Goodman and Gilman Manual of Pharmacology and Therapeutics

Section I
General Principles

chapter 1
Drug Invention and the Pharmaceutical Industry

The first edition of Goodman & Gilman helped to organize the field of pharmacology, giving it intellectual validity and an academic identity. That edition began: “The subject of pharmacology is a broad one and embraces the knowledge of the source, physical and chemical properties, compounding, physiological actions, absorption, fate, and excretion, and therapeutic uses of drugs. A drug may be broadly defined as any chemical agent that affects living protoplasm, and few substances would escape inclusion by this definition.” ThisGeneral Principles section provides the underpinnings for these definitions by exploring the processes of drug invention, followed by the basic properties of the interactions between the drug and biological systems: pharmacodynamics, pharmacokinetics (including drug transport and metabolism), and pharmacogenomics. Subsequent sections deal with the use of drugs as therapeutic agents in human subjects.

Use of the term invention to describe the process by which a new drug is identified and brought to medical practice, rather than the more conventional term discovery, is intentional. The term inventionemphasizes the process by which drugs are sculpted and brought into being based on experimentation and optimization of many independent properties; there is little serendipity.


The human fascination—and sometimes infatuation—with chemicals that alter biological function is ancient and results from long experience with and dependence on plants. Many plants produce harmful compounds for defense that animals have learned to avoid and humans to exploit.

Examples are described in earlier editions of this text: the appreciation of coffee (caffeine) by the prior of an Arabian convent who noted the behavior of goats that gamboled and frisked through the night after eating the berries of the coffee plant; the use of mushrooms and the deadly nightshade plant by professional poisoners; of belladonna (“beautiful lady”) to dilate pupils; of the Chinese herb ma huang (containing ephedrine) as a circulatory stimulant; of curare by South American Indians to paralyze and kill animals hunted for food; and of poppy juice (opium) containing morphine (from the Greek Morpheus, the god of dreams) for pain relief and control of dysentery. Morphine, of course, has well-known addicting properties, mimicked in some ways by other problematic (“recreational”) natural products—nicotine, cocaine, and ethanol.

Although terrestrial and marine organisms remain valuable sources of compounds with pharmacological activities, drug invention became more allied with synthetic organic chemistry as that discipline flourished over the past 150 years, beginning in the dye industry. Dyes are colored compounds with selective affinity for biological tissues. Study of these interactions stimulated Paul Ehrlich to postulate the existence of chemical receptors in tissues that interacted with and “fixed” the dyes. Similarly, Ehrlich thought that unique receptors on microorganisms or parasites might react specifically with certain dyes and that such selectivity could spare normal tissue. Ehrlich’s work culminated in the invention of arsphenamine in 1907, which was patented as “salvarsan,” suggestive of the hope that the chemical would be the salvation of humankind. This and other organic arsenicals were invaluable for the chemotherapy of syphilis until the discovery of penicillin. Through the work of Gerhard Domagk, another dye, prontosil (the first clinically useful sulfonamide), was shown to be dramatically effective in treating streptococcal infections, launching the era of antimicrobial chemotherapy. The collaboration of pharmacology with chemistry on the one hand, and with clinical medicine on the other, has been a major contributor to the effective treatment of disease, especially since the middle of the 20th century.



With the exception of a few naturally occurring hormones (e.g., insulin), most drugs were small organic molecules (typically <500 Da) until recombinant DNA technology permitted synthesis of proteins by various organisms (bacteria, yeast) and mammalian cells. The usual approach to invention of a small-molecule drug is to screen a collection of chemicals (“library”) for compounds with the desired features. An alternative is to synthesize and focus on close chemical relatives of a substance known to participate in a biological reaction of interest (e.g., congeners of a specific enzyme substrate chosen to be possible inhibitors of the enzymatic reaction), a particularly important strategy in the discovery of anticancer drugs.

Drug discovery in the past often resulted from serendipitous observations of the effects of plant extracts or individual chemicals on animals or humans; today’s approach relies on high-throughput screening of libraries containing hundreds of thousands or even millions of compounds for their capacity to interact with a specific molecular target or elicit a specific biological response. Ideally, the target molecules are of human origin, obtained by transcription and translation of the cloned human gene. The potential drugs that are identified in the screen (“hits”) are thus known to react with the human protein and not just with its relative (ortholog) obtained from mouse or another species.

