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OVERVIEW
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became the most popular drug of all time. With the start of World War I in 1914, the patents and trademarks of German factories in countries at war with Germany were sequestered. Forced to stop trade with Germany, many of the countries at war with Germany began manufacturing dyes on their own. What s more, the 1919 Treaty of Versailles forced Germany to provide its former enemies with large quantities of drugs and dyes as part of war reparations. The United States government con scated and auctioned off all of Bayer s American assets, including the names Bayer and aspirin and associated trademarks which remained outside the German company s control until it bought them back from SmithKline Beecham in 1994. Despite major setbacks from the pre-war pharmaceutical boom, by the 1930s, the German pharmaceutical industry was in modest recovery, pro ducing insulin under license from Canadian researchers, and synthesizing sulfa drug antibiotics from dyes. In addition, German companies such as Hoechst manufactured penicillin on a large scale through the early 1940s and into World War II. The demand for antibiotics increased dramatically during World War II, sparing the lives of many soldiers with wounds that would have been considered lethal in World War I. The aftermath of World War II also accelerated the development and production of antibiotics for civilian use, and several new pharmaceutical companies sprang up worldwide to ll the growing demand for antibiotics. Growth was fueled by the brisk demand for second-generation antibiotics, such as streptomycin and neomycin, because of the bacterial resistance that developed in response to the liberal use of penicillin. The biotech startup phenomena of the 1970s, which was centered in the United States, sparked further development in the pharmaceutical industry. These biotech compa nies were technology driven and primarily run by those with little real ex perience in the pharmaceutical industry, and with little knowledge of the lengthy drug development process and its associated regulatory hurdles. As a result, most of these rms failed. The ones that survived did so through mergers with other startups and by being acquired by established pharma ceutical companies.
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Despite the initial hype and resulting correction in the biotech industry in the 1980s and 1990s, the promise of decreased time to market and new, custom drugs continues to fuel investment in the industry. Rapid, patientspeci c drug development through rational drug design, in which com puter methods are used to design custom drugs, as opposed to the traditional hit-or-miss approach of testing herbs, compounds, plant sam ples, and folk remedies for effectiveness on patients with a particular
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Pharmaceuticals
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condition, is viewed by the pharmaceutical industry as the irresistible lure of biotech. The pharmaceutical industry, which is second only to the government in supporting postgenomic R&D, has a lot at stake in its quest for designer drugs that provide more ef cacy, fewer side effects, and treat conditions unresponsive to traditional therapies. Designer drugs are intended to work with a speci c patient s genetic pro le, as determined, for example, by the genetic analysis of a patients blood. In theory, once the most appropriate candidate drug is identi ed, the pharmaceutical company will create the appropriate drug using recombinant DNA or other technology. In addition to protein-based designer drugs, pharmaceuticals based on nucleic acids (for example, gene therapy) and carbohydrates (glycomics) promise to cre ate new markets for anti-in ammatories, as well as drugs targeting im mune disorders and cancer.
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The promises of biotechnology in the Pharmaceutical industry have yet to materialize in a meaningful way. Although most traditional pharma ceutical companies are developing drugs created through recombinant DNA and other biotech methods, biotech products represent less than 10 percent of the pharmaceutical market. Speculative investment in biotech, like that in the dot-coms, has dried up. Despite a drug develop ment pipeline lled with numerous biotech drugs, many have failed to survive the gauntlet of clinical trials imposed by regulatory agencies. Moreover, the drugs that manage to reach the marketplace tend to be signi cantly more expensive than traditional pharmaceuticals. Despite all of the hype, biopharmaceuticals (pharmaceuticals created using biotechnology) represent only about $35 billion of the quarter-trilliondollar pharmaceutical market. Furthermore, most of these products are from a handful of companies, notably Amgen, Boehringer Ingelheim, Biogen, Genetech, and Idec Pharmaceuticals. The greatest challenge and potential of biopharmaceuticals are rooted in the drug development process, which is illustrated in Figure 1.3. The rst step in the process practiced in the United States, drug discovery, can take anywhere from 2 to 20 years or more to complete. For example, a representative of a pharmaceutical company working with a shaman in the Amazon basin to identify plants of medicinal value might uncover a plant used by natives to treat a particular disease for generations. How ever, the researcher can t simply bring the plant to his laboratory in the United States, identify and then synthesize the active ingredients, and be gin marketing the drug for particular uses. A claim of ef cacy, even if backed by records of centuries of use in folk medicine, isn t suf cient for a
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