ABSTRACT
The Act of 1938 required drug companies to submit safety documents for their products, and the Amendments of 1962 made it mandatory for drug companies to provide science-based clinical trials to prove the efficacy of new products. Before the passage of the drug Acts, it may have been a golden era for drug companies to make money with skillful salespersons who advertised their drugs without scientific evidence. Besides higher costs associated with drug approvals, pharmaceutical companies are earning less from their patented drugs that have expired. These two factors alone make a very challenging situation in the industry. In addition to the high expense of drug development, the biopharmaceutical industry has been under pressure due to its low productivity in terms of new drug approvals. Further, new drug development takes between six and ten years, and high expenses mean low profitability.
