Market potential, drug development

The FDA s approval process for new prescription drugs is extensive. It can take over ten years for a drug to reach the market. Before receiving FDA approval, a new drug must be studied extensively. The process begins with the discovery or development of a new substance that can be used for medicinal purposes. The potential drug is first studied in a laboratory, then in animals. It is then studied in healthy adults to see what... 

These plans envision composition-of-matter patents on drug molecules for which development timelines and market potentials can be estimated. Product stories are the clearest, most rational plans because profitable sales can be projected and rNPVs calculated. On the other hand, investors usually perceive higher risks because the rNPVs tend to be dominated by single product candidates for which historical failure rates are high. Examples of product stories include Amgen s development of Epogen and Amylin s development of Symlin. 

These plans envision assembling a portfolio of in-licensed drug candidates for which collective development risk is deemed to be relatively low. The idea is to in-license molecules that either are too specialized (small market potential) for large pharma or are not visible to their radar because they come from places like Eastern Europe. These stories are favorites of professional investors, because rNPVs can be calculated with relatively low development risk on the basis of demonstrated clinical utility and/or pipeline diversity. Examples include Dura Pharmaceuticals, who marketed prescription products that treat infectious and respiratory diseases, and Gilead who marketed antiviral nucleotides discovered in the Czech Republic. 

There has been a revival in the use of traditional medicine (TM) in the last decade. TM is also called complementary or alternative medicine (CAM). It is likely that this revival trend will continue when there are still unmet needs to be hlled by Western drugs. The quandary with Western drugs is that pharmaceutical hrms have to ensure a reasonable return on shareholders investment. With many drug discovery and development programs costing billions of dollars, most pharmaceutical firms concentrate on blockbuster drugs with large market potential. The way is thus left open for the treatment of many diseases by other means such as TM. 

The market potential of a drug or device is clearly critical in determining the desirability of proceeding into later phase development. An increasing number of programmes are stopped at Phase II because it is not economical for the company to develop these products. DiMasi in 2001 estimated that, compared with the 1981-6 period, where 29.8% of products were terminated because of economic reasons, between 1987 and 1992 the number of terminations was 33.8% and that this upward trend has continued. 

Potential new drugs that show acceptable toxicity in animals are usually first tested in healthy human volunteers before being investigated in patients. Chapters 3-6 deal with these aspects of new drug development, and it is the purpose of this chapter to consider how safety should be evaluated at the time of the product licence application and in the post-marketing phase. 

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