The pharmaceutical industry in the United States has every reason to look powerful. Years ago, Europe led the way in drug development but since the second World War the United States has taken over and increased its lead, according to Dr Louis Galambos, professor of economics and business history at the Johns Hopkins University. Countries such as Germany, Britain and Switzerland have failed to keep up, he told a group of foreign journalists last week.
Innovation in the US has been aided by the National Institute of Health, state research universities and patent protection. "The rewards for successful innovation are greater in the US market than in Europe or Japan," Dr Galambos said.
Many multinational drug companies have their world headquarters and major research facilities located in New Jersey. Last week, I took a tour of a research facility belonging to the pharmaceutical giant Merck & Co. (known as Merck, Sharp & Dohme outside of the United States).
Last year, Merck's sales were $40.4 billion, up 23 per cent on the year before. Merck Research Laboratories is located in Rahway, New Jersey, about 22 miles south west of New York city.
It is Merck's largest research and manufacturing facility, comprising some 150 buildings spread across 208 acres and with 4,500 employees.
Worldwide, Merck employs 65,000 people and conducts business in 90 countries, including a manufacturing base at Ballydine in Co Tipperary.
Merck Research Laboratories conducts basic research in the US, Canada, England, France, Spain, Italy and Japan. It employs 7,500 clinicians, scientists and staff in 26 countries. More than 40 per cent of the people who work for the research laboratories have Masters or Doctoral degrees.
It takes an average of 12 to 14 years to develop a drug. According to Dr Laurence Hirsch, vice-president of public affairs at Merck Research Laboratories in Rahwah, the facility participates in all aspects of the drug process, from drug discovery to drug development, from clinical tests to launch. Last year Merck spent $2.4 billion on research and development, up from $800 million in 1990.
Yet, even with that kind of expenditure, only one in 5,000 compounds makes it to market, at an average total cost of nearly $500 million.
During its 110-year history in the United States, Merck was first to discover the measles and mumps vaccine and the vaccine for hepatitis B. Now, it is developing new products for depression and vaccines for cervical cancer, shingles and HIV/AIDS.
The day before my visit, Merck had announced it would offer two antiretroviral medicines for the treatment of HIV infection - Crixivan and Stocrin - at the lowest possible price to the developing world. According to a spokesman, Stocrin will cost a patient $500 per year in the developing world compared to about $6,000 per patient per year in the developed world. "This is a major humanitarian issue," he said. "Our effort is to be a catalyst . . . to make a statement."
Merck's online effort is also thriving. MerckMedco.com - the world's largest online pharmacy - dispenses 110,000 prescriptions a week.
The 65 million Americans who are members of the Merck Medco Managed Care plan can use it to order their drugs. At the website, a doctor enters the prescription for a drug refill or renewal. To access it, the patient puts in his identifying number and gets confirmation of his order on-screen. He is also told how much his co-payment will be. Then, the medicine is delivered to his door by one of 13 mail service pharmacies that Merck Medco operates.
Last summer, Merckmedco.com announced that visitors to its site, not just its members, could purchase over-the-counter medications, vitamins, herbal remedies and health and beauty products through an alliance with CVS.com, the online subsidiary of America's well-known drug store chain, CVS.
Just last month, Merck Medco joined AdvancePCS and Express Scripts in announcing their plans to set up a joint system by early next year to make it easier for doctors to send prescriptions to pharmacies over the Internet. Such a system, they said, could eliminate errors caused by misreading a doctor's handwriting, which is often illegible on prescriptions.
According to a 1999 report from the Institute of Medicine, errors cost $77 billion annually and cause 7,000 deaths a year. Fewer than 5 per cent of the US's 750,000 doctors send prescriptions electronically, although many send prescriptions by fax or telephone.
By using the system, called RxHub, the doctor would send an electronic prescription to a patient's pharmacy benefit manager before going to the pharmacy. The pharmacy benefit managers are already connected electronically to pharmacies, RxHub would extend these links to doctors' offices. Pharmacists might no longer need to make about 100 million phone calls a year to doctors' offices to clarify problems.
