepam, which found exceptionally widespread application. Concurrently, efforts were made to strengthen government regulation and limit the financial ties between pharmaceutical companies and prescribing physicians, reflected notably in the ESTABLISHMENT OF THE U.S. Food and Drug Administration (FDA). It became evident, for instance, that the uncontrolled use of one of the new tranquilizers, thalidomide, by pregnant women resulted in children being born with various Congenital Malformations.

In 1964, the World Medical Association issued the Declaration of Helsinki, establishing ethical standards for clinical research. Pharmaceutical companies were required to prove the efficacy of new drugs in clinical settings prior to launching them on the mass market.

The 1970s were the era of anti-Cancer drugs. Since 1978, India has emerged as a leading center for The production of Pharmaceuticals without patent protection. Until the 1970s, the pharmaceutical industry remained a relatively small sector of the economy. It is from this time that its period of rapid growth begins, with most countries adopting stringent patent legislation.

By the mid-1980s, small biotechnology companies, striving for survival, actively forged alliances and partnerships with major pharmaceutical corporations or sold them their equity. A process of consolidation and scaling-up took place within the pharmaceutical industry itself, with the largest firms attaining a dominant position not only nationally but also in the global pharmaceutical market. The 1980s saw stricter safety and environmental regulations, while new drugs targeting HIV infections and Heart disease became the hallmark of the decade.

The 1990s were marked by a wave of mergers and acquisitions in the pharmaceutical market, alongside a sharp increase in contracts with contract research organizations (CROs) for clinical trials and fundamental research and development. The marketing process changed dramatically. The Internet enabled direct-to-consumer purchases of medications as well as raw Materials by drug manufacturers, fundamentally altering The Nature of the business.

In the United States, following the passage of new legislation in 1997 that liberalized risk disclosure requirements, direct-to-consumer advertising of pharmaceuticals on radio and television became widespread. A new generation of antidepressants emerged, including the highly popular Fluoxetine. The so-called alternative medicine and dietary Supplement industries began to develop actively, intensifying competition within the pharmaceutical sector. At the same time, pharmaceutical companies became the target of mounting public criticism for attempts to "manufacture" new diseases and, correspondingly, the drugs designed to "combat" them. To better understand the operational Features of the pharmaceutical industry, it is essential to examine Key Concepts such as Drug Discovery and drug development.

Drug discovery refers to the process by which potential medications are discovered or designed. Historically, the majority of drugs emerged from the isolation of active ingredients from traditional remedies or As a result of serendipitous discoveries.

Modern biotechnology focuses on investigating the metabolic processes occurring during specific diseases or pathological states, utilizing molecular biology, bioinformatics, and biochemistry. The Cytology/cytology/16.html">Early stages of the drug discovery process are traditionally carried out largely by universities and research organizations.

The process of developing a new pharmaceutical drug is conventionally divided into fourteen stages.

1. Understanding the biological basis and symptoms of the disease. Is it caused by:

- an infectious agent such as a bacterium, a virus, or another pathogen;

- a toxic substance of non-biological origin;

- a mutant protein originating from the patient's own body.

2. Developing a testing methodology. When selecting a drug candidate, can it be tested for:

- its effect on Microbial growth;

- its effect on Cell growth in tissue culture;

- its effect on diseased animals;

- its binding affinity to a known target protein.

3. Is there an effective remedy used in traditional medicine? If so, proceed to step 6.

4. Identifying a specific molecular target, typically a protein. Determining its Structure experimentally or through molecular modeling.

5. Determining what type of compound will fit the target's binding site. Is there a known substrate or inhibitor?

6. Finding a lead (commonly referred to as a lead compound): a substance displaying detectable biological activity. A lead is merely a stepping stone for further development; its discovery and subsequent modification (with the aim of creating a drug) are fundamentally different processes.

7. Lead optimization: extensive study of derivatives to impart the desired properties and activity to the compound.

8. Preclinical testing (preclinical stage): in vitro or animal studies demonstrating efficacy and safety. A drug may be patented at this stage. (In practice, patenting is often delayed as long as possible due to the finite lifespan of a patent, given the many lengthy phases that still precede commercialization.)

9. In the United States, this involves submitting an Investigational New Drug Application (IND) to the Food and Drug Administration (FDA). This is followed by three phases of clinical trials.

