LIBRARY
OF THE
MASSACHUSETTS INSTITUTE
OF TECHNOLOGY
Dewey
ALFRED
P.
SLOAN SCHOOL OF MANAGEMENT
R&D SYSTEMS DYNAMICS
IN
FEDERALLY REGULATED INDUSTRIES
Jack W. Blanchard
February 1973
*
#^6- 73
MASSACHUSETTS
INSTITUTE OF TECHNOLOGY
50 MEMORIAL DRIVE
CAMBRIDGE, MASSACHUSETTS 02139
'
MASS. INST. TECH.
NOV 261973
DEWEY LIBRARY
R&D SYSTEMS DYNAMICS IN
FEDERALLY REGULATED INDUSTRIES
Jack W. Blanchard
February 1973
#^6-73
Research was conducted while the author was a
Research Affiliate at the Alfred P. Sloan School
of Managenaent, MIT, from 1971 to
1972. He is
presently with the Special Projects Staff,
Office
of Research, Environmental
Protection Agency,
"Washington, DC 20460
JAr^
M.
I.
1.
28
1974
LIbrtARIES
1-A
ABSTRACT
Historical examples of the deleterious effects of hazardous
drugs were described. They were shown to lead to federal legislation controlling R&D in the pharmaceutical industry. Safety
evaluation R&D extensively utilizes standardized toxicological
methodology. Because of this, independent contract research
laboratories have been able to provide professional services in
standardized toxicology to the pharmaceutical industry. A case
interview study employing prepared questionnaire forms was conducted, R&D managers in both the pharmaceutical companies and
the independent contract research laboratories were interviewed
in order to compare the management of standardized toxicological
methodology as it applies to safety evaluation.
The results
form the basis
as summarized in
of standardized toxicological studies
for determining the safety of drugs.
These data,
Food and Drug Administration
order to determine product compliance with federal law. A model
the interrelationship between the FDA, the pharmaceutical com-
petition form, are evaluated by the
in
of
pany, the independent contract research laboratory and the consumer,
was presented as existing through information feedback systems
based on safety evaluation R&D. This model was used to explain
past R&D efforts associated with cause and effect relationships involving product safety associated with drugs.
The management
R&D
involving product compliance is shown
It serves to introduce a new factor
of uncertainty associated with R&D, which is unique to industries
whose products are regulated by federal law.
of
for the first time in this study.
(,71j543
1-B
Congressional control in the food and drug industry began in 1906,
with the enactment of the Federal Food and Drugs Act.
commerce
federal precedence in regulating
states and between the
of these
US and foreign countries.
It
established
materials among
This Act was the
first to establish federal authority in the protection of the public health
from
the illicit,
In 1938,
it
harmful or injurious effects
Congress repealed
the
of foods
and drugs.
Federal Food and Drugs Act when
proved inadequate in protecting public health.
spread outbreak of deaths in the US was found
purported drug, the Elixir of Sulfanilimide
(1).
to
During 1937, a widebe attributable
The Act was then
replaced by the Federal Food, Drug and Cosmetic Act of 1938.
effect of this new^ legislation
was
to outline specific
in providing for the protection of the
consumer from adulterated and
In the case of
the Act specifically stated that no drug could be introduced
into interstate
commerce
cation summarizing its
that drug.
The
federal controls
misbranded foods, drugs, drug devices and cosmetics.
new drugs,
to a
without the manufacturer submitting an appli-
R&D program
which established the safety
of
In addition, information about its physical and chemical
characteristics, manufacturing processes, labeling and a sample of the
drug as well, was required by the provisions of the Act.
The Federal Food, Drug and Cosmetic Act was amended
in sub-
sequent years to provide for additional regulatory control over foods
and color additives.
These amendments
ments specifically addressed
1961,
R&D
in the repeal of the old
require-
substances and their end-use.
however, another episode occurred involving drugs similar
which resulted
1938.
to these
instituted additional
In
to that
Federal Food and Drugs Act in
In this case, the tragic events involving the use of thalidomide by
expectant mothers resulted in a world-wide outbreak of phocomelia in
the neonatal population (2).
Instead of repeal, however, the Federal Food
Drug and Cosmetic Act was amended
in 1962 in order to prevent the
re-occurrence of the thalidomide episode involving other drugs.
It
directed that pharnnaceutical companies, not only establish safety, but
effectiveness and reliability of the drug as well.
ment provided
In addition, the
for the standardization of drug nannes,
amend-
control on adver-
tisements, factory inspection and effective control over state laws and
finally,
registration of drug manufacturing establishments and patent
In essence, federal regulatory control
information of drugs.
tended over the entire range of
R&D
was ex-
and marketing activities of the
drug industry.
The relationship between
industry
is,
the regulatory
The legal
therefore, both legal and scientific.
Food and Drugs Act
for the Federal
of 1906,
Federal Food, Drug and Cosmetic Act
regulate interstate
to
agency and the pharmaceutical
commerce.
and
replacement, the
was Congressional authority
of 1938,
The
its
justification
failure to protect public health by
simple legislation resulted in the detailed imposition of specific scientific
met by pharmaceutical
requirements as a part
of the
companies prior
commercialization of their products.
to the
law which had
Regulatory control over drugs
process of petitioning.
companies and
in
overall
order
to
This interaction takes place between pharmaceutical
comprised
R&D program
of two separate
application, or the IND.
IND
for
more extensive animal
petition,
volunteers.
This
petition process.
it
sequences which correspond
The
criteria.
R&D programs
the
Basically, the
carried out by the pharmaceutical connpany
meet federal regulatory
the basic introductory
new drug
maintained through the procedural
Food and Drug Administration (FDA).
the
petition process is
to the
is
be
to
If
and
the
is
first step
known as
FDA
summarizes
the investigational
approves and registers
allows interstate shipment of the experimental drug
is the
studies and for clinical research using
second sequence of the
R&D program
At this time the candidate drug
is not
human
in the
available for
-3-
Once
for sale.
summarized
NDA
is
the clinical
in a
research has been completed, the data are
new drug application
petition,
approved by the FDA, the drug
commerce.
interstate
FDA
gational
new drug
mits)
Clinical pharmacology (Phases
Clinical trials (Phase
to)
New drug
application to the
Commercialization
I
Investi-
(which per-
and
(leads
II)
(which results
III)
FDA
the
outlined below:
is
(w^hich results in)
application to the
If
Safety evaluation
(leads to)
in experimental animals
NDA.
then allowed to be sold via
is
The procedural process
New drug development
or the
in)
(which permits)
of the drug.
New drug development and
safety evaluation research in experi-
mental animals rely extensively on toxicology.
The applicability
of
toxicology to safety evaluation R&JD has been substantiated over the
years by several significant publications.
published by the technical staff of the
FDA
described in that publication had been in
The most
influential
in 1959 (3).
common use
was
The methods
by Toxicologists
prior to 1959, however.