Among the variables considered in screening are the “drugability” of the target and the stringency of the screen in terms of the concentrations of compounds that are tested. “Drugability” refers to the ease with which the function of a target can be altered in the desired fashion by a small organic molecule. If the protein target has a well-defined binding site for a small molecule (e.g., a catalytic or allosteric site), chances are excellent that hits will be obtained. If the goal is to employ a small molecule to mimic or disrupt the interaction between 2 proteins, the challenge is much greater.


Initial hits in a screen are rarely marketable drugs, often having modest affinity for the target, and lacking the desired specificity and pharmacological properties. Medicinal chemists synthesize derivatives of the hits, thereby defining the structure–activity relationship and optimizing parameters such as affinity for the target, agonist/antagonist activity, permeability across cell membranes, absorption and distribution in the body, metabolism, and unwanted effects.

This approach was driven largely by instinct and trial and error in the past; modern drug development frequently takes advantage of determination of a high-resolution structure of the putative drug bound to its target. X-ray crystallography offers the most detailed structural information if the target protein can be crystallized with the lead drug bound to it. Using techniques of molecular modeling and computational chemistry, the structure provides the chemist with information about substitutions likely to improve the “fit” of the drug with the target and thus enhance the affinity of the drug for its target. Nuclear magnetic resonance (NMR) studies of the drug-receptor complex also can provide useful information, with the advantage that the complex need not be crystallized.

The holy grail of this approach to drug invention is to achieve success entirely through computation. Imagine a database containing detailed chemical information about millions of chemicals and a second database containing detailed structural information about all human proteins. The computational approach is to “roll” all the chemicals over the protein of interest to find those with high-affinity interactions. The dream gets bolder if we acquire the ability to roll the chemicals that bind to the target of interest over all other human proteins to discard compounds that have unwanted interactions. Finally, we also will want to predict the structural and functional consequences of a drug binding to its target (a huge challenge), as well as all relevant pharmacokinetic properties of the molecules of interest. Indeed, computational approaches have suggested new uses for old drugs and offered explanations for recent failures of drugs in the later stages of clinical development (e.g., torcetrapib; see below).


Protein therapeutics were uncommon before the advent of recombinant DNA technology. Insulin was introduced into clinical medicine for the treatment of diabetes following the experiments of Banting and Best in 1921. Insulins purified from porcine or bovine pancreas are active in humans, although antibodies to the foreign proteins are occasionally problematic. Growth hormone, used to treat pituitary dwarfism, exhibits more stringent species specificity: only the human hormone could be used after purification from pituitary glands harvested during autopsy, and such use had its dangers. Some patients who received the human hormone developed Creutzfeldt-Jakob disease (the human equivalent of mad cow disease), a fatal degenerative neurological disease caused by prion proteins that contaminated the drug preparation. Thanks to gene cloning and the production of large quantities of proteins by expressing the cloned gene in bacteria or eukaryotic cells, protein therapeutics now use highly purified preparations of human (or humanized) proteins. Rare proteins can be produced in quantity, and immunological reactions are minimized. Proteins can be designed, customized, and optimized using genetic engineering techniques. Other types of macromolecules may also be used therapeutically. For example, antisense oligonucleotides are used to block gene transcription or translation, as are small interfering RNAs (siRNAs).

Proteins used therapeutically include hormones, growth factors (e.g., erythropoietin, granulocyte-colony stimulating factor), cytokines, and a number of monoclonal antibodies used in the treatment of cancer and autoimmune diseases. Murine monoclonal antibodies can be “humanized” (by substituting human for mouse amino acid sequences). Alternatively, mice have been engineered by replacement of critical mouse genes with their human equivalents, such that they make completely human antibodies. Protein therapeutics are administered parenterally, and their receptors or targets must be accessible extracellularly.


Early drugs came from observation of the effects of plants after their ingestion by animals, with no knowledge of the drug’s mechanism and site of action. Although this approach is still useful (e.g., in screening for the capacity of natural products to kill microorganisms or malignant cells), modern drug invention usually takes the opposite approach—starting with a statement (or hypothesis) that a certain protein or pathway plays a critical role in the pathogenesis of a certain disease, and that altering the protein’s activity would therefore be effective against that disease. Crucial questions arise:

• Can one find a drug that will have the desired effect against its target?

• Does modulation of the target protein affect the course of disease?

• Does this project make sense economically?

The effort expended to find the desired drug will be determined by the degree of confidence in the answers to the latter 2 questions.