10. Phase I clinical trials: safety testing conducted on healthy volunteers. Researchers investigate how the drug affects the body—specifically how it is absorbed, distributed, metabolized, and excreted (ADME). The results provide the basis for determining dosage.

11. Phase II clinical trials: efficacy testing involving approximately 200 patient volunteers. Does the drug treat the disease or merely alleviate symptoms? Dosage is refined during this phase.

12. Phase III clinical trials: testing on approximately 2,000 patients to demonstrate that the new drug outperforms previous treatments. This is achieved through double-blind testing to rule out the placebo effect and determine whether the new drug improves outcomes compared to existing therapies. These trials are extremely expensive, and Phase III testing is often abandoned if Phase II reveals significant adverse side effects.

13. FDA registration, containing data supporting safety and efficacy. FDA approval grants the right to market the drug.

14. Phase IV (post-marketing) clinical trials: studies following FDA approval and commercial release that involve ongoing monitoring of drug efficacy, capturing real-world usage data on the widest possible scale to identify any additional side effects that may emerge in certain patients during Treatment. If such effects are found, the drug's use may be restricted or even prohibited.

Lead Compound (Lead). A primary objective in the early stages of drug development is the identification of one or more lead compounds.

A lead is any compound that exhibits the desired biological activity. It should meet at least some of the required criteria:

✵ safety;

✵ efficacy;

✵ both chemical and metabolic stability;

✵ bioavailability;

✵ accessibility—The ability to be obtained from natural sources or via chemical synthesis;

✵ novelty (freedom to operate / patentability).

There are several approaches to discovering leads.

1. Serendipity: the classical example is penicillin.

2. Exploration of natural sources. "Grind and find!" is the motto of medicinal chemists. Traditional remedies sometimes point the way to active compounds. For instance, digitalis was extracted from foxglove leaves, long used to treat Heart Failure.

3. Examination of existing data on substrates, inhibitors, and the MECHANISM OF ACTION of the target protein, followed by the Selection of potentially active substances based on these characteristics.

4. Evaluation of existing drugs used for similar diseases for potential repurposing.

5. High-throughput screening. Combinatorial chemistry Methods allow for the parallel testing of vast numbers of similar substances. Phage display is a specialized technology well-suited for testing Polypeptides.

6. Exploitation of side effects from existing medications. Minoxidil, initially developed as an antihypertensive drug, proved to be a Hair growth stimulant. Another example is Viagra (sildenafil), which was originally developed to treat heart conditions.

7. Screening. The U.S. National Institute of Health's National Cancer Institute has identified tens of thousands of potential compounds through screening programs.

8. Computer screening and ab initio computer-aided design.

Once a hit is discovered, its optimization begins, which involves modifying the lead structure to develop derivatives (candidate drugs) with the best possible therapeutic profiles. Lead derivatives must be thoroughly tested to enhance their efficacy and impart other essential properties. For instance, a compound that binds to its biological target cannot be considered a drug unless it successfully reaches that target. Delivering a drug to its target within the Organism requires proper absorption and transport. The drug must be sufficiently Water-soluble to be absorbed, yet not so soluble that it is immediately eliminated from the body. It must also be sufficiently lipophilic to cross cell membranes, but not to the extent that it accumulates in fatty Tissues.

In the global pharmaceutical industry, drug development officially begins once its primary active components have been identified. Key objectives of this phase include determining the appropriate formulation and dosage, as well as ensuring product safety. Research in these areas typically encompasses in vitro and In Vivo Studies, followed by clinical trials. Because the core stages of new drug development require massive capital investments, this process is predominantly driven by large pharmaceutical companies.

Major multinational corporations frequently practice vertical integration, operating simultaneously across multiple segments—ranging from drug discovery and development to manufacturing, quality control, marketing, sales, and distribution. Smaller companies, by contrast, often focus on specific niches within the pharmaceutical sector, such as developing individual drug components or specific formulations.

The process of drug discovery and development is exceptionally capital-intensive. Out of all candidate molecules investigated, only a tiny fraction successfully clears regulatory approval and receives a marketing authorization.

On a global scale, an average of only 25 new pharmaceutical drugs receive marketing approval each year.