Toxicology
is the scientific discipline
toxic characteristics of chemicals.
devoted
The degree
study of the
to the
of toxicity is directly
related to the dose of the chemical given, the duration of its exposure,
the route of its administration and the species of
chemical
tion
is
R&D,
A
Toxicology
investigated.
is the
animal
essence
in
which the
of safety evalua-
since the reciprocal of toxicity is safety.
series of publications by Weil and the
of the National
Academy
Food Protection Committee
of Sciences contributed information concerning
the effectiveness of toxicological nnethods in the safety evaluation of
chemicals
(4, 5, 6),
They
dealt with substantially similar
those published in 1959 by the
FDA. Weil suggested
methods as
that in feeding
-4-
some streamlining
studies using rats,
of long
term studies (two years)
could be made, based on predictions utilizing the results of short
The National Academy
(single exposure and three months) studies.
of Sciences found that
on the basis of
10
term
years experience, short term
and long term toxicological studies proved
to
be excellent indices in
establishing the safety of drugs, economic poisons, food chemicals and
cosmetics.
The most important impact
of these publications
was
their stan-
dardization of toxicological methodology in safety evaluation
Regardless
of the chemical,
R&D.
whether drug, food additive, economic
poison or cosmetic, the safe toxicological methods are employed in
The extensive use
determining their safety.
of toxicology in
the safety of chemicals
was broadly incorporated
Drug and Cosmetic Act
to specifically
Federal Food,
provide data necessary for
establishing the safety of chennicals the Act
the case of pharmaceutical companies,
into the
determining
was responsible
safety evaluation
for.
In
R&D programs
are, therefore, based extensively on toxicological methodology.
Because
evaluation
their
of the
of toxicological
methodology in safety
R&D, independent contract research laboratories have developed
own expertise
in this type of
services
widespread use
to
R&D
in providing these services to
activity.
manufacturers
of
They have been able
many
manufacturers engaged
to
provide their
different chemicals.
Their existence
has provided manufacturers of drugs, food additives, economic poisons
and cosmetics greater flexibility in the management of their safety
evaluation
R&D
programs.
The financial commitment
cology is difficult to analyze.
tion
use.
program depends on
In addition,
of
pharmaceutical companies in toxi-
The extensiveness
of the safety evalua-
the candidate drug chemical and its intended
expenditures assigned to the development of a parti-
cular drug are often not available, since the length of the
R&D program
generally extends from
R&D
Total
3 to 5
years prior
NDA
to
approval by the FDA.
costs are sometimes available, however, for a drug or a
This
category of drugs.
is not
due
to the
intransigence of pharmaceutical
companies, but simply because their accounting procedures are based
on total
R&D
budgets, rather than costs of individual studies in various
sequences in the
R&D
program.
This
is
due
to the fact that
pharma-
ceutical companies maintain stable research facilities and personnel.
In such cases,
the
number
of individual studies
performed and candi-
date drug chemicals investigated each year varies.
The
come
latest conaplete financial data available for the
from
the
Pharmaceutical Manufacturers Association (PMA),
their trade organization.
billion,
They indicate
$557 million were allocated
characterization shows that $44.
safety and toxicology.
that is
drug industry
R&D
9
that in 1969,
to total
R&D
on sales of $6. 2Z5
in the
US
(7).
Further
million were spent on in-house animal
expenditures assigned to contract research,
research done in independent contract research laboratories, amoun-
ted to $9. 7 million.
Since most of the contract research is in animal
safety and toxicology, these expenditures represented an extensive financial
commitment
in safety evaluation
R&D
in 1969.
Unfortunately, the
no longer includes these figures in their annual statistical
financial data for the pharmaceutical industry.
however, that in
1971,
R&D
R&D
methodology, and
pharmaceutical industry.
The basis
establishment of safety.
tries regulated by federal law,
in the
of
They have estimated,
(8).
has been shown, therefore, that the basis of safety evaluation
is toxicological
is the
summary
there would be approxinnately $7. 592 billion
in sales with $681 naillion allocated to
It
PMA
form
of toxicological
porting a grow^ing
number
of
it is
extensively financed by the
compliance with federal law
Because
of its
importance
to
services in safety evaluation
those indus-
R&D, generally
methodology, have formed the basis of sup-
of independent contract
research laboratories.
The Problem
The extensive financial commitment required
safety evaluation
R&D programs
maintain connplex
to
by pharmaceutical companies has re-
sulted in their development of two separate research capabilities.
combine
to offer
them financial and technical advantages.
These
Basically,
in-house research facilities are most commonplace, and are relied on
by many companies.
However, depending on the company, the use
of
independent contract research laboratories as an adjunct, or replace-
ment
has become a necessity.
of in-house capabilities
The independent
contract research laboratories have developed their expertise to simul-
taneously serve clients in other industries which also require safety
evaluation
R&D
in
order
to
commercialize their products.
The presence, therefore,
involved in safety evaluation
of two separate
R&D,
interview study in this field of
facilities,
both
offers a unique opportunity for a case
R&D
these research facilities reveals
research
A
nnanagenaent.
many
close inspection of
similarities as well as
some unique
differences.
Similarities exist between both facilities in the scientific aspect of
safety evaluation
R&D.
These are due
to the
standardized toxicological
studies on which the concept of safety is based.
of
Therefore, regardless
whether the studies are performed in the pharmaceutical conapany
research laboratory, or in the independent contract research laboratory,
they will require almost identical protocols.
Differences exist in the financial aspect of safety evaluation
tween both
facilities.
The financial support
laboratory is budgetary.
of the
is
That
is,
research
company income derived from product
of the
is
R&D
be-
pharmaceutical research
funded as a certain percent
sales.
The research
facility
maintained regardless of the number of toxicological studies, or number
of candidate
drug chemicals.
The
financial support of the independent
contract research laboratory, however, is based on the services
it
performs
for its clients.
Its
income
is
derived strictly from professional ser-
vices either to the private sector, or to governmental agencies.
research
maintained by the independent contract research labora-
facility
tory is a direct function of the income
it
provides, and
The
its size is
it
garners through the services
directly related to this income.
Managerial techniques will be investigated as they exist within:
A) different pharmaceutical research laboratories, B) different inde-
pendent contract research laboratories, and C) between pharmaceutical
company, and independent contract, research laboratories.
The applicability
formance
in the
of these relationships relative to: A) past
per-
pharmaceutical industry, and B) effect of federal regu-
latory controls involving
R&D
requirements on product safety with
respect to drugs, will be discussed.
managerial
R&D
skills unique to
R&D
In addition, the
development of
nnanagement associated with federally
regulated industries will be presented.
Materials and Methods
Directors
of Safety
were interviewed.