The drugability of a target with a low-molecular-weight organic molecule relies on the presence of a binding site for the drug that exhibits considerable affinity and selectivity.

If the target is an enzyme or a receptor for a small ligand, one is encouraged. If the target is related to another protein that is known to have, for example, a binding site for a regulatory ligand, one is hopeful. However, if the known ligands are large peptides or proteins with an extensive set of contacts with their receptor, the challenge is much greater. If the goal is to disrupt interactions between 2 proteins, it may be necessary to find a “hot spot” that is crucial for the protein-protein interaction, and such a region may not be detected. Accessibility of the drug to its target also is critical. Extracellular targets are intrinsically easier to approach and, in general, only extracellular targets are accessible to macromolecular drugs.


This question is obviously a critical one. A negative answer, frequently obtained only retrospectively, is a common cause of failure in drug invention.

Biological systems frequently contain redundant elements, or can alter expression of drug-regulated elements to compensate for the effect of the drug. In general, the more important the function, the greater the complexity of the system. For example, many mechanisms control feeding and appetite, and drugs to control obesity have been notoriously difficult to find. The discovery of the hormone leptin, which suppresses appetite, was based on mutations in mice that cause loss of either leptin or its receptor; either kind of mutation results in enormous obesity in both mice and people. Leptin thus appeared to be a marvelous opportunity to treat obesity. However, obese individuals have high circulating concentrations of leptin and appear quite insensitive to its action.

Modern techniques of molecular biology offer powerful tools for validation of potential drug targets, to the extent that the biology of model systems resembles human biology. Genes can be inserted, disrupted, and altered in mice. One can thereby create models of disease in animals or mimic the effects of long-term disruption or activation of a given biological process. If, for example, disruption of the gene encoding a specific enzyme or receptor has a beneficial effect in a valid murine model of a human disease, one may believe that the potential drug target has been validated. Mutations in humans also can provide extraordinarily valuable information. For example, loss-of-function mutations in the PCSK9 gene (encoding proprotein convertase subtilisin/kexin type 9) greatly lower concentrations of LDL cholesterol in plasma and reduce the risk of myocardial infarction. Based on these findings, many drug companies are actively seeking inhibitors of PCSK9 function.


Drug invention and development is expensive (see below), and economic realities influence the direction of pharmaceutical research.

For example, investor-owned companies generally cannot afford to develop products for rare diseases or for diseases that are common only in economically underdeveloped parts of the world. Funds to invent drugs targeting rare diseases or diseases primarily affecting developing countries (especially parasitic diseases) usually come from taxpayers or very wealthy philanthropists.


Following the path just described can yield a potential drug molecule that interacts with a validated target and alters its function in the desired fashion. Now one must consider all aspects of the molecule in question—its affinity and selectivity for interaction with the target, its pharmacokinetic properties (absorption, distribution, metabolism, excretion: ADME), issues of its large-scale synthesis or purification, its pharmaceutical properties (stability, solubility, questions of formulation), and its safety. One hopes to correct, to the extent possible, any obvious deficiencies by modification of the molecule itself or by changes in the way the molecule is presented for use.

Before being administered to people, potential drugs are tested for general toxicity by monitoring the activity of various systems in 2 species of animals for extended periods of time. Compounds also are evaluated for carcinogenicity, genotoxicity, and reproductive toxicity. Animals are used for much of this testing. Usually 1 rodent (usually mouse) and 1 nonrodent (often rabbit) species are used. In vitro and ex vivo assays are used when possible, both to spare animals and to minimize cost. If an unwanted effect is observed, an obvious question is whether it is mechanism-based (i.e., caused by interaction of the drug with its intended target) or caused by an off-target effect of the drug, which might be minimized by further optimization of the molecule.

Before the drug candidate can be administered to human subjects in a clinical trial, the sponsor must file an IND (Investigational New Drug) application, a request to the U.S. Food and Drug Administration (FDA; see the next section) for permission to administer the drug to human test subjects. The IND describes the rationale and preliminary evidence for efficacy in experimental systems, as well as pharmacology, toxicology, chemistry, manufacturing, and so forth. It also describes the plan for investigating the drug in human subjects. The FDA has 30 days to review the application, by which time the agency may disapprove the application, ask for more data, or allow initial clinical testing to proceed.



The FDA is a regulatory agency within the U.S. Department of Health and Human Services.

