Research and Development - IPHA

The discovery, development, testing and gaining of regulatory approval for new medicines is a highly complex, lengthy, risky and expensive process.

Even after a medicine is developed, teams of engineers, biologists, chemists, and physicists spend many thousands of man hours trying to mass-produce the results achieved by an individual scientist in their lab.

The odds are formidable – between 40 to 50% of potential medicine candidates that enter the third and final phase of clinical trials fail to make it to market. Often, promising experiments are not replicable on a large scale. Research may fail because it is not possible to manufacture the medicine safely or to the proper specifications.

The risks involved in developing any new medicine therefore are substantial and very expensive, with the estimated costs of bringing new products to market at €1.4 billion. On average, only one of every 10,000 promising substances will successfully pass testing in the R&D phase to be eventually approved as a marketable product. It takes an average of 12 to 15 years to turn a promising new compound into a marketable medicinal product that is safe and effective enough to bring to patients.

Once on the market, the average medicine has only about 8 to 10 years of effective patent protection left before the patent for the medicine runs out, and other companies start manufacturing the medicine using the same formula.

Even making it to market is still no guarantee of commercial success – around 70% of medicines that eventually reach the market do not provide sufficient return to recoup their R&D expenditure before they lose patent protection. As a consequence, the return on investment is highly dependent on a limited number of successful products.

Committing resources into researching new medicines therefore has really become an act of faith, which requires massive expenditure with no guarantee of return.

Today, the European Pharmaceutical industry employs over 115,000 people in R&D at a total cost of over €27.4 billion. In Ireland, pharmaceutical industry R&D is responsible for 20% of all business R&D.