Evaluation
R&D
of four
pharmaceutical companies
Pharmaceutical companies were selected which main-
tained annual worldwide sales in excess of $100 million.
relatively snaall annual budget for contract research.
designated
Company A and Company
B.
operate a
These have been
The remaining two operate a
These have been desig-
relatively large annual budget for contract research.
nated
Two
Company C and Company D.
Research Directors
were interviewed.
different.
of four independent contract
The organizational structure
One was independently owned and
the original
owner and founder.
in preclinical toxicology to
It
still
of
research laboratories
each laboratory was
under the direction of
had been organized
to
pharmaceutical companies in
provide services
1961,
when these
subsequently becanne an integral requirement of the new drug amendments
to the
Federal Food, Drug and Cosmetic Act in 1962.
For purposes
of
-8identification,
are
it
Firm
has been labelled
The remaining three firms
I.
all subsidiaries of large organizations.
have
left after
taking their equity.
The original entrepreneurs
Professional managers are presently-
administering these firms.
Firm
laboratory in which there
no interaction between the management of the
is
II is
an international contract research
laboratory and the parent orgainzation.
Firm
III is
a national independent
contract research laboratory, which is a subsidiary of an international
professional service organization.
There
is
no influence from the parent
organization in the management of the research laboratory.
offered by
Firm
III,
parent organization.
however, do contribute
Firm IV
is a national
to the total
Services
services of the
independent contract research
laboratory which has recently been acquired and reorganized.
been
in operation during the
ments by the
FDA
in 1962,
development
of
more
It
had
stringent safety require-
and had moved into the area of providing ser-
vices in preclinical toxicology at that time.
The management
of
Firm
had previously been under stringent control by their former owners.
new ownership, however,
All interviews
it
is
IV
Under
operating with a greater degree of autonomy.
were conducted personally.
A
standardized question-
naire form was used for the survey of the Directors of Safety
Evaluation
R&D
at the
larly,
pharmaceutical companies, and appears in Appendix
a standardized questionnaire
form was used
Simi-
for the survey of the
Directors of the independent contract research laboratories.
naire form appears in Appendix
I.
Their question-
II.
Results
I.
Pharmaceutical Companies:
A.
Position. Experience and Educational Backg round
There were
study.
All
five professionals
were Directors
Corresponds
to
who participated
of Safety Evaluation.
(2)'^
in the case interview
Their responsibilities
question number in the questionnaire form.
involved the
management
of laboratory aninaal toxicology
Their experience in safety evaluation
R&D
ranged from
and they had authored numerous publications.
and pathology.
10 to 20
years,
There was one MD, one
DSc, one PhD, and two DVM's.
Organizational Design of the Research Facility
B.
In all cases, the Director exercised
immediate control over the toxi-
The design
cology and pathology sections of the research facility.
facility generally reflected the
(3 )
of the
R&dD requirements in support of the company
Since all companies interviewed produce a wide variety of pro-
products.
ducts, only personnel and facilities
managed by
the Directors
sidered as influencing operating policy in safety evaluation
were con-
R&D.
In the
case of Company C, their total complement was 40 staff members, of
w^hom
were professionals.
7
40 personnel, of
C.
whom
4
Company
In the case of
D, there w^ere
were professionals.
Product Mix of the Company
(4)
All companies produce ethical drugs.
In addition, they
market other
products requiring standardized toxicological studies for safety evaluation
research as required by either the Federal Food, Drug and Cosnaetic Act,
or the Federal Insecticide, Fungicide and Rodenticide Act.
D.
Percent Utilization
There was
Two
panies.
of the
Research Facility
a complete utilization of the
of the
research
companies had increased their
nnands of increased safety evaluation
in addition to safety evaluation
R&D
(B,D).
R&D, was an
(5)
facility at all
staff to
meet
com-
the de-
Methods development,
active part of their research
programs.
E.
Resource Allocation and the Use
of Outside
Research
(6, 7, 8)
All Directors utilize the services of independent contract research
laboratories.
The extent of their
policy of the company.
research
facilities
utilization depends on the operating
In the case of the companies that use outside
minimally
(A, B), the Directors
have convinced their
-10-
management
that safety evaluation
R&D
done internally results in much
greater control over the conduct of the research progrann, and consequently the data, although the overall costs are higher.
For those com-
panies that utilize independent contract research laboratories (C,D),
top
managment has decided
of the
and personnel.
they best serve the needs
Any research exceeding
Company
contracted out.
their capacity is then
D, on the other hand, has incorporated contract
research directly into the company's
R&D program
in a specific area,
Their reasoning in maintaining this policy
that of chronic feeding studies.
is that
moment
For example, Company C maintains limited research
company.
facilities
that for the
forecasting the frequency of chronic feeding studies
is difficult,
and considering their fluctuation over the years, they have delegated this
type of research to outside laboratories.
Given the general operating policy of the companies interviewed, research that
is
contracted out is done so at the discretion of the Directors,
with the concurrence of their management.
into account in electing to use outside
all
companies.
research
facilities are similar for
They are:
L To compensate
for internal fluctuations in work-load,
company
2.
To assist
3.
To provide technical expertise lacking within
4.
To provide additional work space for
the
The selection process
is
The considerations taken
similar for
all
in
meeting time requirement deadlines,
company,
the company.
of independent contract
conapanies.
the
research laboratories
First and foremost, technical competence
and personal knowledge of the professional in charge of the research
be contracted out is of utnnost importance.
research
is
also considered.
positive factor (C).
to
Secondly, the cost of the
Only one company listed proximity as a
Another had at one time considered this important
in their selection process, but
because of cost differentials among inde-
pendent contract research laboratories, they could no longer afford
to rely
-li-
on this factor (D).
Similar advantages in using independent contract research labora-
were voiced by
tories
bility in
all
Directors.
They provided resource
managing their own research programs, through
flexi-
the use of
space, facilities and expertise not available internally at a cost that is
attractive to thenn to get the job done.
F
.
Ev aluation
of Independent Contract Research Laboratories (9, 10,
11 )
All Directors evaluated independent contract research laboratories
favorably only
if
the laboratories
advertised they could do.
had the expertise
to
do the job they
They would not use contract research labora-
tories in which they doubted their conapetence.
Similarly, they had re-
servations about utilizing laboratories about which they knew^ very
or had no experience thennselves in the research which
was
to
littel,
be con-
tracted out.
Companies with a small contract research budget evaluated them on
the basis of the
competence
the laboratory in
of the scientists,
which they worked.
regarded versatility
more advantageous
in providing a
to
In
rather than on the basis of
terms
of the laboratory, they
wide variety of services as much
them than merely
their ability to do routine stand-
ardized toxicological research.
Companies which maintained
a large contract
research budget evalua-
ted independent contract research laboratories on their ability to
perform
comparable studies, and subsequently selected them on the basis
of
scheduling and cost.
Their selection process included provisions for
recognizing their specialty within a particular
regarded the laboratory
to
perform as
field.
