Your SlideShare is downloading. ×
The Past, Present and Future Structure of the North American ...
Upcoming SlideShare
Loading in...5
×

Thanks for flagging this SlideShare!

Oops! An error has occurred.

×

Introducing the official SlideShare app

Stunning, full-screen experience for iPhone and Android

Text the download link to your phone

Standard text messaging rates apply

The Past, Present and Future Structure of the North American ...

1,099
views

Published on


0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
1,099
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
13
Comments
0
Likes
0
Embeds 0
No embeds

Report content
Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
No notes for slide
  • 4 th millennium B.C. : the oldest preserved remains of cultivated seeds and pods of Papaver somniferum (Opium) have been discovered from this period in Neolithic, pile-dwelling villages in Switzerland . (Opium predates alcohol, which requires fermentation.) Over 25 different alkaloids can be isolated from Papaver somniferum, including: Morphine, Codeine, Narceine, Narcotine, Thebaine, and Papaverine. (NOTE: the earliest forms of writing predate 1) Cuneiform , and 2) Hieroglyphics (e.g., Hattic, Hurrian, Elamite) ; all were relatively simple languages, having only a few hundred word signs at the height of their development. Nevertheless, surviving tablets written in a pre-cuneiform script from about 3500 B.C. contain descriptions of ancient medicines.) The largest producer of Opium today is India, 2 nd is Australia. 1700 B.C. - the Edwin Smith papyrus (found in 1862); seems to be a translation of a much older document, dating from perhaps 3000 B.C. 1500 B.C. - the George Ebers papyrus (found in 1873) lists over 700 remedies, many of which included opium or its extracts as ingredients. It includes about one-third of the medicinal plants in use today. 1500 B.C. - the Chinese develop a form of writing with about 50,000 word signs. Here we are given our first, rich descriptions of ancient medicines; e.g., the Ben Cao Kong Mo (may date from 2700 B.C.) and the Pen Tsoa – lists over 360 medicinal plants and their uses. 600 B.C. - first written, “classical form” of the Hindu Vedas describes a large number of plants used for their curative and therapeutic effects. (NOTE: the Aryan invasion of India occurred about 1500 B.C.)
  • Greece 500 B.C. - extracts from Willow to treat pain, gout and other diseases. Opium was commonplace in Greek civilization “rediscovered” by the Romans about 40 A.D. 400 B.C. - Hippocrates takes medicine out of hands of religion (for the time being); compiles Corpus Hippocraticum based on four humours: Black Bile (or “Gall”) - kidneys & spleen; Blood ; Phlegm ; Yellow Bile (or “Choler”) - liver . 330 B.C. - Theophrastus accompanies Alexander-the-Great, vast, new medical knowledge flows into Greece from Persia and India. Classification of over 550 species from the Atlantic to India. “rediscovered” during the Renaissance. Egypt 50 B.C. - Cleopatra (the last of the Ptolemies) holds the largest collection of medicinal botanicals in the world. Alexandrian library, with over 400,000 scrolls, is partially burned by the Romans under Julius Caesar in 47 B.C.; completely destroyed by Muslims in 700 A.D. Rome 200 A.D. - 200 A.D. Claudius Galen founds a system of medicine followed in Europe for the next 1300 years, Methodus medendi , based on 4 qualities and 4 humours, largely herbal. Physicians should assess not only the cause of the illness, but all aspects of the patient.
  • Persia 900 A.D. “ Rhazes ,” Muhammad ibn Zakariya al-Razi. Liber Continens – an encyclopedia of medical practice & treatment, De variolis et morbillis – a treatise on smallpox and measles. 1000 A.D. - “ Avicenna ,” Abu al-Husayn ibn ‘Abdallah ibn Sina. Kitah-ash-shifa (The Book of Healing), al-Quanum fil-Tibb (The Canon of Medicine). 1204 A.D. - 4 th Crusade; Constantinople falls to Doge of Venice . 1477 A.D. - Leonardo Da Vinci is given a studio in the Medici gardens, receives a copy of the great text by Theophrastus on plants; later begins study of anatomy.
