|
|
|
|
|
|
|
covery processes. Both Smith-Kline Beecham and Bristol-Myers Squibb were able to report strong growth in the years immediately following their mergers and introduced numerous new products ahead of key patent expiration [90]. |
|
|
|
|
|
|
|
|
Vertical integrations have resulted in pharmaceutical companies owning a large share of the Pharmaceutical Benefit Management market. Pharmaceutical companies are also purchasing wholesalers. Those manufacturers who have not vertically integrated may be shut out of the market. |
|
|
|
|
|
|
|
|
It is economic constraints that cause pharmaceutical companies to favor a core package of clinical and nonclinical studies that may require only minor additions to be suitable for submission in different countries. It is becoming impossible to support development of a drug that will not be able to penetrate the three major markets of the United States, Europe, and Japan [91]. Globalization has been a reactive response to economic demands rather than a proactive initiative to meet world pharmaceutical needs. Due to the need to optimize a company's high cost and high-risk R & D investment, it became obvious that drug development could not continue on a fragmented country-by-country basis. Drug development has become the catalyst for globalization and is also the driving force for mergers, acquisitions, and joint ventures (Figure 4) [92]. |
|
|
|
|
|
|
|
|
Economics is also restructuring the biopharmaceutical industry. In 1992, figures from the U.S. Patent and Trademark Office (PTO) indicate that 69% of biotech health care patents were of U.S. origin. Although U.S. companies continue to maintain their worldwide lead in biotechnology research and more than 300 products are currently wending their way through the approval process, we are witnessing an increase in foreign biotechnology investment [93]. |
|
|
|
|
|
|
|
|
Pharmaceutical companies are forming webs of partnerships and corporate alliances with biotech companies and outplacing internally developed technology. More than 30 major agreements were made in just the first quarter of 1994 compared with 14 during the same period in 1993. In addition to strategic alliances, biotech companies are utilizing alternative financing options. These include PIPEs (private investments in public entities), double-edged SWORDS (stock warrant, off-balance-sheets, R & D financings), SIRRS (stock index reset rights) and others (Table 3) [94]. These new financing vehicles could constitute a major trend in the industry's method of raising capital. In fact, venture capital investments in biotech companies grew from $459 million in 1993 to $639 million in 1994 and an analysis of their financial statements indicates a 27% increase in R & D spending [95]. |
|
|
|
|
|
|
|
|
Funds to support clinical trials are drying up. For example, in the area of cancer research, the National Cancer Institute at NIH now funds less than 15% of research proposals, mostly for laboratory research [96]. The pharmaceutical industry has, consequently, assumed a larger role in supporting cancer research. |
|
|
|
|
|