In addition, they
a functioning unit within their
own
research program, adnninistrative compatability, as quite innportant.
Continuation of the present policy toward the use of independent contract research laboratories will
each category.
remain
the
same
for one
company from
The remainder are contemplating a change.
The company
operating on a small contract research budget is increasing their use of
-12the
research laboratories
company
(B).
As
of the
of the foreign
moment
based
they are minimally used for teratology,
reproduction and chronic feeding studies.
continues to
work
affiliates within the
If the
present arrangement
out well, they will consider their use as an alter-
native to the use of independent contract research laboratories.
remaining company with the large contract research budget
process of re-evaluating their present policy (D).
The
is in the
This has been brought
about due to their dissatisfaction in the maintenance of comnaunication
links with independent contract
research laboratories during long term
This has resulted in a lack of managerial control over
feeding studies.
the peripheral aspects of contract research.
G.
Evalu atio n of Regulat ory Ag encie s
The
FDA was
evaluated on technical and administrative criteria.
FDA was judged as fair in
lines for the FDA are unclear,
The
autonomously.
(IZ, 13)
The lack
able scientific decisions
technical areas.
Overall operating guide-
since each division is
managed somewhat
of an impartial referee in resolving question-
was regarded as discouraging.
In politically
FDA tends not to do a good job. The
the FDA are sometimes not practical,
emotional clinnates the
demands
for additional data by
or feasible,
because
of their unfamiliarity with the technical subtleties involved with
safety evaluation
R&D.
The companies regard research guidelines as
generally reasonable, however, they are reserving judgement on mutagenic guidelines until they
Time
become
finalized.
restrictions imposed by the
FDA which
are initiated when re-
quirements are published in the Federal Register are a real source of
concern.
This
is
especially true with regard to questions of format to
be used in submitting data in support of compliance requests.
The com-
panies are hard pressed to cope with this type of requirement, since
becomes an administrative
task, rather than an
R&D
it
requirement invol-
ving the establishment of the safety of the candidate drug chemical.
-13-
Company B regards
management as
the effect of
FDA
policy on long
a function of the division within the
term research
FDA.
The Cardio-
pulmonary and Renal Drug Division was cited as not having approved
any NDA's since 1966.
Most
of the
companies have sonae NDA's which
have not received approval after a period of up
to 100 naonths.
This,
NDA
however, was not the general characteristic of the status of their
programs.
The evaluation
of the
Environmental Protection Agency (EPA), was
prinnarily limited to those companies maintaining an
pesticides (B,C,D).
R&D program
in
Basically, the problems were attributed to organi-
zational difficulties -within the
EPA in
their
managing compliance
acti-
vities.
Company D has experienced
in
which three different professionals have handled their
a six
all
difficulties while dealing with the
month period, a lack
made
of coordination
was
petition.
quite apparent
Although the differences were not major, they have
before connpliance will be granted.
Within
when they
different technical decisions following their review of the
petition.
EPA
to
same
be met
In the opinion of the company, this indi-
cated a definite lack of overall operating policy in pesticides registration.
The EPA,
implement general operating
in their estimation, has yet to
guidelines for manufacturers to follow in pesticides registration procedures.
RkD (14, 15, 16)
Research guidelines promulgated by the FDA have considerably increased R&D activity in the drug industry. In addition, FDA technical
H.
Effect of Regulatory Controls on
criteria are
becoming more
difficult with
which
to
comply.
._
They are
asking for longer duration studies, increased sophistication in cross-
over experiments in clinical studies investigating wash-out times for
drugs.
to the
These studies, as
w^ell
increase in total cost of
The increasing dennands
as bioavailability requirements, have added
R&D
of the
in
new drug development.
FDA
in
R&D
requirements will dras-
-14tically affect the present
As
of the
moment,
composition of the pharnnaceutical industry.
takes on the average of
it
approval from the FDA.
of ethical drugs,
it
years
Very few small drug companies
afford this type of delay and
source of their income.
5 to 6
still
to obtain
w^ill
NDA
be able to
rely on ethical drug sales as a major
As they diversify a'way from the manufacturing
will leave only the larger
The regulatory effects on
R&D
companies
in safety evaluation
As
from
the National
have not yet been
Institute for Occupational Safety and Health (NIOSH)
noticed by the companies interviewed.
in the field.
to the effects of the
National
Center for Toxicological Research (NCTR), the pharmaceutical industry
as represented by the companies interviewed
or not
it
will have any impact.
In
order
to
is not
meet
able to evaluate whether
demands
the
of regulatory
controls from these, and other federal agencies, such as the Division of
Biologies Standards, or the Department of Transportation, most of the
companies have reorganized and expanded their corporate regulatory
They serve
affairs departments.
to
coordinate the activity of submitting
safety evaluation data to the proper regulatory agency in order to nneet the
diversified
I.
demands
of the various regulatory agencies.
Evaluation of the Pha rmaceutical Manufacturers Association
PMA
Technically, the
serves as an excellent
exchange of scientific information between
medium
members
industry through working committees of scientists.
ness of the
PMA, however,
of statements of
Prior
to their
difficulties arise
when
in
of the
promoting the
pharmaceutical
In judging the effectiveit
comes
to the
release, they are reviewed by non-technical committees and
PMA. The complex review process
results in either extensive delay, or failure to issue the statement.
generally
why
the
PMA is
ineffective as the representational
for the drug industry.
J.
issuance
methodology resulting from these working committees.
other corporate committees within the
is
(17)
R&D Trends
in the
Pharmaceutical Industry
(18, 19)
This
spokesman
-15-
FDA
ments
directives influence
R&D
nnanagement through their require-
for sophisticated research in safety evaluation studies.
the effect of colors on the safety of drug formulations,
availability,
and the question of the safety of saccharin have resulted
the
amount
Bio-
of clinical
There
research
degree of regulatory control that
is
is
in
increasing
an overall increase in the
being exerted on the pharmaceutical
industry in terms of safety evaluation research required for their products.
The trend
R&D management
in
search capabilities.
of
R&D
is to
increase flexibility of their re-
Some companies are
evaluating the incorporation
laboratories of their foreign based affiliates.
tinue to rely on independent contract
research laboratories
research services not routinely done internally.
term studies depends on
the
company and
v/ill
to
con-
provide
Their use for long
their satisfaction with the
adnninistrative arrangements involved with their
II.
Others
management.
Independent Contract Research Laboratories:
A.
Position, Experience and Educational
There were
study.
All
B ackground
(2, 3)
five individuals that participated in the case interview
had PhD degrees.
All of
them were, or had been, closely
associated with the management of safety evaluation R&D.
an average of
9
laboratories.
Tw^o had an average of
Three had
years experience in independent contract research
3
years experience, following 12
years of prior experience in the pharmaceutical industry.
professionals were
members
of scientific organizations,
All of the
and had authored
numerous technical publications,
B.