  • 1494 - Sack of the Medici palace and gardens; library dispersed. 1500 - “ Paracelsus ,” Philip von Hohenheim breaks with Galen and Parisian school of medicine; e.g., influenza, malaria, measles, smallpox, syphilis, typhus. “ Active principles ; Fight poisons with poisons .” 1516 - Da Vinci moves to France; anatomical drawings cause a sensation among physicians in Paris. 1550 - Regency of Catherine de Medici ; garden becomes Jardin du Roi in 1626 (known today as the Jardin des Plants ) . 1639 - Spanish physician, Juan del Vego , introduces cinchona as a treatment for malaria. 1658 - Antimony successfully used as an emetic on Louis XIV . (Ten elements known to the ancients: carbon, sulfur, copper, silver, gold, iron, tin, antimony, mercury, and lead. ) 1717 - Lady Mary Wortley Montagu , wife of the British consul in Constantinople, observes the practice of smallpox inoculation among Turkish peasant women. 1743 - Charles Marie de la Condamine brings curare back from the Amazon. 1763 - Edmund Stone uses Willow bark to successfully treat rheumatic fever. 1785 - William Withering demonstrates that digitalis has a powerful stimulating effect on the heart, reducing the edema common in heart disease. 1793 - Humphry Davy discovers the “euphoriant properties” of nitrous oxide . 1804 - Alexander von Humboldt returns with a sample of guano from Peru. 1806 - Friedrich Wilhelm Sert ü rner isolates pure morphine (the 1 st alkaloid) from opium. 1818 - Michael Faraday discovers ether . 1828 - Friedrich W ö hler synthesizes urea , an organic compound found in urine, from two substances considered minerals, ammonium chloride and silver cyanate , evaporation of ammonium cyanate , discrediting the doctrine of “ vital force .” 1831 - Justus von Liebig synthesizes chloroform from acetone & chlorine ; first used as an anesthetic (hypnotic) in 1847 by James Simpson . 1853 - Hermann Kolbe synthesizes salicylic acid from phenol .
  • 1763 - Edmund Stone uses Willow bark to successfully treat rheumatic fever. 1785 - William Withering demonstrates that digitalis has a powerful stimulating effect on the heart, reducing the edema common in heart disease. 1793 - Humphry Davy discovers the “euphoriant properties” of nitrous oxide . 1804 - Alexander von Humboldt returns with a sample of guano from Peru. 1806 - Friedrich Wilhelm Sert ü rner isolates pure morphine (the 1 st alkaloid) from opium. 1818 - Michael Faraday discovers ether . 1828 - Friedrich W ö hler synthesizes urea , an organic compound found in urine, from two substances considered minerals, ammonium chloride and silver cyanate , evaporation of ammonium cyanate , discrediting the doctrine of “ vital force .” 1831 - Justus von Liebig synthesizes chloroform from acetone & chlorine ; first used as an anesthetic (hypnotic) in 1847 by James Simpson . 1853 - Hermann Kolbe synthesizes salicylic acid from phenol .
  • Transcript

    • 1. The Past, Present and Future Structure of the North American and Global Pharmaceutical Industry and its Impact on Planning Functions
    • 2. Overview
      • Some definitions
      • Brief history to 1850
      • Origins of pharma companies
      • Changing orientations
        • Impact of innovation
        • Social, cultural & political change
      • Development of organic chemistry & synthetic pharmaceuticals
      • Impact of 2 World Wars
      • Manufacturing nuts & bolts
      • 5 generations of pharma innovation
      • Industry structure c.1980
      • “ Linear development”
      • Recent M&A activity
      • Present situation
      • Future
        • Pharmaceutical evolution
        • Types of innovation
        • Chemical genetics
    • 3. Definition of Structure
      • The conventional concept of industry structure relates to:
        • the pattern of ownership ( who owns what ),
        • intensity of competition ( how many competitors there are )
        • and the economic power ( ability to dictate price ) of industry participants ( firms or companies ). 
      • According to neo-classical economic theory , the more competitors there are within an industry, the lower is their individual ability to control price.
    • 4. Economic Divisions, Industrial Sectors, Industries, and Industry Subsectors:
      • Economic Divisions , examples:
        • Agriculture; Minerals; Manufacturing ; Wholesale trade; Retail trade; Services; etc.
      • Industrial Sectors : Manufacturing examples :
        • Food products; Chemicals and allied products ; Fabricated metal products; etc.
      • Industries , Chemicals and allied products examples :
        • Industrial inorganic chemicals; Plastics and synthetic resins; Drugs ; Soaps and detergents; etc.
      • Industry Subsectors , Drugs examples :
        • Medicinal chemicals and botanical products; Pharmaceutical preparations ; In vivo and in vitro diagnostic substances; Biological products, except diagnostics.
    • 5. The Chemical Process and Pharmaceutical Industries
      • Bulk or Commodity Chemicals :
        • Sold on a price-per-weight basis.
      • Specialty Chemicals :
        • Sold based upon performance-in-use characteristics.
      • Fine Chemicals :
        • Sold as precise chemical structures of very high purity.
      • Pharmaceutical Products :
        • 10 Categories (see next 2 slides).
    • 6. Categories of Pharmaceutical Products - 1
        • 1) Ethical pharmaceuticals : “legend pharmaceuticals,” patented, brand name, prescription drugs:
          • Lipitor, Prevacid, Risperdal, etc.
        • 2) Generic pharmaceuticals : non-patented, prescription drugs, with “bioequivalence” to the legend pharmaceuticals:
          • Atenolol, Alprazolam, Metoprolol, etc.
