Drugs and pharmaceutical marketing

Drugs have been discovered either by isolating the active ingredient from traditional remedies or by serendipitous discovery. Modern biotechnology often focuses on understanding the metabolic pathways related to pathogen, and manipulating these pathways using Biochemistry or molecular biology. A great deal of early-stage drugs discovery has traditionally been carried out by research institutions.

Drug development refers to activities undertaken after a compound is identified as a potential drug in order to establish its suitability as a medication. Research in these areas generally includes a combination of in vitro studies, in vivo studies, and clinical trials. Objectives of drug development are to determine appropriate Formulation and Dosing, as well as to establish safety. The amount of capital required for late stage development has made it a historical strength of the larger pharmaceutical companies.

Often, large multinational corporations exhibit vertical integration, participating in a broad range of drug discovery and development, manufacturing and quality control, marketing, sales, and distribution. Smaller organizations, on the other hand, often focus on a specific aspect such as discovering drug candidates or developing formulations. Collaborative agreements between research organizations and large pharmaceutical companies are formed to explore the potential of new drug substances.

For the first time ever, in 2006, global spending onprescription drugs topped $643 billion, even as growth slowed somewhat in Europe and North America. The USA accounts for almost half of the global pharmaceutical market, with $289 billion in annual sales followed by the Europe and Japan Emerging markets such as China, Russia, South Korea and Mexico outpaced that market, growing a huge 81 percent.

United State profit growth was maintained even whilst other top industries saw slowed or no growth. Despite this, "..thepharmaceutical industry is — and has been for years — the most profitable of all businesses in the U.S. In the annual Fortune 500 survey, the pharmaceutical industry topped the list of the most profitable industries, with a return of 17% on revenue."

Pfizer's cholesterol pill Lipitor remains the best-selling drug in the world for the fifth year in a row. Its annual sales were $12.9 billion, more than twice as much as its closest competitors: Plavix, the blood thinner from Bristol-Myers Squibb and Sanofi-Aventis; Nexium, the heartburn pill from AstraZeneca; and Advair, the asthma inhaler from GlaxoSmithKline.

IMS Health publishes an analysis of trends expected in the pharmaceutical industry in 2007, including increasing profits in most sectors despite loss of some patents, and new 'blockbuster' drugs on the horizon.

Teradata Magazine predicted that by 2007, $40 billion in U.S. sales could be lost at the top 10 pharma companies as a result of slowdown in R&D innovation and the expiry of patents on major products, with 19 blockbuster drugs losing patent.