Organizational Design of the
Firm
I is
owned and managed by
mately 100 personnel, of w^hom
of three operating divisions.
7
Firm
its
(4 )
founder.
It
employs approxi-
hold doctoral degrees.
Firnn
II
It is
comprised
underwent reorganization following
acquisition and employs approximately 80 personnel, of whona 7 hold
doctoral degrees.
It is
comprised
of four operating divisions.
Firmlll
-16-
did not undergo reorganization following acquisition by a larger
pany.
level professionals, all of
It is
whom
retained a staff of 30 personnel, of
It
whom
4 are doctoral
are engaged in biological research.
Firm
connprised of four operating divisions.
IV underwent exten-
sive reorganization following acquisition, and currently
mately 350 personnel, with a professional
level degrees.
C.
It is
comprised
of the
employs approxi-
staff of 33 holding doctoral
of 5 operating divisions.
Products Evaluated and Distr ibution
Each
com-
of
Services
firms interviewed has the capacity
(5, 6, 7)
to test
any of the
products regulated by the Federal Food, Drug and Cosmetic Act.
The
distribution of their services, therefore, is dependent on their success
in
garnering research contracts in a particular
Their services
field.
Two
primarily involve the use of laboratory animals.
of the
firms inter-
viewed, for example, are substantially involved in providing services in
preclinical pharmacology
a
minor source
(I,
of inconne.
IV).
Screening studies, however, represent
Analytical and clinical chemistry, as well as
microbiology studies are not consistent producers
firms, however,
Firm
II
offered by the firms interviewed.
volume
of their services while
They provide services
income among the
derives substantial income in microbiology.
Domestic animal studies do not form
the
of
a
major portion
of the services
All firms are attempting to increase
expanding into new areas of expertise.
to clients in safety evaluation
federal laws other than the Federal Food,
R&D
relative to
Drug and Cosmetic
Act,
such
as the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA), and
the Federal
Hazardous Substances Act (FHSA).
service client accounts in
D.
R&D management
One firm has begun
to
(III).
Resource Allocation and Decision Making
in
Maintaining ServiceViabili ty
(8,9,10)
Resources are committed
needs of the client
to establish
in satisfying
services to meet anticipated
regulatory criteria.
Internal financial
-17-
requirements are greatest for direct labor costs.
from government contracts
allocating income
cating
income from private sector accounts
as the introduction of new services.
These are
offset
by-
for salaries, while allo-
other categories, such
to
All firms are expanding their
services in an attempt to offset fluctuations in the business of contract
New
research.
if
services are initiated and project proposals issued only
the expertise is available within the firm.
of non-salaried
work
in
order
All firms utilize overtime
employees, part-time help and subcontracting
excess work-load relative
to handle
to the
of pathology
capacity of the
firm.
Cli ent Contact and its Relationship to
E.
Firm
(11, 12, 13, 14, 15, 16, 17,
Performance
in
response
Performance
of the
18 )
defined as the amount of sales derived from services
is
to client contact.
All services provided by these firms in
toxicological nnethodology to the private sector clients are of specific
duration, ranging
from
2
weeks up
to 2 years.
When
dealing with the
federal governnnent, however, research services tend to be open-ended.
Only professional
contact
is
staff
members
preferred by
all
are involved in client contact.
firms, and
is
Personal
usually done on a one-to-one basis
Special units are assigned to garner govern-
with private sector clients.
ment contracts and generally are not involved with private sector
The
contact.
is
ratio of private sector to
client
government contract accounts
dependent on the operating policy of the independent contract research
laboratory.
Firms
II
Firms
I
and
III
do not have any government contract accounts.
and IV do have government contracts.
Most firms allocate income
from government contract accounts toward operating expenses.
from private sector accounts
The two sources
of
is
to the
w^hat the
market
v/ill
bear.
income are utilized by the independent contract research
laboratory in order to maintain
important
determined by
Income
firm
is
its
business viability.
By
far the
most
income derived from private sector accounts.
-18-
The incidence
Once
study.
client contact is high prior to the initiation of any
the study is initiated, however,
The longer
tion.
of
the study, the
it
more frequent
is
dependent on
its
dura-
Private
the contact.
sector clients from large companies are generally technically oriented
whereas, clients from smaller companies are administratively oriented.
Client contact is generally not shifted
during the study.
Its indication of
from one professional
to
another
Without client contact, there are no sales or services.
performance
of the
firm
is
absolute.
The success
of
the client contact resulting in sales is directly dependent on the professional
competence
contact
of the individual representing the firm.
was directly responsible
to its acquisition.
for
A
decreased accounts
Since income of the firnn
is
lack of client
of
Firm
IV prior
derived from sales of
its
services, the profitability of all firms interviewed indicates that they are
all positive
F.
performers.
Evaluation of Technical, Adnninistrative and Financial Per-
formance
(19,20, 21, 22, 23 )
All firms interview^ed used similar evaluation procedures.
performance
w^as
measured
internally by
management
Technical
of the scientific
aspects of the study, and externally by the evaluation of the report by the
client.
Generally the professional staff
member
on the basis of his contact with the client, was
survey.
In cases
in
responsible for the study,
charge of the technical
where studies are repetitious, technical surveys are no
Administrative performance was measured internally by the
longer done.
report preparation process, in addition to the cost of the study^
and exter-
nally by client satisfaction associated with the issuance of the final report.
Weekly records
of the
progress of in-house studies
completion are kept by two of the firms
kept at
Firm
I
{11,1V).
at
various stages of
Weekly surveys are not
for repetitive studies, but are kept for new^ studies.
Costs
are assigned to studies on the basis of the professional and administrative
time charged
to
them.
In addition, material costs are additional charges.
-19-
Management committee meetings are held
the firms have experienced
of the
managerial difficulties due
managennent from the laboratory.
culties in the internal
management
Firm
of the firnn
separation of the laboratory management.
II
has encountered
because
of the physical
Although the Directors of each
of the firm,
on technical, administrative and financial matters
Management
diffi-
is difficult
Without the closeness of naanagement
caused by the international structure
tain.
of
separation
to the
laboratory meet quarterly, communication between them
during the remainder of the year.
Two
periodically.
coordination of policy
is difficult to
main-
skilled in safety evaluation RfcD and familiar with
federal regulatory criteria
absolutely essential
is
if
the firms are to
achieve positive financial performance.
Prior
the
to its acquisition,
former management
of
Firm IV was
unfamiliar with the research requirements of the Federal Food, Drug
and Cosmetic Act.
laboratory.
such that
it
In addition, they
The result was
that they
were physically separated from
mismanaged
the firm badly enough
resulted in a negative financial performance during
entire period of control.
Conversely, since acquisition,
ment
at the
Firm
IV has maintained a positive financial performance.
Firm
I
the
vidth
its
manage-
laboratory and professionals skilled in safety evaluation R&iD,
has been profitable over the past
a profitable posture.