        • 3) Biologics & Biological Products :
          • Vaccines, serums, toxoids, etc.
        • 4) Over-the-Counter Medications and Remedies :
          • Bayer Aspirin, Lanacaine, Zantac 75, etc.
    • 7. Categories of Pharmaceutical Products - 2
        • 5) Homeopathic Medicines (minute quantities):
          • Belladonna, Gelsemium, Nux Vomica, etc.
        • 6) Vitamins & Minerals ;
        • 7) Medicinal Botanicals & Herbal Medicines :
          • Black Cohosh, Echinacea, Ginseng, etc.
        • 8) Botanical Extracts & Phytochemicals :
          • p-Courmaric Acid, Chlorogenic Acid, Sulforaphane, etc.
        • 9) Dietary Supplements :
          • Chondroitin Sulfate, Creatine, Shark Cartilage, etc.
        • 10) Nutraceuticals .
    • 8. Ancient Period Oldest cultivated opium Sumer Edwin Smith papyrus George Ebers papyrus 4000 BC_ 3400 BC_ 3000 BC_ 1700 BC_ 600 BC_ Ben Cao Kong Mo Hindu Vedas – “classical” Pen Tsoa
    • 9. Classical Period Cleopatra Hippocrates Theophrastus 50 BC_ 400 BC_ 500 BC_ 300 BC_ 200 AD_ Claudius Galen
    • 10. Medieval Period Da Vinci in Medici gardens “Rhazes” “Avicenna” 4 th Crusade 1300 AD_ 1400 AD_ 1000 AD_ 900 AD_ 1100 AD_ 1200 AD_ 1500 AD_
    • 11. Age of Discovery - 1 Sack of Medici palace 1650_ 1700_ 1500_ 1450_ 1550_ 1600_ 1750_ “Paracelsus” Da Vinci moves to France Regency of Catherine de Medici Juan del Vego Antimony as emetic (Louis XIV) Lady Mary Wortley Montagu Charles Marie de la Condamine
    • 12. The Proposition of the Usual Dose Paracelsus (1493-1541) “ The dose makes the poison”
    • 13. Age of Discovery - 2 1825_ 1800_ 1775_ 1850_
        • Humphrey Davy
      Justus von Liebig Friedrich W ö hler
        • Michael Faraday
        • Alexander von Humboldt
      William Withering
        • Hermann Kolbe
        • Friedrich Wilhelm Sert ü rner
    • 14. The changed context of drug discovery and development
      • The 1800s: natural sources; limited possibilities; prepared by individuals; small scale; not purified, standardized or tested; limited administration; no controls; no idea of mechanisms.
      • The 1990s: synthetic source; unlimited possibilities; prepared by companies; massive scale; highly purified, standardized and tested; world-wide administration; tight legislative control; mechanisms partly understood.
    • 15. Sources of drugs Animal insulin (pig, cow) growth hormone (man) (Creutzfeldt-Jakob) Plant digitalis (digitalis purpurea - foxglove) morphine (papaver somniferum) Inorganic arsenic mercury lithium Synthetic chemical (propranolol) biological (penicillin) biotechnology (human insulin)
    • 16. Origin of Pharmaceutical Companies – 1
      • Important corporate entities emerged gradually in Germany , primarily during the late 19 th century -- following Perkin’s discovery -- with companies like:
        • 1) Leopold Cassella & Cie -- founded in Mainkur in 1807 .
        • 2) Boehringer Ingelheim -- Stuttgart in 1817 , Mannheim in 1872 .
        • 3) Badische Anilin und Soda Fabrik ( BASF ) – Mannheim, association during 1861 between Friedrich Engelhorn and the Clemm brothers.
        • 4) Farbenwerke Hoechst -- joint venture by Eugen Lucius, Wilhelm Meister and Adolf Bruning near Frankfurt in 1862, reorganized as a joint-stock company in 1880 .
        • 5) Farben Fabrik vormals Friedrich Bayer -- Friedrich Bayer in Leverkusen in 1863 , reorganized as a joint-stock company in 1881 .
        • 6) Kalle & Co. -- established by Paul W. Kalle in 1864 in Biebrich.
        • 7) Aktien Gesellschaft für Anilin Fabrikation ( AGFA ), established by Carl Martius and Paul Bartholdy, Rummelsberg (near Berlin) in 1873 .
    • 17. Origin of Pharmaceutical Companies – 2
      • Early companies in Switzerland :
        • CIBA ( Gesellschaft für Chemische Industrie Basel ) -- founded in 1860 by Alexandre Clavel, reorganized as CIBA in 1884 , following his death.
        • Geigy -- founded by J.J. Müller in 1860 while trading in imports on behalf of the Geigy family; Johann Rudolf Geigy took over the business in 1862 .