Such approval is granted only after massive investments in preclinical development, clinical trials, and ongoing pharmacovigilance (safety monitoring). Many drug candidates fail to pass these rigorous Procedures, yielding no return on the invested capital. When factoring in the costs associated with these pipeline failures, the total cost of bringing a single successful drug to market (including marketing and distribution expenses) can reach as high as $2 billion.

Such estimates are inherently relative, as they often omit regulatory costs, government subsidies, tax breaks, and federal research grants. Consequently, the actual costs of bringing new drugs to market may be significantly higher.

In the United States, new pharmaceutical products are approved by the FDA. This process requires submitting an extensive body of preclinical data on the new drug, followed by the three traditional phases of clinical trials. The U.S. framework includes special provisions for orphan diseases affecting fewer than 200,000 people. Because the research and development costs for orphan drugs are exceptionally high and financially unviable under standard market conditions, the U.S. government incentivizes pharmaceutical companies through tax credits, subsidies, and exclusive market access rights for a designated limited period (typically seven years), regardless of whether the drugs are protected by patents.

In 2006, the total size of the global pharmaceutical market was estimated at $640 billion, with the United States accounting for nearly 50% of it. The pharmaceutical industry remains one of the most profitable sectors, maintaining a profit margin of around 17%.

The world's best-selling drug is Pfizer's Cholesterol-lowering medication Lipitor, with annual sales reaching $13 billion in 2008—more than double the sales of its closest competitors: Plavix, a cardiovascular medication by Bristol-Myers Squibb, and Advair, an asthma medication by GlaxoSmithKline.

Table 22 provides data on the leading global pharmaceutical and biotechnology companies. Collectively, they form the so-called "Big Pharma" group, which includes companies with annual sales exceeding $3 billion and research and development (R&D) expenditures exceeding $500 million.

Class="center">Table 22 — Leading Global Pharmaceutical Companies in 2008

Any pharmaceutical company can apply to relevant government agencies for a patent on a drug or its manufacturing process, granting exclusive commercial rights typically for a period of 20 years. However, this entails rigorous testing and evaluations, taking an average of 10 to 15 years, after which the company finally receives marketing and sales authorization. Patent protection allows the patent holder to recoup research and development costs through high profit margins on branded drugs.

Once patents expire, competing companies typically develop generic equivalents. Generics involve lower development and regulatory approval costs, allowing them to be sold at significantly lower prices. Frequently, the manufacturer of the original branded drug will begin producing its own generic version even before the patent expires in order to capture that market segment.

The pharmaceutical market is characterized by a high frequency of mergers, acquisitions, and strategic partnerships aimed at leveraging complementary capabilities. Smaller biotech firms may hold patents for breakthrough drugs but lack adequate sales and marketing infrastructure. Conversely, large corporations often possess underutilized commercial capacity. Consequently, both entities seek collaborative opportunities to enhance capitalization through the synergistic effects of cooperation.

Over the past three decades, the total cost of bringing new drugs to market in developed economies has increased nearly tenfold. High attrition rates, the expense of increasingly lengthy clinical trials, and growing regulatory hurdles are the primary drivers behind this rapid cost inflation.

Of the total R&D expenditures—which account for 18–20% of pharmaceutical sales—approximately 27% are allocated to preclinical research. Nearly 54% of expenditures go toward clinical trials, 5% is spent on regulatory approval processes, and 14% is dedicated to post-approval Phase IV and supplemental studies.

For many years, Europe was the leading region in novel drug development. However, since the mid-1990s, leadership in both pharmaceuticals and biotechnology has shifted to the United States. The U.S. accounts for 60% of new drug introductions, compared to 29% for European nations and just 4% for Japan. This dynamic stems from the fact that in recent years, the U.S. has dedicated a significantly larger share of its GDP to research and development than European countries. In 2008, these figures stood at 2.76% and 1.90% of GDP, respectively. Among European nations, only Finland (3.75%) and Sweden (3.73%) boasted higher relative spending levels.

The dominant position of the United States is primarily driven by its vastly superior biotechnology sector, which forms the core of modern pharmacology. Translating Human Genome insights into clinical practice and novel drug design enables physicians to predict patient responses to specific therapies and develop personalized medicine tailored to individual genetic profiles. The Implementation of such treatments not only reduces disease incidence but also transforms the entire healthcare delivery model by shifting the focus toward preventive medicine.