Firm
III
5
years.
Firm
has alw^ays been profitable.
II
has assumed
Firm
since
IV,
acquisition, has been operating profitably.
Internally, all firms used the profit and loss statement as the overall
measure
of the
firm's technical, administrative and financial performance.
Externally, comparisons with each other on competitive bidding was used
to evaluate their technical,
G.
administrative and financial performance.
Evaluation of Client
s
and Competitor's Research Facilities
(24, 25 )
In the pharmaceutical industry, there is a negative correlation be-
tween sales and
R&D
competence, and a positive correlation between
-20-
good company management and
The experience
of
Firm
R&D management
according
to Firna I.
has been that the larger the company, the
II
better staffed and equipped its research laboratory.
Evaluation of the competitor's research facilities
marily on the results of competitive bidding.
is
based pri-
Client feedback on
criticism of competitors capabilities was used as a basis of evaluating
the competitors of
Firm
It
II.
was
the opinion of
Firm
that all of
III
their competitors v/ere good businessmen, and given the fact that all
were competent professionals,
their ability to maintain client contact
resulted the success of the firm.
III.
H.
Evaluatio n of Regulatory Agencies (26)
The
FDA was
On
judged as having a realistic operating policy by
the other hand,
ting policy of
Firm IV expressed reservations about
FDA, and rated
it
as unrealistic, along with
ness to make decisions and characterized the
supervision of personnel.
however, than
it
Firnn
III
FDA
its
Firm
the opera-
unwilling-
as ineffective in
its
had the opposite opinion of the EPA,
expressed for the FDA.
They had experienced consi-
derable difficulty in pesticide registration when representing their clients.
This manifested itself in extensive delay by the
EPA
in
meeting
own
its
guidelines for time limits in responding to petition registration applicants.
In addition,
EPA had
behalf of their clients.
personnel at the
opinion of
Firm
R&D
lost
data submitted to them by
Firm
also been experienced by Firm
III.
IV, personnel in pesticide registration at the
inexperienced, and this results in a lack of decision-making.
that effective
I.
on
Inconsistent rulings on the part of different
EPA had
firms agreed that there
III
is ineffective
management
is
In the
EPA
are
Both
supervision of personnel and
non-existent in pesticides registration.
Factors in the Success of the Firm (27)
The primary factors
in the
success of independent contract research
laboratories were similar for each firm interviewed.
Competence
of
-21-
was paramount.
the professional staff
bilities in
R&D were
also mentioned.
Facilities and full service capa-
Strong marketing with
comitant client contact were also cited.
cited by two of the firms interviewed
J.
Business Trends
in
Proximity
its
con-
to the clients
was
(I, II).
Contract Research
(28, 29)
Preclinical as well as clinical research on an individual candidate
drug chennical could be done entirely within the independent contract
research laboratory according
to
Firm
I.
In the opinion of
Firm
IV,
however, independent contract research laboratories could replace
only toxicological research for pharmaceutical companies, while for
agricultural chemical companies, they could replace their toxicological,
pharmacological, quality control, metabolism and chemical stability
research capabilities.
Business trends in the
field of
independent contract research are
directly related to government regulatory criteria.
w^ould be no business.
teria in
terms
Forecasting trends
of providing the appropriate
panied by the ability of the firna
expected demand.
to
There appears
of
impending regulatory cri-
R&D
services must be accom-
comnnit resources in order to meet the
to
be a conscious effort on the part of
the firms interviewed toward offering a broad
than relying on a particular specialization.
number
spectrum
Also, the
number
of services,
In theopinion
of firnns in existence today will diminish,
consolidation.
Without them, there
ofFirm
11,
rather
the
either by attrition or
of federal contracts will begin to increase,
in contrast to past years.
Discussion
Regardless
of
whether they worked for pharmaceutical companies or
independent contract research laboratories, the professionals interviewed
w^ere highly educated and had extensive experience in safety evaluation
In addition,
R&D.
they were active in their individual field of expertise, as evi-
denced by their publication records.
-22-
Organizational differences between pharmaceutical, and inde-
pendent contract research laboratories reflected their business operating policies.
minates
The research
in both the
IND and
effort of the
NDA,
the
pharmaceutical company cul-
The function
of the Director of
Safety Evaluation is the integration of the data derived from the research
under his direction into the petition required for
the
FDA approval.
Since
research programs undertaken by the pharmaceutical companies in
safety evaluation
R&D
use of standardized toxicological
involve the
independent contract research laboratories have developed the
studies,
expertise to perform these services for a fee.
Whether or not they
are subsidiaries, or independently owned, their organizational design
reflected
how they best accomplished contract research
The personnel
of
in toxicology.
pharmaceutical companies maintaining a large
contract research budget and independent contract research laboratories showed
some similarity
individuals in the total
7
number
and 13%, with an average of
in the
of
9.
percentage of professional level
R&D
5%.
personnel.
This ranged between
In the case of pharmaceutical
panies, this applied to their toxicology and pathology departmert
In the case of independent contract
applied to their total
work
force.
and should not be extrapolated
s
com-
only.
research laboratories, however, this
These data are based on a small sample,
to the industry as a whole.
Pharmaceutical
companies with a small contract research budget maintained a large pool
of
R&D
personnel in order
to
accomplish
all of their
research objectives.
The business relationship between pharmaceutical companies and
independent contract research laboratories
is
based on products which
require safety evaluation R&D, as regulated by the Federal Food, Drug
and Cosmetic Act.
The relationship between
the independent contract
research laboratories and large pharmaceutical companies
between professionals both competent
R&D.
in toxicology
is
maintained
and safety evaluation
Smaller pharmaceutical companies have professionals representing
-23their scientific staff which tend to be less familiar -with the technical
aspects of safety evaluation R&D, and nnore administratively oriented.
They are generally much more concerned with
the financial aspects of
contract research.
In general, independent contract research laboratories receive
overflow research in excess of the research capacity of large companies.
Medium companies may
or
may
not have the technical expertise, and
they're usually looking at the financial area critically in w^hich contract
research offers them expertise they may not be able
internally into their
own
facilities.
to
incorporate
Small company clients don't have
the technical expertise and usually look at the financial areas very
critically.
For small companies, contract research offers them what
they themselves don't have, a research laboratory.
The independent contract research laboratory provides professional
services in toxicological methodology.
of either individual studies,
Its
income
or research projects.
cological studies are of short
is
derived on the basis
The majority
term duration, usually
6
of toxi-
months or
less,
while a few are intermediate and long term in length, ranging from 18
months
to
two years.
Generally, private sector clients utilize their
services in this manner.
Research projects, on the other hand, are com-
binations of short, intermediate and long
term toxicological
usually performed for government contracts.
of
Regardless
studies,
of the
source
income, independent contract research laboratories maintain operating
objectives which are directly related to the duration of the studies, or the
projects they perform,
since these are their only source of income.
