Pharmaceutical companies began forming in the late 1800s for the purpose of developing and selling drugs and healthcare related products. Many grew as an offshoot of existing chemical companies.
The term "Orphan Drugs" refers to medicinal products that are produced for the diagnosis, prevention or treatment of life-threatening or very serious, but rare, diseases. In the United States, an Orphan disease is one that affects less than 200,000 persons in the country. These drugs are termed "orphans" because the pharmaceutical industry has little interest in developing and marketing products intended for only a small number of patients suffering from very rare conditions. Orphan Drugs research and development is not cost effective.
The regulation of the products and drugs produced by Pharmaceutical Companies is under the auspices of the Food and Drug Administration (FDA) in the United States and the European Agency for the Evaluation of Medicinal Products (EMEA) in the European Union. The agencies must approve and license a product before it can be released on the market. Both serve as consumer watchdogs and seek to protect the consumer.
In the 1980's, biotechnology became the darling of the pharmaceutical industry. Both biotechnology and pharmaceutical companies have the same goal of discovering, developing and selling products that will aid the health of humans and animals. However, biotechnology, a science based upon the newly acquired ability to manipulate the DNA molecule, offered new approaches to drug design and development.
The estimate of the cost involved in developing a new drug has risen from one billion United States dollars to around 1.7 billion dollars, where it currently rests. These costs arise primarily from the extensive testing required for licensing prior to marketing a drug. Clinical trials on human beings and safety monitoring of the product take years to assemble the information and data required to satisfy the FDA (Food and Drug Administration) and to become approved by this agency.