        • Sandoz AG -- founded in 1886 by Edouard Sandoz and chemist, Alfred Kern, after Sandoz had worked for Durand & Huguenin .
        • F. Hoffman La Roche -- founded in 1894 by Fritz Hoffman, husband of Adèle La Roche.
    • 18. Origin of Pharmaceutical Companies – 3
      • Early U.S. Companies (The 1 st Wave):
        • 1824 - William S. Merrell & Co. , Cincinnati, Ohio., purveyor of medicinal botanicals and their extracts; became notorious as the manufacturer of Thalidomide in 1950s-1960s.
        • 1830 - Philadelphia pharmacy that became Smith, Kline & Co. in 1875 and Smith, Kline and French (SKF) in 1891 . Manufactured extracts, elixirs, syrups, tablets and pills. Supplied U.S. troops with quinine during the Mexican-American War (1846-1848) and the Union army during the American Civil War (1861-1865).
        • 1836 - Powers and Weightman Company began as Philadelphia manufacturing apothecary; 1905 merged with Rosengarten & Co.; 1927 merged with Merck & Co. 1849 - Charles Pfizer & Co. founded in Brooklyn, NY, to produce a flavored candy form of the drug santonin , an anthelmintic Wormseed plant extract. Supplied the Union army with large quantities of borax , camphor , chloroform , cream of tartar , iodine , morphine , tartaric acid , and mercurial compounds .
        • 1857 - E.R. Squibb & Co. founded in Brooklyn, NY, to produce ether and chloroform in more consistent form than currently available. Contracted to supply the Union army with sturdy medicine chests, suitable for field use, each containing 52 standardized medicines in unbreakable tins, for $100.00 each.
        • 1860 - John Wyeth & Brother , Philadelphia pharmacy that established a mail-order catalog for pharmaceutical products in 1862 ; became the Wyeth-Ayerst division of American Home Products in 1931 .
    • 19. Origin of Pharmaceutical Companies – 4
      • Early U.S. Companies (The 2nd Wave):
        • 1866 - Parke-Davis , Detroit, Michigan . Together with H.K. Mulford was 1 st American company to produce diphtheria antitoxin . In 1902 was 1 st American pharmaceutical company to build its own research laboratory; also 1902 , 1 st company ever to manufacture epinephrine (Adrenalin) -- by extraction from adrenal glands. In 1928 production of 2 pituitary hormones, vasopressin & oxytocin -- also by extraction.
        • 1876 - Eli Lilly , Indianapolis, Indiana
        • 1885 - Upjohn , Kalamazoo, Michigan
        • 1888 - Abbott Laboratories , Chicago, Illinois
        • 1888 - G.D. Searle , Chicago, Illinois
    • 20. Pierre Pelletier and Joseph Caventou established the first modern pharmaceutical company to produce pure quinine from imported cinchona bark in 1826 .
    • 21. The “Orienting Effect” of Innovations
      • Occurs mainly because the scientific and medical principles, or mechanisms of action, are not well understood at the time of introduction.
      • Leads to:
        • Drive to discover missing pieces of knowledge.
        • Imitation and incremental innovation by competitors.
        • Increase in knowledge and diffusion of technology.
        • Exhaustion of technological potential & commercial opportunity.
    • 22. New orientations (scientific, political, social, cultural) can lead to dramatic changes in industry structure (the de facto ability to control price).
    • 23. The Birth of Organic Chemistry – 1856 Mauveine William Henry Perkin
    • 24. Mendeleyev Periodic Table – 1866 Mendeleyev, Dmitry
    • 25. Dyes and Drugs – the fundamental relationship. (Blessings of the by-product coke oven)
      • In the beginning, reds came from the female cochineal , kermes insects , brazil wood , and the madder plant ( of southern France ); blues came from woad and the indigo plant ( of northern India ); and quinine came from cinchona .
      Quinine Alizarin Indigo Aniline Naphthalene Anthracene Murexide Picric Acid Manchester Brown
    • 26. Aniline Companies Following Perkin’s Discovery Company Country Date K.G.R. Oehler (Griesheim Elektron) Germany 1856 Perkin & Sons Britain 1857 Renard Frères (Societe la Fuchsine/1864) France 1858 Read Holliday Britain 1858 Girard et Georges de Laire France 1860 Alexandre Clavel (Gesellschaft für Chemische Industrie Basel – CIBA/1884) Switzerland 1860 J.J. Müller (Geigy/1862) Switzerland 1860 J. Poirrier (S.A. des Matières Colorantes et Produits Chimiques de St. Denis/1881) France 1861 Badische Anilin und Soda Fabrik (BASF) Germany 1861 Meister Lucius & Bruning (Farbwerke Hoechst) Germany 1862 Durand & Huguenin Switzerland 1862 Friedrich Bayer (Farben Fabrik vormals Friedrich Bayer) Germany 1863 Kalle & Co. Germany 1864 Leopold Cassella & Cie. Germany 1867 Aktien Gesellschaft für Anilin Fabrikation (AGFA) Germany 1867 Schoellkoph Aniline & Chemical Co. USA 1879 Sandoz AG Switzerland 1886 Benzol Products USA 1910 DuPont USA 1916 Calco USA 1916 Dow USA 1916 National Aniline and Chemical Company USA 1917
    • 27. Bayer and Hoechst created the modern pharmaceutical industry beginning in the 1880s .