The FDA is responsible for protecting the public health by assuring the safety, efficacy, and security of human and veterinary drugs, biological products, medical devices, our nation’s food supply, cosmetics, and products that emit radiation. The FDA is also responsible for advancing the public health by helping to speed innovations that make medicines and foods more effective, safer, and more affordable; and helping the public get the accurate, science-based information they need to use medicines and foods to improve their health. One of the FDA’s responsibilities is to protect the public from harmful medications. The 1962 Kefauver-Harris Amendments to the Food, Drug, and Cosmetic Act established the requirement for proof of efficacy as well of documentation of relative safety in terms of the risk-to-benefit ratio for the disease entity to be treated (the more serious the disease, the greater the acceptable risk).

The FDA faces an enormous challenge, especially in view of the widely held belief that its mission cannot possibly be accomplished with the available resources. Moreover, harm from drugs that cause unanticipated adverse effects is not the only risk of an imperfect system; harm also occurs when the approval process delays the marketing of a new drug with important beneficial effects.


Clinical trials of drugs are designed to acquire information about the pharmacokinetic and pharmacodynamic properties of a candidate drug in humans. Efficacy must be proven and an adequate margin of safety established for a drug to be approved for sale in the U.S.

The U.S. National Institutes of Health notes 7 ethical requirements that must be met before a clinical trial can begin: social value, scientific validity, fair and objective selection of subjects, informed consent, favorable ratio of risks to benefits, approval and oversight by an independent review board (IRB), and respect for human subjects.

FDA-regulated clinical trials typically are conducted in 4 phases. The first 3 are designed to establish safety and efficacy, while phase IV postmarketing trials delineate additional information regarding new indications, risks, and optimal doses and schedules. Table 1–1 and Figure 1–1 summarize the important features of each phase of clinical trials; note the attrition at each successive stage over a relatively long and costly process. When initial phase III trials are complete, the sponsor (usually a pharmaceutical company) applies to the FDA for approval to market the drug; this application is called either a New Drug Application (NDA) or a Biologics License Application (BLA). These applications contain comprehensive information, including individual case-report forms from the hundreds or thousands of individuals who have received the drug during its phase III testing. Applications are reviewed by teams of specialists, and the FDA may call on the help of panels of external experts in complex cases.

Table 1–1

Typical Characteristics of the Various Phases of the Clinical Trials Required for Marketing of New Drugs



Figure 1–1 The phases, time lines, and attrition that characterize the invention of new drugs. See also Table 1–1.

Under the provisions of the Prescription Drug User Fee Act (PDUFA; enacted initially in 1992 and renewed in 2007), pharmaceutical companies now provide a significant portion of the FDA budget via user fees, a legislative effort to expedite the drug approval review process. PDUFA also broadened the FDA’s drug safety program and increased resources for review of television drug advertising. A 1-year review time is considered standard, and 6 months is the target if the drug candidate is granted priority status because of its importance in filling an unmet need. Unfortunately, these targets are not always met.

Before a drug is approved for marketing, the company and the FDA must agree on the content of the “label” (package insert)—the official prescribing information. This label describes the approved indications for use of the drug and clinical pharmacological information including dosage, adverse reactions, and special warnings and precautions (sometimes posted in a “black box”). Promotional materials used by pharmaceutical companies cannot deviate from information contained in the package insert. Importantly, the physician is not bound by the package insert; a physician in the U.S. maylegally prescribe a drug for any purpose that she or he deems reasonable. However, third-party payers (insurance companies, Medicare, and so on) generally will not reimburse a patient for the cost of a drug used for an “off-label” indication unless the new use is supported by one of several compendia such as the U.S. Pharmacopeia. Furthermore, a physician may be vulnerable to litigation if untoward effects result from an unapproved use of a drug.


Demonstrating efficacy to the FDA requires performing “adequate and well-controlled investigations,” generally interpreted to mean 2 replicate clinical trials that are usually, but not always, randomized, double-blind, and placebo-controlled.

Is a placebo the proper control? The World Medical Association’s Declaration of Helsinki (2000) discourages use of placebo controls when an alternative treatment is available for comparison. What must be measured in the trials? In a straightforward trial, a readily quantifiable parameter (a secondary or surrogate end point), thought to be predictive of relevant clinical outcomes, is measured in matched drug- and placebo-treated groups. Examples of surrogate end points include LDL cholesterol as a predictor of myocardial infarction, bone mineral density as a predictor of fractures, or hemoglobin A1c as a predictor of the complications of diabetes mellitus. More stringent trials would require demonstration of reduction of the incidence of myocardial infarction in patients taking a candidate drug in comparison with those taking an HMG-CoA reductase inhibitor (statin) or other LDL cholesterol-lowering agent, or reduction in the incidence of fractures in comparison with those taking a bisphosphonate. Use of surrogate end points significantly reduces cost and time required to complete trials, but there are many mitigating factors, including the significance of the surrogate end point to the disease that the candidate drug is intended to treat.

