We are working on tomorrow’s medicines, for diseases of which we are losing the battle today
Drug development is risky, costly and time-consuming, but it is also much needed. We are committed to promoting innovation in the pharmaceutical sector, strengthening the sector’s international position and improving the business climate in the Netherlands
Before a drug is approved and available to patients, each (new) drug must first go through an extensive pathway.
All drugs are first tested in the laboratory. This allows for proper research into the properties and action of a molecule. In the clinical phase, research is carried out into the effect of a candidate drug. First in healthy volunteers, then in a small group and then in large groups of patients.
After completing all clinical phases, enough information is available about the effectiveness and safety in different situations. The developer can then submit an application for market authorization to the authorities. They assess whether the data provides sufficient evidence to allow the drug to enter the market.
If the drug is admitted to the market, it still needs to be registered and reimbursed in each country. In the meantime, production capacity is being established.
Each year, medicine companies, physicians and scientists examine tens of thousands of substances for their potential to treat disease.
Only a small number of these will ever be promising enough to test in patients. Only a fraction of these will one day produce results good enough to reach the market. After the preclinical phase, about 89% still drop out.
There are several reasons for a drop out. For example, because there are too many side effects, the drug is not safe or because the new drug has too few advantages over current drugs.
Drug development is a symbiotic process, where multiple parties strengthen each other by working together. They are not separate circuits, but parties that are in one ecosystem and cannot do without each other.
It is therefore of great importance to further strengthen the collaboration between academia, healthcare, governments and drug companies. Among other things, by recognizing each other’s expertise and role, maintaining innovation incentives and promoting a culture of collaboration.
The common goal is to make and keep new innovative medicines available to patients.
Drug development is costly, risky and time-consuming. It costs an average of €2.2 billion to develop, test and bring a new drug to patients.
Over half of these are capital costs. These costs consist of the remuneration that investors, such as pension funds or health insurers, demand for their capital. They charge a higher fee the longer they make their capital available. This increases in the approximately eleven years required for drug development. The cost of failed research also accounts for a large portion of development costs. This is because the vast majority of drugs do not make it to the finish line.
A key solution to reducing capital costs is to be able to predict as early as possible in the development process which drugs have potential and which do not.
Developing and marketing a new medicine is a race against time. After registration of a patent, the owner has 20 years to develop the innovation into a safe and effective medicine. During this period, other parties may not bring the same drug to the market.
The moment a medicine becomes available to patients, much of the exclusivity period has already expired. After market introduction, some time is needed to reach a reimbursement agreement. Moreover, it takes time and investments to bring the new medicine to the attention of prescribers and to update the treatment guidelines. The monopoly position, in which the bulk of the investment must be recouped, is therefore limited to approximately 5 to 8 years. After the exclusivity period expires, other companies may copy the drug and market it. Competition reduces the price by about 85%.
At all times, a drug company runs the risk that a competitor will market another drug for the same disease that works better.
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