The pharmaceutical industry is devoted to the discovery, development, production and commercial of pharmaceutical products, with the purpose of alleviating suffering caused by illnesses or ailments, lengthen life and improve its quality.

The parent companies of the PIA-PR members do scientific research and develop new products. Their subsidiaries on the Island are, in their great majority, manufacturers. Here they produce a great variety of products to serve the local, U.S., and foreign markets. The commercial companies which are also subsidiaries of the main companies, serve our market with products elaborated here by their sister companies and with other products from their corporation, not manufactured in Puerto Rico.

The pharmaceutical manufacturing companies in Puerto Rico are governed under the norms of security, quality, purity and effectiveness established by the Food and Drug Administration (FDA) as well as by the environmental protection rules established by the Environmental Protection Agency (EPA) and the corresponding local agencies. Also, they respond to internal codes of production and environmental protection that often are more rigorous than those established by law.

Drug Approval System

The drug approval system in the United States is, maybe, the most rigorous process in the world. According to data disclosed by the Boston Consulting Group in January of 1998, a company (pharmaceutical) pays, on the average, $500 million to obtain a new medicine and to offer it to patients in North America.

A new study shows that U.S. pharmaceutical companies pay in excess of $500 million more today than they did in 1987 to bring each new
product to market, a finding that further diminishes hopes for a cure to skyrocketing drug costs.

Findings released this month by the Tufts Center for the Study of Drug Development indicate that in the last 15 years, the cost of bringing a single drug to market has risen from an average of $231 million to $802 million.

The study attributes much of the increase to the soaring expense of federally mandated clinical trials, in which the safety and effectiveness of new pharmaceutical products are tested on animals and human volunteers.

The lengthy process of drug discovery, development and testing is a major factor in the expense. It typically takes between 10 to 15 years for a drug to wind its way through the process and make its way to pharmacy shelves.

The increase reported by the Tufts researchers is several times greater than the national rate of inflation over that period, according to Joseph A. DiMasi, director of economic analysis at the center. Had drug development costs been consistent with inflation, the increase would have amounted to about $318 million, DiMasi said.

"The difficulty in recruiting patients into clinical trials in an era when drug development programs are expanding, as well as the increased focus on developing drugs to treat chronic and

degenerative diseases, has added significantly to clinical costs," DiMasi told the newsletter BioNews. It is published by Bio, an organization representing the nation's pharmaceutical and biotech companies based in Washington, D.C.

Research and development costs for each new drug increased an average 2.5 percent when adjusted for inflation, the study found. The cost of conducting clinical trials, a requirement of the federal Food and Drug Administration, was five times more than the preclinical research component, DiMasi noted.

In addition to evaluating expenditures in the areas of discovery, preclinical development and clinical trials, the study also took into account the expected rate of return on each investment. Drug companies routinely conduct such analyses to determine which potential drug candidates offer the greatest potential for financial return.

The study looked only at those products requiring FDA approval. Products regulated by the agency's Center for Biologistics Evaluation and research, which has jurisdiction over products created by biotechnology companies, were excluded.

The study underscored the increasingly competitive climate of the pharmaceutical marketplace, which is dominated by large companies such as Pfizer, which has a large research facility in New London County.

"The single largest challenge facing drug developers - both pharmaceutical and biotechnology companies - is to contain R&D costs and reduce development times without compromising clinical test design," said Kenneth I Kaitin, director of the Tufts Center. "It's a tall order".