Some of the difficulties are well illustrated by recent experiences with ezetimibe, a drug that inhibits absorption of cholesterol from the GI tract and lowers LDL cholesterol concentrations in plasma, especially when used in combination with a statin. Lowering of LDL cholesterol was assumed to be an appropriate surrogate end point for the effectiveness of ezetimibe to reduce myocardial infarction and stroke. Surprisingly, the ENHANCE trial demonstrated that the combination of ezetimibe and a statin did not reduce intima-media thickness of carotid arteries (a more direct measure of subendothelial cholesterol accumulation) compared with the statin alone, despite the fact that the drug combination lowered LDL cholesterol concentrations substantially more than did either drug alone. Critics of ENHANCE argue that the patients in the study had familial hypercholesterolemia, had been treated with statins for years, and did not have carotid artery thickening at the initiation of the study. Should ezetimibe have been approved? Must we return to measurement of true clinical end points (e.g., myocardial infarction) before approval of drugs that lower cholesterol by novel mechanisms? The costs involved in such extensive and expensive trials must be borne somehow (see below). Such a study (IMPROVE-IT) is now in progress.

The drug torcetrapib provides a related example in the same therapeutic area. Torcetrapib elevates HDL cholesterol (the “good cholesterol”), and higher levels of HDL cholesterol are statistically associated with (are a surrogate end point for) a lower incidence of myocardial infarction. Surprisingly, clinical administration of torcetrapib caused a significant increase in mortality from cardiovascular events, ending a development path of 15 years and $800 million. In this case, approval of the drug based on this secondary end point would have been a mistake.

No drug is totally safe; all drugs produce unwanted effects in at least some people at some dose. Many unwanted and serious effects of drugs occur so infrequently, perhaps only once in several thousand patients, that they go undetected in the relatively small populations (a few thousand) in the standard phase III clinical trial (see Table 1–1).

To detect and verify that such events are in fact drug-related would require administration of the drug to tens or hundreds of thousands of people during clinical trials, adding enormous expense and time to drug development and delaying access to potentially beneficial therapies. In general, the true spectrum and incidence of untoward effects becomes known only after a drug is released to the broader market and used by a large number of people (phase IV, postmarketing surveillance). Drug development costs and drug prices could be reduced substantially if the public were willing to accept more risk. This would require changing the way we think about a pharmaceutical company’s liability for damages from an unwanted effect of a drug that was not detected in clinical trials deemed adequate by the FDA.

While the concept is obvious, many lose sight of the fact that extremely severe unwanted effects of a drug, including death, may be deemed acceptable if its therapeutic effect is sufficiently unique and valuable. Such dilemmas are not simple and can become issues for great debate.

Several strategies exist to detect adverse reactions after marketing of a drug. Formal approaches for estimation of the magnitude of an adverse drug response include the follow-up or “cohort” study of patients who are receiving a particular drug; the “case-control” study, where the frequency of drug use in cases of adverse responses is compared to controls; and meta-analysis of pre- and post-marketing studies. Additional approaches also must be used. Spontaneous reporting of adverse reactions has proven to be an effective way to generate an early signal that a drug may be causing an adverse event. Recently, considerable effort has gone into improving the reporting system in the U.S., called MedWatch (see Appendix I). The primary sources for the reports are responsible, alert physicians; other useful sources are nurses, pharmacists, and students in these disciplines. In addition, hospital-based pharmacy and therapeutics committees and quality assurance committees frequently are charged with monitoring adverse drug reactions in hospitalized patients. The simple forms for reporting may be obtained 24 h a day, 7 days a week by calling 800-FDA-1088; alternatively, adverse reactions can be reported directly using the Internet ( Health professionals also may contact the pharmaceutical manufacturer, who is legally obligated to file reports with the FDA.