    • 28. Development of Synthetic Pharmaceuticals – 1
      • 1884 - Antipyrin (phenazone) , antipyretic , Ludwig Knorr, Hoechst .
      • 1886 - Antifebrin (acetanilide) , antipyretic , Cahn and Hepp, Kalle .
      • 1888 - Phenacetin , analgesic/antipyretic , Bayer .
      • 1893 - Pyramidon (aminopyrine) , analgesic/antipyretic , F. Stolz, Hoechst .
      • 1898 - Aspirin (acetylsalicylic acid) , analgesic/antipyretic , Bayer .
      • 1902 - Diphtheria antitoxin , Emil von Behring, Hoechst .
      • 1904 - Veronal (barbital) , hypnotic/sedative , Bayer/Merck.
      • 1905 - Novocaine , anesthetic , Alfred Einhorn, Hoechst .
      • 1909 - Salvarsan , anti-syphilitic , Paul Ehrlich, Hoechst .
      • 1922 - Insulin , hormone/diabetes (pancreatic extract) , Hoechst .
      • 1928 - Progynon (estradiol) , hormone/estrogen , Schering
      • 1935 - Prontosil (sulfanilamide) , antibacterial , Gerhard Domagk, Bayer .
    • 29. Development of Synthetic Pharmaceuticals – 2
      • 1938 - Sulfapyridine , antibacterial , May and Baker (Acquired by Les Etablissements Poulenc in late 1920s) .
      • 1938 - Sulfathiazol , antibacterial , May and Baker .
      • 1939 - Dolantine , analgesic 4X as effective as Pyramidon , Hoechst .
      • 1941 - Chloroquine , antimalarial , Winthrop, German Patent 683692 (1939) .
      • 1942 - Sulfamethazine , antibacterial , ICI .
      • 1942 - Penicillin (C) , antibacterial , A. Fleming, Merck , Pfizer , Squibb , etc .
      • 1946 - Paludrine (chlorguanide) , antimalarial , ICI
      • 1948 - Streptomycin , antibacterial/tuberculostatic , Merck .
      • 1954 - Hibitane , antibacterial , ICI .
      • 1956 - Norethindrone (progesterone) , precursor of oral contraceptives , Syntex (Mexico).
      • 1957 - Fluothane , anesthetic , ICI .
      • 1959 - Tolbutamide , antidiabetic , Hoechst .
      • 1961 - Ampicillin , antibacterial (semi-synthetic penicillin) , Beecham (GB).
      • 1962 - Tolazamide , antidiabetic , Upjohn .
      • 1964 - Inderal (propranolol) , antihypertensive , ICI .
    • 30. Million Mark Synthetics
      • From 1884 – 1899 Antipyrin was the largest selling drug in the world. Hoechst was producing 14,000 kg/yr (15.4 tons/yr) in 1900.
      • Pyramidon (aminopyrine), produced by Hoechst in 1896, is 3 times more powerful than Antipyrin.
      • Novocain (procaine), produced by Hoechst in 1903, was the top selling local anesthetic worldwide for the next 50 years.
    • 31. Until World War I the most innovative companies were all in Germany, with few notable exceptions: Burroughs Wellcome , Roche , CIBA , Parke-Davis
    • 32. 1 - On the Eve of the World War I
      • Status of U.S. companies in 1914: Still largely centered on natural products and imports, primarily from Germany.
        • At the time of WWI, the U.S. and China were the world’s largest consumers of synthetic dyestuffs. However, out of a total worldwide production of 160,000 tons, the U.S. produced only 3,000 tons. ( Germany produced over 140,000 tons)
    • 33. 2 - On the Eve of the World War I
      • Status of British companies in 1914: By losing their dominance in synthetic dyestuffs to Germany, the British had put their entire chemical industry in jeopardy.
        • The three leading British dyestuffs firms: Ivan Levinstein , Read Holliday , and British Alizarine, all together produced only 4,000 tons of dyestuffs, whereas Germany produced 140,000 tons.
    • 34. Aftermath of World War I Quote taken from The Manchester Guardian – During the darkest days of WWI
      • … henceforth “dyes and drugs must be thought of together. Whatever serves the modern dyemaker directly serves national health.”