Pharmaceutical companies maintain an
R&D
capacity consistent with
their business operating policy, as reflected in the tw^o categories outlined
in this study.
They are specialists
in ethical
drug R&D, and through
various combinations of their internal research capacity and the use of
independent contract research, they are able to maintain their
R&D
progranns
-24in order to
meet federal regulatory criteria pertaining
to their products.
Independent contract research laboratories have the capacity
any product manufactured by the pharmaceutical industry.
strengths in special areas of research.
bility of servicing other industries
Some have
In addition, they have the capa-
whose products are regulated by
other federal laws which also require safety evaluation
Pharmaceutical companies interviewed
research studies that exceed the capacity
R&D programs.
in this study contract out
of their
use of independent contract research laboratories
to the fluctuation in their w^ork
to test
research
is
Their
facility.
generally in response
load or to time requirements.
Similarly,
independent contract research laboratories subcontract out research
in
order
to
compensate for fluctuations
requirennents.
in
work
load,
or to meet time
There are differences between the two relationships
that pharmaceutical
companies contract out research
vide expertise lacking within the company, and
2)
in
order
to: 1)
in
pro-
provide additional work
space within the research
facility.
tories, on the other hand,
generally contract out only pathology work
Independent contract research labora-
which exceeds the work load capacity
of their facilities.
Evaluation of independent contract research laboratories by pharmaceutical companies revealed subtle differences which corresponded to
the extent of their use by the
company.
Companies which maintained
either a small or a large budget for contract research regarded personal
knowledge
of the individual scientist
and technical versatility of the inde-
pendent contract research laboratory as important factors.
In addition,
how^ever, those companies w^hich maintained a large budget for contract
research, regarded technical expertise on comparable studies by different
independent contract research laboratories, knowledge of the specialty of
various firms and their ability
to
accomodate administratively, as high
priority factors.
In the evaluation of pharmaceutical companies by the independent con-
-25tract research laboratories, there
lation bet'ween
was no indication
of a positive
company sales and competent research.
They did
correnote,
however, that there was a positive correlation between good company
management and competent research management.
Internal review of their performance by the independent contract
research laboratory was based on maintaining close control over the
technical and administrative variables by the firm.
however, -was based on financial performance.
Its
overall success,
Relative to private
sector accounts, this was intinnately associated with client contact and
its
close relationship to client satisfaction.
All firms recognized and
reacted to the importance of personal client contact and client feedback
in its relationship to profitability with
accounts.
regard
Government contracts tended
to private
sector client
to beinrpersonal
and not as
dependent on client contact for renewal.
The evaluation
of the
FDA
by pharmaceutical companies and indepen-
dent contract research laboratories reflected the degree of influence
exerted by the Agency upon each.
the
FDA
at
many
The pharmaceutical companies evaluated
different levels of its operation,
reflecting the close
relationship between the Agency and the companies.
The
FDA was
judged
fair in technical areas, although the lack of overall control on technical
judgments within the
FDA
occasion, the
FDA
resulted in unclear operating objectives.
had requested data which tended
to
be either unreason-
able to the objectives of the petition, or not technically practical.
was thought
to be
due either
to a
On
This
lack of sufficient familiarity with the re-
search procedures, or the imposition of politically emotional constraints
upon the FDA.
The separation
ceutical companies
of administrative requests
from technical controls,
upon the pharnna-
w^as difficult to deal with,
especially -with reference to time limitations and data format presentation.
There was a
split in the evaluation of the
FDA
by the independent contract
research laboratories, between what was stated as "realistic" and "unrealistic
-26-
operating policies.
Their evaluation, however, was confined only
this descriptive term,
the pharmaceutical
and was not specific.
Agreement existed between
companies and the independent contract research
laboratories, however, on the indecisiveness of the
note
was made
to
of the total
FDA.
NDA approvals by the
the FDA since 1966.
absence of
monary and Renal Drug Division
of
Particular
There was general agreement between
the
Cardiopul-
pharmaceutical companies
and the independent contract research laboratories concerning the existence
of ineffective
management
in pesticides registration at the
organizational difficulties attributed to the
EPA have
absence of an overall operating policy in this area.
EPA.
The
resulted in an
Inconsistency in
technical judgments by different personnel were experienced by both the
pharmaceutical companies and the independent contract research laboratories.
As regulatory controls over R&D by
the cost.
in
The demand
the
FDA
have increased, so has
for longer duration studies,
greater sophistication
research methods, have forced the pharmaceutical industry
their research capability,
to
increase
which has increased their operating costs.
The
larger conapanies have been able to meet the regulatory criteria of the
FDA much more
easily than the smaller companies.
of the interviewees representing the
It
w^as the opinion
pharmaceutical companies that increas-
ing regulatory requirements in the industry would force smaller companies
to diversify
taining their
away from
ethical drug manufacture.
commitment
to ethical
Those companies main-
drug production are also affected by
other federal law^s, and consequently other regulatory agencies.
to
meet
the diversified regulatory requirements,
In order
pharmaceutical com-
panies have, in general, begun to reorganize and expand their corporate
regulatory affairs departments.
None
of the
independent contract research
laboratories regard knowledge of regulatory requirements as a saleable
service, but rather an entre into obtaining client accounts in toxicology.
-27-
The success
of independent contract
meet
related to their ability to
of the
research laboratories
the increasing
demands
is directly-
R&D
for
services
pharmaceutical industry resulting from the imposition of federal
Their technical competence and professional exper-
regulatory controls.
coupled with their research facilities, strong marketing through client
tise,
contact, and proximity to the pharmaceutical companies, have all
been
innportant factors in their success.
The degree
tory
is
made by
of profit
inversely proportional to the time span associated
and directly proportional
ting objectives,
on a per study basis; that
margin
the greater
is,
of profit.
to the risk.
which
is
opera-
Objectives based
Objectives based on research projects;
a lower
Income derived from toxicological studies requires
effort
v/ith their
dealing with private sector clients, bring
government contracts, bring
that is, dealing with
research labora-
the independent contract
margin
a constant
highly dependent on personal contact.
Once
of profit.
marketing
the studies
are completed, income ceases, which then initiates the marketing effort.
Income derived from research projects requires
approach.
a different
marketing
Projects last for a longer period of time, generally on an
annual basis.
Garnering government contracts does not require a high
degree of personal contact, but rather involves written proposals which
are submitted
appropriate government granting agency for approval
to the
and funding.
The increasing degree
a greater response in
sequently generating
laboratories.
As a
flexibility of the
R&D
of federal regulatory
result, there
have expanded their use
requirements imposes
activities by the pharmaceutical industry,
more business
research
R&D
for the independent contract research
appears
to
facilities in both.
of foreign
sub-
be a trend toward a greater
Pharmaceutical companies
based research
affiliates.