Drugs can save lives, prolong lives, and improve the quality of people’s lives. However, in a free-market economy, access to drugs is not equitable. Not surprisingly, there is tension between those who treat drugs as entitlements and those who view drugs as high-tech products of a capitalistic society. Supporters of the entitlement position argue that a constitutional right to life should guarantee access to drugs and other healthcare, and they are critical of pharmaceutical companies and others who profit from the business of making and selling drugs. Free-marketers point out that, without a profit motive, it would be difficult to generate the resources and innovation required for new drug development. Given the public interest in the pharmaceutical industry, drug development is both a scientific process and a political one in which attitudes can change quickly. Little more than a decade ago Merck was named as America’s most admired company by Fortune magazine 7 years in a row—a record that still stands. In the 2011 survey, no pharmaceutical company ranked in the top 10 most admired companies in the U.S.

Critics of the pharmaceutical industry frequently begin from the position that people (and animals) need to be protected from greedy and unscrupulous companies and scientists. In the absence of a government-controlled drug development enterprise, our current system relies predominantly on investor-owned pharmaceutical companies that, like other companies, have a profit motive and an obligation to shareholders. The price of prescription drugs causes great consternation among consumers, especially as many health insurers seek to control costs by choosing not to cover certain “brand-name” products. Further, a few drugs (especially for treatment of cancer) have been introduced to the market in recent years at prices that greatly exceeded the costs of development, manufacture, and marketing of the product. Many of these products were discovered in government laboratories or in university laboratories supported by federal grants. The U.S. is the only large country that places no controls on drug prices and where price plays no role in the drug approval process. Many U.S. drugs cost much more in the U.S. than overseas; thus, U.S. consumers subsidize drug costs for the rest of the world, and they are irritated by that fact.

The drug development process is long, expensive, and risky (see Figure 1–1 and Table 1–1). Consequently, drugs must be priced to recover the substantial costs of invention and development, and to fund the marketing efforts needed to introduce new products to physicians and patients. Nevertheless, as U.S. healthcare spending continues to rise at an alarming pace, prescription drugs account for only ~10% of total healthcare expenditures, and a significant fraction of this drug cost is for low-priced nonproprietary medicines. Although the increase in prices is significant in certain classes of drugs (e.g., anticancer agents), the total price of prescription drugs is growing at a slower rate than other healthcare costs. Even drastic reductions in drug prices that would severely limit new drug invention would not lower the overall healthcare budget by more than a few percent.

Are profit margins excessive among the major pharmaceutical companies? There is no objective answer to this question. Pragmatic answers come from the markets and from company survival statistics. The costs to bring products to market are enormous; the success rate is low (accounting for much of the cost); effective patent protection is only about a decade (see “Intellectual Property and Patents”), requiring every company to completely reinvent itself on a roughly 10-year cycle; regulation is stringent; product liability is great; competition is fierce; with mergers and acquisitions, the number of companies in the pharmaceutical world is shrinking.


The cost of prescription drugs is borne by consumers (“out-of-pocket”), private insurers, and public insurance programs such as Medicare, Medicaid, and the State Children’s Health Insurance Program (SCHIP). Recent initiatives by major retailers and mail-order pharmacies run by private insurers to offer consumer incentives for purchase of generic drugs have helped to contain the portion of household expenses spent on pharmaceuticals; however, more than one-third of total retail drug costs in the U.S. are paid with public funds—tax dollars.

Healthcare in the U.S. is more expensive than everywhere else, but it is not, on average, demonstrably better than everywhere else. Forty-five million Americans are uninsured and seek routine medical care in emergency rooms. Solutions to these real problems must recognize both the need for effective ways to incentivize innovation and to permit, recognize, and reward compassionate medical care.


Drug invention produces intellectual property eligible for patent protection, protection that is important for innovation. The U.S. patent protection system provides protection for only 20 years from the time the patent is filed. During this period, the patent owner has exclusive rights to market and sell the drug. When the patent expires, equivalent (generic) products can come on the market; a generic product must be therapeutically equivalent to the original, contain equal amounts of the same active chemical ingredient, and achieve equal concentrations in blood when administered by the same routes. These generic preparations are sold much more cheaply than the original drug, and without the huge development costs borne by the original patent holder.

The long time course of drug development, usually >10 years (see Figure 1–1), reduces the time during which patent protection functions as intended. The Drug Price Competition and Patent Term Restoration Act of 1984 (the “Hatch-Waxman Act”) permits a patent holder to apply for extension of a patent term to compensate for delays in marketing caused by FDA approval processes; nonetheless, the average new drug brought to market now enjoys only ~10-12 years of patent protection. Some argue that patent protection for drugs should be shortened, so that earlier generic competition will lower healthcare costs. The counterargument is that new drugs would have to bear higher prices to provide adequate compensation to companies during a shorter period of protected time. If that is true, lengthening patent protection would actually permit lower prices. Recall that patent protection is worth little if a superior competitive product is invented and brought to market.