    • 35. Impact of Early U.S. Federal Legislation
      • Forced companies to merge (eventually) in order to attain the size and financial strength to improve their scientific capabilities:
        • 1902 Licensing Act – required manufacturers of vaccines, serums, & toxins to be licensed by the Secretary of Treasury through Laboratory of Hygiene.
        • 1906 Pure Food and Drug Act – regulated labeling & marketing claims about efficacy.
      • Permitted U.S. companies to manufacture German patented drugs:
        • 1917 Trading with the Enemy Act .
    • 36. The Formation of Interessen Gemeinschaft Farbenindustrie Aktiengesellschaft (I.G.Farben) Carl Duisberg – Bayer Carl Bosch – BASF Chairman of the Aufsichtsrat , 1925-35 Chairman of the Vorstand , 1925-1935 Chairman of the Aufsichtsrat , 1935-1940
    • 37. I.G.Farben A series of sequentially more powerful trusts
      • 1904 – the Dreiverband – the very profitable Hoechst and its two satellites.
        • Hoechst
        • Cassella (acquired by Hoechst in 1909)
        • Kalle (acquired by Hoechst in 1908)
      • 1906 – the Dreibund – A counter-measure to Hoechst’s growing power.
        • BASF
        • Bayer
        • AGFA
      • 1916 – the “ Little I.G. ” – (Interessengemeinschaft der deutschen Teerfarbenfabriken)
        • Dreibund + Dreiverband + the “Two Independents”
          • Chemische Fabrik vormals Weiler-terMeer , and
          • Chemische Fabrik Griesheim Elektron)
      • 1925 – Final integration of I.G. Farben
        • Cassella and Kalle remained almost wholly owned subsidiaries, legally distinct but administered as part of the new corporation.
    • 38. Other German Alliances
      • Some companies remained independent of I.G. Farben by:
        • Forming an Interessengemeinschaft (shared interests association) of their own:
          • Merck Darmstadt
          • Böhringer & Söhne
          • Knoll
        • Others (examples):
          • Degussa ( Deutsch Geld und Silber Scheide Anstadt ) - formed an association with Henkel (in 1926 ).
          • Schering - merged with Kahlbaum (in 1927 ).
          • J.D. Riedel (Riedel de Haen AG) – became a subsidiary of Cassella after WWII ( 1955 ).
          • Rutgerswerke - founded in 1848 , an innovative leader in tar derivatives.
    • 39. The Evolution of Imperial Chemical Industries
      • Following World War I, Read Holliday , Bradford Dyers , and Calico Printers merged to form British Dyes, Ltd.
      • 1919 – British Dyes, Ltd. merged with Ivan Levinstein and several smaller British Dyestuffs companies to form the British Dyestuff Corporation , in which the British Government took a stake until 1925 .
      • 1926 – British Dyestuffs Corporation merged with Brunner, Mond & Co. , Nobel Industries, Ltd. , United Alkalai Co. , and the British Alizarin Company to form Imperial Chemical Industries .
      • Still, they were no match for I.G. Farben!
    • 40. Aftermath of World War II I.G. Farben BASF (Ludwigshafen) BASF (Leuna, etc.) Bayer Hoechst USSR France UK USA “In the interests of peace and democracy.”
    • 41. The Time for Structural Change
      • Perceptions of the short- and medium-term outlook for an industry can change almost overnight, but structural change to diversify feedstocks and supply lines of intermediates can take years, if not decades to accomplish.
    • 42. Sources of Pharmaceuticals
      • 1. Plants and plant extracts
      • 2. Animal extracts
      • 3. Minerals
      • 4. Chemical Synthesis
      • 5. Fermentation
      • 6. Biotechnology
    • 43. The Seven (7) Basic Organics
      • 1. Benzene
      • 2. Butylene
      • 3. Ethylene
      • 4. Methane
      • 5. Propylene
      • 6. Toluene
      • 7. Xylene
    • 44. Hydrocarbon Feedstocks and Organic Raw Materials
    • 45. Feedstock Processing to Basic Organics
    • 46. “ Trunk” of the Chemical Tree
    • 47. Pharmaceuticals from Fermentation
      • Statins
        • Lipitor , etc.
      • Antibiotics
        • Penicillins
        • Cephalosporins
        • Tetracyclines
        • Macrolides
    • 48. 4 B asic B uilding B locks of B iosynthesis
      • 1. Acetyl coenzyme A
        • Major role in the synthesis of phenols, prostaglandins, macrolide antibiotics, and various fatty acids and their derivatives.
      • 2. Deoxyxylulose phosphate
        • Together with mevalonic acid is responsible for a vast array of terpenoids and other steroids.
      • 3. Mevalonic acid
        • Major precursor of cholesterol and other sterols.
      • 4. Shikimic acid
        • Major precursor of phenylalanine, tyrosine, and tryptophan and, hence, the majority of plant alkaloids. Also involved in the biosynthesis of lignin, flavonoids, and other aromatics.