According to international statistics, the pharmaceutical industry is the most knowledge-intensive and innovative sector in the global economy, boasting the highest value-added per employee and R&D-to-sales ratios. This sector holds a preeminent position within the industrial STRUCTURE OF THE United States (Table 23).

As shown, the three most R&D-intensive industries in the U.S. account for 64% of all industrial research and development, compared to 33% in Europe and 22% in Japan. This positioning secures global technological leadership for the United States.

Table 23 — Industrial Structure of R&D Across Various Regional Economies in 2008 (Percentage)

Developed nations with robust pharmaceutical industries do not provide direct state subsidies to the sector, yet they actively foster the advancement of emerging research fields such as biotechnology, Introduction/32.html">Genetic Engineering, and others.

In the United States, for instance, government backing for the pharmaceutical sector is primarily administered at the regional level by promoting the life sciences, biotechnology, and innovation. For example, in the mid-2000s, the State of Texas allocated nearly $1 billion to expand existing biotechnology research laboratories and establish new ones. In New York State, more than 20 educational institutions serving the needs of the pharmaceutical industry receive funding through the New York State Center for Advanced Technology (NYSTAR) and related state-supported innovation programs.

Developing countries, on their part, implement comprehensive support for the pharmaceutical industry across all dimensions: access to financing, manufacturing investments, workforce development, infrastructure, and investments in research and development (R&D).

Active government backing of the pharmaceutical industry has enabled several developing nations—chiefly India and China—not only to protect their domestic markets but also to successfully break into international ones. The market share held by domestic manufacturers currently stands at 70% in China and 80% in India. The state has played an active role in elevating the global profile of these countries: between 1999 and 2007, the share of Indian and Chinese companies in the global pharmaceutical market surged from 6.5% to 9.4%.

Neither Ukraine nor Russia possesses major homegrown pharmaceutical companies of their own. Those that do exist are being crowded out of the market by foreign manufacturers. Consequently, the market share of domestic producers in Russia shrank from 28% in 2003 to 20% in

2008, while the share of imports correspondingly rose from 72% to 80%. Russian companies are primarily engaged in the manufacturing of low-value-added products. Domestic production accounts for a mere 3% of the innovative pharmaceutical consumption structure in the Russian market, with imports comprising the remaining 97%. Russian output reaches a 52% share solely within the consumption of unbranded generics.

The development of pharmacology in CIS countries is hindered by A number of severe challenges. Unless addressed, these nations risk permanently losing their national pharmaceutical industries. First and foremost, this concerns the inefficiency of state policy regarding the sector. The persistent low priority long assigned to the industry has resulted in a lack of systematic government backing for the domestic pharmaceutical sector, contrasting sharply with the approach in competing countries, particularly developing ones. Tax incentives to stimulate the industry's growth—including support for exports and R&D expenditures—are notably absent.

The low competitiveness of domestic enterprises compared to foreign counterparts (both in external and domestic markets) is primarily driven by small-scale production volumes.

For instance, the sales volume of Russia's largest pharmaceutical company, Pharmstandard, amounts to less than $0.6 billion, whereas the figure for Novartis, a leading global Swiss corporation, reaches $53 billion. Moreover, R&D budgets are entirely incomparable: the combined R&D expenditures of the top five Russian companies total $15-20 million, compared to $7 billion for Novartis. In other words, the largest Russian companies are pharmaceutical dwarfs. All of this applies to an even greater extent to the pharmaceutical sector of Ukraine.

It is fair to argue that both Russia and Ukraine have virtually lost their pharmaceutical industries. Today, the most efficient enterprises have been sold off to foreign entities, while those remaining struggle to survive. Domestic companies and scientists maintain their competitiveness in biotechnology, yet they must be provided with the conditions necessary for growth. When the share of domestic manufacturers in public pharmaceutical procurement falls below 3%, any Discussion of innovative development—or even mere survival—becomes out of the question. Dependence on imported pharmaceuticals threatens the quality of life, public health, and national security: foreign suppliers provide us not only with sophisticated modern medications but also with critical Vaccines and Antibiotics, which form the bedrock of pharmacological security.