The Bayh-Dole Act (35 U.S.C. § 200) of 1980 created strong incentives for scientists at academic medical centers to approach drug invention with an entrepreneurial spirit. The Act transferred intellectual property rights to the researchers and their respective institutions in order to encourage partnerships with industry that would bring new products to market for the public’s benefit. This encouragement of public-private research collaborations has given rise to concerns about conflicts of interest by scientists and universities.


In an ideal world, physicians would learn all they need to know about drugs from the medical literature, and good drugs would thereby sell themselves. Instead, we have print advertising and visits from salespeople directed at physicians, and extensive direct-to-consumer advertising aimed at the public (in print, on the radio, and especially on television). There are roughly 100,000 pharmaceutical sales representatives in the U.S. who target ~10 times that number of physicians. It has been noted that college cheerleading squads are attractive sources for recruitment of this sales force. The amount spent on promotion of drugs approximates or perhaps even exceeds that spent on research and development. Pharmaceutical companies have been especially vulnerable to criticism for some of their marketing practices.

Promotional materials used by pharmaceutical companies cannot deviate from information contained in the package insert. In addition, there must be an acceptable balance between presentation of therapeutic claims for a product and discussion of unwanted effects. Nevertheless, direct-to-consumer advertising of drugs remains controversial and is permitted only in the U.S. and New Zealand. Physicians frequently succumb with misgivings to patients’ advertising-driven requests for specific medications. The counterargument is that patients are educated by such marketing efforts and in many cases will then seek medical care, especially for conditions that they may have been denying (e.g., depression). The major criticism of drug marketing involves some of the unsavory approaches used to influence physician behavior. Gifts of value (e.g., sports tickets) are now forbidden, but dinners where drug-prescribing information is presented are widespread. Large numbers of physicians are paid as “consultants” to make presentations in such settings. The acceptance of any gift, no matter how small, from a drug company by a physician, is now forbidden at many academic medical centers and by law in several states. The board of directors of the Pharmaceutical Research and Manufacturers of America has adopted an enhanced code on relationships with U.S. healthcare professionals that prohibits the distribution of noneducational items, prohibits company sales representatives from providing restaurant meals to healthcare professionals, and requires companies to ensure that their representatives are trained about laws and regulations that govern interactions with healthcare professionals.


There is concern about the degree to which U.S. and European patent protection laws have restricted access to potentially lifesaving drugs in developing countries. Because development of new drugs is so expensive, private-sector investment in pharmaceutical innovation naturally has focused on products that will have lucrative markets in wealthy countries such as the U.S., which combines patent protection with a free-market economy. To lower costs, companies increasingly test their experimental drugs outside the U.S. and the E.U., in countries such as China, India, and Mexico, where there is less regulation and easier access to large numbers of patients. If the drug is successful in obtaining marketing approval, consumers in these countries often cannot afford the drugs.

Some ethicists have argued that this practice violates the justice principle articulated in the Belmont Report (1979), which states that “research should not unduly involve persons from groups unlikely to be among the beneficiaries of subsequent applications of the research.” Conversely, the conduct of trials in developing nations also frequently brings needed medical attention to underserved populations.


Product liability laws are intended to protect consumers from defective products. Pharmaceutical companies can be sued for faulty design or manufacturing, deceptive promotional practices, violation of regulatory requirements, or failure to warn consumers of known risks. So-called “failure to warn” claims can be made against drug makers even when the product is approved by the FDA. With greater frequency, courts are finding companies that market prescription drugs directly to consumers responsible when these advertisements fail to provide an adequate warning of potential adverse effects.

Although injured patients are entitled to pursue legal remedies, the negative effects of product liability lawsuits against pharmaceutical companies may be considerable. First, fear of liability may cause pharmaceutical companies to be overly cautious about testing, delaying access to the drug. Second, the cost of drugs increases for consumers when pharmaceutical companies increase the length and number of trials they perform to identify even the smallest risks, and when regulatory agencies increase the number or intensity of regulatory reviews. Third, excessive liability costs create disincentives for development of orphan drugs, pharmaceuticals that benefit a small number of patients. Should pharmaceutical companies be liable for failure to warn when all of the rules were followed and the product was approved by the FDA but the unwanted effect was not detected because of its rarity or another confounding factor? The only way to find “all” of the unwanted effects that a drug may have is to market it—to conduct a phase IV “clinical trial” or observational study. This basic friction between risk to patients and the financial risk of drug development does not seem likely to be resolved except on a case-by-case basis.