    • 49. Five “Generations” of Drug Development
      • 1. Discovery of “active principles” in natural products, fermentations, and simple coal-tar derivatives: analgesics, antipyretics, anesthetics, hypnotics, sedatives (1820 - 1880).
      • 2. Experimental therapeutics and chemotherapy. Use of synthetic organic dyes to identify pathogenic microorganisms and to manufacture antiprotozoal medicines, serums, toxins, and vaccines (1880 - 1930).
      • 3. Introduction of sulfa drugs, antibiotics, antihistamines, vitamins, corticosteroids, and sex hormones (1930 - 1960).
      • 4. Drugs to treat hypertension and other cardiovascular diseases; antianxiety drugs, antidepressants, other CNS; oral contraceptives; semisynthetic penicillins, cephalosporins; and NSAIDS (1960 - 1980).
      • 5. Bio-engineered proteins, antineoplastics, antivirals; new drug delivery systems, and diagnostic tests based on recombinant DNA and monoclonal antibodies (1980 - ?).
    • 50. Evolution of Abbott Laboratories
    • 51. Evolution of GlaxoSmithKline
    • 52. Evolution of Wyeth
    • 53. Mergers & Acquisitions - 1 1996 1996 CIBA Geigy 1996 Hoechst Clariant CIBA Specialties 1996 2000 Astra AB Zeneca 1999 ICI 1993 Sandoz Novartis Crop Protection Merck 1997 Syngenta AstraZeneca
    • 54. Mergers & Acquisitions - 2 1997 2002 1999 1997 1999 2000 1995 1996 1994 1997 Lilly Union Carbide Collaborative BioAlliance Marion Merrell Hoechst Roussel Uclaf Sandoz Clariant Rorer 1990 1995 Fisons Rh ô ne-Poulenc Rhodia Celanese Aventis Aventis CropScience Bayer Dow Elanco Rohm & Haas Ag Mycogen
    • 55. Mergers & Acquisitions - 3 Squibb Bristol-Myers 1982 Glaxo Glaxo Wellcome SmithKline & French Allergen Beckman Instruments Beecham Group 1989 2000 1989 Clairol DuPont Pharmaceuticals DuPont Proctor & Gamble 2001 1995 SmithKline Beckman Bristol-Myers Squibb Burroughs Wellcome SmithKline Beecham GlaxoSmithKline
    • 56. Mergers & Acquisitions - 4 2000 2003 1999 1970 Animal Health 1995 Medical Technologies 1998 Adams 2003 2000 Solutia 1997 Specialty Chemicals 1995 Pfizer Pharmacia Warner-Lambert Agouron Parke-Davis SmithKline Beecham Upjohn Pharmacia A.B. Pharmacia & Upjohn 1995 Monsanto Agracetus Dekalb Genetics Calgene 1997 Merck
    • 57. Industry Concentration 1996-2000
    • 58. The Present What do we think we know? And why do we think we know it?
    • 59. Worldwide approximately 5 million people die each year from just 3 infectious diseases:
      • Tuberculosis
      • Malaria
      • HIV/AIDS
    • 60. Worldwide Sales of Leading Therapeutic Classes (in BILLIONS of $USD) and Percent Growth (in local currency)
    • 61. Pharmaceutical Sales in 13 Key Markets Retail Pharmacy Sales (plus hospital sales in Japan only); Sept. to Sept.; in MILLIONS of (current; i.e., variable exchange rate) $US Dollars and Percent Change from Previous Year (at a constant exchange rate; i.e., in local currency).
    • 62. Companies Ranked by Pharmaceutical Sales (Ethicals + OTC); also shows Total Sales -1
    • 63. Companies Ranked by Pharmaceutical Sales (Ethicals + OTC); also shows Total Sales - 2
    • 64. Companies Ranked by Pharmaceutical Sales (Ethicals + OTC); also shows Total Sales - 3
    • 65. The Future Assumptions, Paradigms, and Prospects
    • 66. Three Major Questions of Strategic Importance
      • 1. In what direction is the pharmaceutical industry heading globally?
      • 2. What are the key determining factors that will affect the future structure?
      • 3. What impact will the future structure have on planning needs and functions?
    • 67. In what direction is the pharmaceutical industry heading globally?
      • The industry is simultaneously pursuing three macro -objectives:
          • A) Increased specialization;
            • A function of the complex and highly technical nature of virtually all aspects of the discovery, development, manufacturing and marketing of pharmaceutical products.
          • B) Global consolidation;
            • A function of economies of scale, eliminating redundancies, reducing costs, streamlining operations, garnering larger shares of emerging markets, and monopolizing intellectual property.
          • C) Bio-integration;
            • A function of the growing potential for natural and/or engineered biological systems (e.g., botanical, microbial, mammalian cell cultures, etc.) to produce economic (large-scale, low-cost) quantities of active pharmaceutical ingredients or their intermediates, particularly (though not exclusively) those involving novel targets and/or peculiar disease states.
