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Pharmaceutical Companies

There are many types of companies and institutions in the pharmaceutical world with responsibilities regarding drug safety. A summary of various types of institutions follows.

There are many large drug companies in the world that sell billions of dollars of product each year. Although the number has decreased through mergers and acquisitions, there still remain more than 50 publicly traded companies with annual sales of more than $1.5 billion per year and roughly another 400 with sales less than $1 billion per year. The largest public company has sales of more than $60 billion per year (Fortune magazine, Morningstar). In addition, there are several very large and many other small and midsized companies that are privately held (not traded on the stock exchange). As noted throughout this book, companies are obligated to report animal and human safety data (among other information) to health authorities, ethics committees, investigational review boards, and so on.

Big pharma generally refers to the dozen or so large, “full-service” companies with revenues in the billions of dollars. These companies are multinational, with headquarters in the United States or Europe primarily but with some located in Japan and elsewhere (India or Israel). They usually have scientists doing drug discovery in an attempt to come up with new patentable drugs that will, it is hoped, become “blockbusters” (drugs with sales of more than a billion dollars a year by some definitions). The companies have the capacity to do their own preclinical studies (pharmacology and toxicity) and clinical trials (phases I–IV). Many now also have generic divisions that develop and market generics, both of their own branded products and of other companies’ products that are off patent. They have large marketing and sales divisions with hundreds to thousands of “representatives,” “sales reps,” or “detailers.” The big pharma company does some of its own manufacturing in factories throughout the world as well as outsources production from other countries, including India and China in particular. There are large departments to handle regulatory issues, legal issues, and patents. Many have subsidiaries in the major markets (50 or more) throughout the world. Some are only sales organizations, whereas others are staffed to do clinical research as well. Some functions may be located outside the mother country (e.g., home office in the United States but a phase I clinical research unit in the United Kingdom or Asia, or vice versa).

Of course, there is a large drug safety department. The safety department is often, but not always, located in the corporate headquarters in the mother country. This is the major center for drug safety, with receipt of some or all of the individual case safety reports for data entry as well as preparation of MedWatch and CIOMS I forms, Common Technical Documents (eCTDs), Marketing Authorizations, PSURs, NDA periodic reports, IND annual reports, European Annual Safety Reports, clinical trial reports, and other aggregate reports.

The servers for the safety database are located at a central location as a rule, with backup servers at a different location. There are usually drug safety departments in most or all subsidiaries to receive local safety reports (in the local language) and make submissions (sometimes in English, sometimes in the local language) if electronic E2B reporting is not done centrally.

These subsidiaries, depending on size and function, may have a separate physician serving as safety officer or have the medical director (often the only medical doctor in the local company) also serve as the safety physician. The subsidiaries often serve as “pass through” points for AEs to be sent to central or regional data centers for data entry into the safety database. Sometimes a subsidiary (or regional center) will have expanded functions covering multiple countries. For example, some companies (e.g., whose headquarters are located in the United States or Japan) will set up a major center in the European Union to do data entry and to prepare PSURs and other documents for submission to the European Medicines Agency and national health authorities. In other situations where the corporate headquarters are located in a smaller country (e.g., Switzerland), one of the “subsidiaries” may become the dominant center for drug safety (e.g., in the European Union or United States). There is a tendency for safety departments to now be located in major English-speaking countries, such as the United States or the United Kingdom, which, coincidentally or not, are the regulatory sites for the two major world pharmaceutical markets (the United States and the European Union).

Things are changing, however, in biggish pharma. The large companies are getting larger, following mergers and acquisitions (e.g., Merck, Pfizer). There is now a trend in the very big companies to have some functions remain centralized for the entire corporation, such as IT and the safety database, but for the drug safety functions to be separate. That is, there may be several relatively independent drug safety groups (one for prescription products, another for OTC, another for vaccines, etc.) doing individual case processing and aggregate reporting but sharing IT, epidemiology, risk management, and certain other common functions. Thus, big companies may function as “holding companies” for multiple smaller subunits. Others remain rigidly monolithic. There is no single model applicable to all.

There are several trends evident. One is that drug discovery has been somewhat slow of late in big pharma, with fewer new blockbusters and many old blockbusters going off patent (“the patent cliff”). Many firms, both large and midsized, are now “rightsizing” or downsizing” (i.e., firing workers and replacing them, if at all, with temporary workers and consultants). Thus, they tend to do less research and more development as “R&D” is now becoming distinct. Research is, to a significant degree, being left to the small biotech companies that do the early development and then sell the product to the bigger pharmas for the late phase II and III development for submission of the New Drug Application (NDA) or Marketing Authorization (MA) dossier.

Another trend is the use of generics in the developed world as well as in developing countries. More than half of the drugs sold in the United States are now generics and this trend will continue as many older drugs go off patent. Europe is following this trend too. Some national and multinational companies are devoted only to generic products and thus have little or no drug discovery or clinical research capacity. They may do small studies to show bioequivalence. Occasionally, they do formal phase II, III, or IV clinical trials but usually outsource them. The generic companies create safety departments according to the functions needed, but they tend to be less involved with critical issues than the companies that deal with new chemical entities. By the time a drug is generic, most of the safety issues have been addressed and AE reporting and pharmacovigilance tends to be a “maintenance function,” with few new data or signals appearing. Many of the safety reports are, in fact, literature cases with few spontaneous AEs received. In addition, because it is often hard to identify the manufacturer of a generic product, the AEs tend to get reported to the originating company that first created and sold the product whether the actual AE occurred with that product or not.

Some big pharma companies have generic divisions in addition to the innovator divisions. This is done to make money selling generics but also to be in the position to manufacture generics to the branded products they sell after these products go off patent. That is, a company may sell a branded and a generic version of the same product.

We are now beginning to see biosimilar products. These are in a sense “generic biologics” but clearly are not. Many biologics are complex proteins that cannot be created, assembled, and “folded” except in living organisms. Regulatory agencies and companies realize these biosimilars cannot be handled like generic drugs of small molecules. The rules are evolving, and it is likely that pharmacovigilance (”biovigilance”) will need to be done at the level of innovator products.

Another trend is the outsourcing and offshoring of many functions that formerly remained entirely within the company. Drug safety falls into this category. The operational aspects of drug safety are usually strong candidates for this. Processing individual case safety reports has now become something of a commodity (“a good or service whose wide availability typically leads to smaller profit margins and diminishes the importance of factors [like brand name] other than price”—Merriam-Webster’s Collegiate Dictionary, Web Resource 38-1), whereby the place and personnel who do the case processing, data entry, and follow-up are chosen almost entirely on the basis of lowest cost. Thus, much of the drug safety work is now being done in India, China, Brazil, the Philippines, and elsewhere. Manufacturing, toxicology, computer programming, and other services are also following this route. The major business, risk–benefit, and epidemiologic and management decisions tend to remain in the home office.

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