The U.S. Supreme Court added further fuel to these fiery issues in 2009 in the case Wyeth v. Levine. A patient (Levine) suffered gangrene of an arm following inadvertent arterial administration of the drug promethazine. The healthcare provider had intended to administer the drug by so-called intravenous push. The FDA-approved label for the drug warned against but did not prohibit administration by intravenous push. The state courts and then the U.S. Supreme Court held both the healthcare provider and the company liable for damages. FDA approval of the label apparently neither protects a company from liability nor prevents individual states from imposing regulations more stringent than those required by the federal government.


“Me-too drug” is a term used to describe a pharmaceutical that is usually structurally similar to a drug already on the market. Other names used are derivative medications, molecular modifications, and follow-up drugs. In some cases, a me-too drug is a different molecule developed deliberately by a competitor company to take market share from the company with existing drugs on the market. When the market for a class of drugs is especially large, several companies can share the market and make a profit. Other me-too drugs result coincidentally from numerous companies developing products simultaneously without knowing which drugs will be approved for sale.

Some me-too drugs are only slightly altered formulations of a company’s own drug, packaged and promoted as if it really offers something new. An example of this type of me-too is the heartburn medication esomeprazole, marketed by the same company that makes omeprazole. Omeprazole is a mixture of 2 stereoisomers; esomeprazole contains only 1 of the isomers and is eliminated less rapidly. Development of esomeprazole created a new period of market exclusivity, although generic versions of omeprazole are marketed, as are branded congeners of omeprazole/esomeprazole.

There are valid criticisms of me-too drugs. First, an excessive emphasis on profit may stifle true innovation. Of the 487 drugs approved by the FDA between 1998 and 2003, only 67 (14%) were considered by the FDA to be new molecular entities. Second, some me-too drugs are more expensive than the older versions they seek to replace, increasing the costs of healthcare without corresponding benefit to patients. Nevertheless, for some patients, me-too drugs may have better efficacy or fewer side effects or promote compliance with the treatment regimen. For example, the me-too that can be taken once a day rather than more frequently is convenient and promotes compliance. Some me-too drugs add great value from a business and medical point of view. Atorvastatin was the seventh statin to be introduced to market; it subsequently became the best-selling drug in the world. Now that nonproprietary versions of simvastatin are available, sales of atorvastatin are declining. Billions of dollars might be saved, likely with little loss of benefit, if nonproprietary simvastatin were substituted for proprietary atorvastatin, with appropriate adjustment of dosages.

Critics argue that pharmaceutical companies are not innovative and do not take risks and, further, that medical progress is actually slowed by their excessive concentration on me-too products. Figure 1–2summarizes a few of the facts behind this and other arguments. Clearly, smaller numbers of new molecular entities reached FDA approval over the past decade, despite the industry’s enormous investment in research and development. This disconnect has occurred at a time when combinatorial chemistry was blooming, the human genome was being sequenced, highly automated techniques of screening were being developed, and new techniques of molecular biology and genetics were offering novel insights into the pathophysiology of human disease. Despite their innovations and successes (e.g., insulin, growth hormone, erythropoietin, and monoclonal antibodies to extracellular targets), the biotechnology companies have not, on balance, been more efficient at drug invention or discovery than the traditional major pharmaceutical companies.


Figure 1–2 The cost of drug invention is rising dramatically while productivity is declining. The peak in the mid-1990s was caused by the advent of PDUFA (see text), which facilitated elimination of a backlog.

The trends evident in Figure 1–2 must be reversed. The current path will not sustain today’s companies as they face a major wave of patent expirations over the next several years. There are arguments, some almost counterintuitive, that development of much more targeted, individualized drugs, based on a new generation of molecular diagnostic techniques and improved understanding of disease in individual patients, could improve both medical care and the survival of pharmaceutical companies. Finally, many of the advances in genetics and molecular biology are still new, particularly when measured in the time frame required for drug development. One can hope that modern molecular medicine will sustain the development of more efficacious and more specific pharmacological treatments for an ever wider spectrum of human diseases.