    • 68. What are the key determining factors that will affect the future structure?
        • The key determining factors will include:
          • A) managed care, formularies, and the worldwide trend toward socialized medicine;
          • B) the growth of generics;
          • C) D-T-C advertising and more, better brand management and marketing;
          • D) the availability of capital;
          • E) better drug delivery;
    • 69. What are the key determining factors that will affect the future structure? (continued)
        • The key determining factors will (also) include:
          • F) biotechnology;
          • G) economic geography;
          • H) improved chemical engineering, industrial processes, and better yields;
          • I) new forms of leadership, and superior managerial ability;
          • J) patent and tax reform, other legal inducements or obstacles, and moral impediments.
    • 70. What impact will the future structure have on planning needs and functions?
        • The impact on planning needs and functions will be largely four-fold:
          • A) a need for better methods of monitoring, analyzing, and interpreting emergent and potential new innovations;
          • B) a need for increased quality of communication with and paradigm sharing among firms and operating units that represent various areas of specialization within the organization or channel of distribution;
          • C) a need for generalists with broad backgrounds and experiences to understand and manage the growing herds of “cat-like” specialization and entrepreneurship that will continue to characterize the industry;
          • D) a need for better methods of conceptualizing and operationalizing the consolidation and integration of discovery, development, manufacturing, and marketing processes in order to minimize price.
    • 71. Patent Expirations – Pre-2002-2004 Global Sales 2000-2001 (in MILLIONS of $USD) Year Brand Sales Manufacturer Therapeutic Class
    • 72. Patent Expirations – 2005-2007 Global Sales 2000-2001 (in MILLIONS of $USD) Year Brand Sales Manufacturer Therapeutic Class
    • 73. Evolution of Pharmaceutical Science 1900 1950 1960 1970 1980 1990 2000 2010 2020 2030 Aspirin , Sulfa drugs , Penicillins Psychotropics NSAIDS H2-antagonists , Beta blockers Lipid lowerers , ACE inhibitors Biotech drugs Chronic Degenerative Disease , Cancer , Inflammation Natural products & derivatives Serendipity Receptors Enzymes Genetic engineering Cell pharmacology, Molecular biology
    • 74. Two Types of Radical Innovations - 1
      • 1. Those that result in new industries or new subsectors of an existing industry:
        • Smallpox vaccine (1796);
        • Morphine, 1 st alkaloid (1806);
        • Carbolic acid (phenol), 1 st antiseptic (1860);
        • Phenazone (Antipyrin), 1 st synthetic drug (1884);
        • Arsphenamine (Salvarsan), 1 st chemotherapeutic agent (1911);
        • Sulfamidochrysoidine (Prontosil), 1 st antibacterial (1935);
        • Penicillin, 1 st antibiotic (1942);
        • Process for recombinant DNA, beginning of biotechnology (1975).
    • 75. Two Types of Radical Innovations - 2
      • 2. Those that widen the scope and markets of existing sectors or subsectors by applying new scientific principles, technology, or materials to displace existing products or processes; and serve as models for further innovation by imitation:
        • Barbital (Veronal), 1 st barbiturate hypnotic (1903) – 32 imitations;
        • Chlorothiazide (Diuril), 1 st antihypertensive diuretic (1958) – 15 i’s;
        • Chlordiazepoxide (Librium), 1 st benzodiazepine anxiolytic (1960) – 37 i’s;
        • Propranolol (Inderal), 1 st antihypertensive ß-blocker (1964) – 24 i’s;
        • Cimetidine (Tagamet), 1 st treatment for peptic ulcers (1977) – 7 i’s.
    • 76. Incremental Innovation
      • The preeminent vehicle for diffusing innovation among competing companies.
      • Can be big money makers.
      • Designed on models of existing products or processes with only modest differences in science, technology, materials, etc.; and do not provide scope for further innovation by imitation.
        • Trifluoperazine (Stelazine), tranquilizer (1959);
        • Cefaclor (Ceclor), antibacterial (1979);
        • Enalapril (Vasotec), ACE inhibitor (1985);
        • Ranitidine (Zantac), antiulcer (1982);
        • Atorvastatin (Lipitor) cholesterol reducer (1997).
    • 77. Chemical Genetics
      • The systematic use of small molecules to explore biology.
      • Transition from ad hoc or “targeted” organic synthesis.
      • Biological space – region of multidimensional, biological descriptor space, e.g., specific diseases (cancer, diabetes) or areas of biology having common characteristics, e.g., cell-cycle check points.
      • Chemical space – region of multidimensional, chemical descriptor space, “analogs;” i.e., molecules having similar overall properties (volume, charge, number of bonds with low barriers to rotation, etc.)