Research and Development in pharmaceutical industry

Pharmaceutical industry is part of economy sector which sees a very high growth rate. No wonder than that the sector invests large sums in research and development (R&D). This article will discuss briefly the definition and classification of R&D in this field.

Research and development

Research and development involves a number of measures whose aim is to improve the innovation level of manufactured products. Starting with identification of novel molecules to state-of-the-art formulations, R&D departments in pharmaceutical companies worldwide regularly monitor industry news to steadily improve the quality of their products and make them more attractive and also expand their portfolios. A traditional definition of research and development in pharmaceutical industry includes all activities related to the development and approval of novel pharmaceutical ingredients, that is, innovative drugs. This certainly involves the greatest expenditure of work and money and represents the highest innovation level, but it is not as important in terms of shares in the retail market. In 2020, 97 positive decisions on marketing authorization were issued by the European Medicines Agency (EMA) for drugs, of which only 39 concerned novel active substances.[1] Generic drugs were the leading group whose market share was 2/3 of prescription-only medicines in Poland and as much as 81% in Germany according to the 2017 OECD Health at a Glance Report.[2]

Retail market share

As well as prescription-only medicines, the sector of OTC products offers an immense potential for pharmaceutical companies. The 2020 analysis of Poland’s pharmaceutical market by IQVIA[1] shows that OTC products, medical devices and dietary supplements, referred as “Customer Health product” ― CH account for as much as 45% volume (Fig. 1). In addition, compared to others, the sector showed good growth dynamics in 2020, it was undoubtedly related to the COVID-19 pandemic and associated problems with access to medical care. (Fig. 2).

Fig. 1 Market (source: https://www.iqvia.com/-/media/iqvia/pdfs/cese/poland/rynek-farmaceutyczny-w-2020-roku-w-polsce.pdf?_=1627035480557)

As the only pharmaceutical market sector, CH products showed an increased number of new products compared to 2019 (Fig. 3)

Therefore, a number of companies follow a growth path focused on the development of generic products, including OTC, as well as medical devices and dietary supplements.

Product development

R&D processes in this area include development of product technology, analytical procedures and stability testing as well as regulatory works related to product approval, necessary for placing a product on the market. Formulation of a new product is part of technology development. Adequate selection of active ingredients and excipients, supported by the latest literature reports and expertise of formulation specialists, is of paramount importance. The aim of initial laboratory work is to precisely characterize all substances used in the product with their potential modifications and evaluation of physicochemical properties so that the whole process can be expanded to a large manufacturing scale. Together with stability, product formulation should also be appropriately adapted to the patient’s or consumer’s preference. Therefore, it should consider not only good taste and appearance but also a form adapted to various target groups (such as children or the elderly).[1]

Formulation should ensure the highest product quality possible to be confirmed by analytical and stability tests. Pharmaceutical products must comply with pharmacopoeial standards for medicinal products and medical devices and food regulations for dietary supplements, as well as other standards. In addition, stability tests according to the ICH (Q1A-Q1F) WHO guidelines for various climate zones are performed in certain circumstances. Furthermore, microbiological tests of raw materials and finished products are performed within analytical testing, according to pharmacopoeial or ISO standards.

Contract service

The complexity of R&D in pharmaceutical industry makes it very cost intensive and availability of manufacturing and research resources is needed. This in many cases limits the growth of smaller companies. Therefore, outsourcing has been on the rise in pharmaceutical industry for a long time, and the traditional business model in which one company pursues the whole product development is increasingly less applicable. As it meets market expectations, Curtis Health Caps is an example model CDMO (Contract Development and Manufacturing Organization) as it specializes in contracted development and manufacturing of soft capsules and non-sterile liquid formulations.