Independent
contract research laboratories have expanded their capabilities in the
drug area
to include clinical,
as well as preclinical research.
Without the
-28-
presence of federal regulatory requirements involving product safety,
there would not be as large an effort in
try,
R&D
by the pharnnaceutical indus-
and similarly, there would be fewer independent contract research
laboratories in business.
Sumnriary and Conclusions
The main product
petition,
of the
pharmaceutical research laboratory
which summarizes for the company
data on a candidate drug chemical.
It is
all the available
used
FDA
appropriate federal law.
This subsequently leads
of the
from which
compliance
to obtain
commercialization
to
research laboratory, therefore,
their budget is derived.
is
managing
the
R&D
Its objectives
phase, over which
The
based on product sales,
are long ternn in that
they are oriented toward product compliance research.
not only
w^ith the
thus generating sales revenues for the company.
of the product,
income
order
research
provide evidence of
to
safety and efficacy to the
in
is the
This includes
has direct control, but
it
also managing the compliance phase.
The interrelationship between
the pharmaceutical
and the independent contract research laboratory
only
is this
due
to the fact that the interaction is
research laboratory
is quite
dynannic.
Not
based on toxicological
studies of specific duration, but also because there are a
number
of inde-
pendent contract research laboratories that are competing with each other
to
provide sim.ilar services to the pharmaceutical industry whose demands
are directly influenced by the FDA.
Long term operating objectives involve
in
mastering new toxicological methods.
research guidelines issued by the
the product safety
tories
is
R&D
make decisions
process.
in
the
development
These are directly related
FDA which become
to
incorporated into
Independent contract research labora-
commiting resources such
developed at just the right nnoment
tage over their competitors.
of expertise
in
order
that the expertise
to majxinnize the
advan-
Similarly, pharmaceutical research labora-
-29-
commit resources
tories
compliance purposes
extent,
vide
in
developing new toxicological methods for
in safety evaluation
R&D.
They may rely
to
however, on independent contract research laboratories
them with
some
to
pro-
the expertise in this area, either initially or permanently,
depending on the operating policy of the pharmaceutical company.
Methods development by independent contract research laboratories
in anticipation of
new federal regulatory
ceutical industry
may
internally.
It
required.
If
operation.
tained,
it
If
criteria
be described as either
depends on the professional
low^,
skills,
imposed on the pharmaor high risk operations
equipment and capital
these factors are already available, then
the professional skills,
is
it
Regardless
of the
a high risk venture externally,
since
developed and marketed at precisely the right moment.
there
w^ill
a low risk
equipment and capital nnust be ob-
represents a high risk cperation.
required, however,
it is
Too
resources
it
must be
early,
and
be a lack of demand, too late and the competition will have
already become too great
to
regain the investment costs within an accept-
able period of time.
Safety evaluation
R&D
in the federally regulated
pharmaceutical in-
dustry as described in this report operates as a network of information
feedback systems.
tems operating
These
ment.
There exists three distinct information feedback sys-
in the
research model selected for this case interview study.
illustrate the influence of extra -organizational factors on
R&D
manage-
Basically, the desired goal of the independent contract research
laboratory
is to
provide research services in toxicological methodology
The goal
for a profit.
of the
pharmaceutical company
is to
achieve pro-
duct compliance through toxicological methodology and clinical studies,
subsequently leading to commercialization and sales income.
of the
FDA
ducts under
system".
is
consumer protection from
its jurisdiction.
The goal
the deleterious effects of pro-
All of these goals exist in a "steady state
-30-
Information feedback systems applied
previously reported by Forrester
ment was
in
R&D
first
Its
(8, 9).
described by Roberts
to
(10).
management have been
application to
R&D manage-
Information feedback systems
interrelate the existence of multiple factors affecting research
goals relative to time.
ment within
This study
It
allows for a greater flexibility of manage-
the organization for
is the first
management
more
effective decision
making
which describes these systems applied
to
activities.
R&D
in a federally regulated industry operating at the extraorgani-
zational level.
The
first
two levels of information feedback systems exist at the
company-contract research laboratory
tory agency level.
They are operative
level,
in the petition preparation
product registration processes respectively.
negative feedback loop mechanisms.
and the company-regula-
They are both
The third level
first
and
order
of information
feedback system exists between the pharmaceutical company and the
combination of both the consumer and regulatory agency.
This system
operates in both a first order and second order negative feedback loop.
It is
activated only following the failure of the first order negative feed-
back loops associated with the
systems, which are intended
product prior
to
two levels of information feedback
first
to establish the safety
commercialization.
and efficacy of the
In essence, the third level operates
as a back-up system.
The driving force
that existing
of the first level of information feedback system,
between the pharmaceutical research laboratory and the
independent contract research laboratory,
is the
dynamic interaction
involving toxicological methodology on a per-study basis.
The indepen-
dent contract research laboratory has a supply of toxicologists, and
the facilities
necessary
to
provide services in toxicology.
these services, as reported in this study, on the basis
to initiate the study quickly (time),
expertise, and in
It
provides
of: cost,
ability
some cases proximity
31.
to the client.
The pharmaceutical research laboratory selects
The dia-
contract research laboratory on the basis of these factors.
gram
the
that follows outlines the first order negative feedback loop charact-
eristics of this interrelationship, -which is called the Studies
Dynamics Model.
System
Since these standardized toxicological studies are
and the fact that the independent contract research
of specific duration,
many
laboratory serves
mics Model operates
Studies System
clients simultaneously, the Studies
System Dyna-
at a rapid rate.
Dynamics Model
Supply of toxicologists and
available facilities at the
independent contract research
laboratory
Influences o rder
L.......
rate of the c:lient
j
^
Information as to; cost,
time, expertise and proximity to client, in addition
to toxicological data
X^<\
Level of standardized toxi-
^.
cological studies performed
for the pharmaceutical
from
company
(client)
studies.
The driving force
that existing
company's
of the second level of information feedback system,
between the pharmaceutical company and the FDA,
R&D
is the
objectives in obtaining compliance with federal law for
their candidate drug chemicals.
The pharmaceutical company has a
supply of toxicologists, as well as the facilities required to carry out the
necessary research program.
The Director
of Safety Evaluation is
sible for defining the toxicological characteristics, the
associated with their candidate drug chennical.
respon-
degree of safety,
The data generated on pre-
liminary, or screening studies are used to design a sequence of
more com-
-32-
The end product
plex toxicological studies.
a detailed report, the
IND
petition,
date drug chemical, and the
NDA
of the
summarizing
petition,
research program
is
the safety of the candi-
summarizing
its efficacy.
The
pharmaceutical company requests compliance with federal law through
the jurisdiction of the
FDA
The diagram
on the basis of the petition.
illustrated below outlines the first order negative feedback loop characteristic of this interrelationship,
Dynamics Model.
Because
which
is
called the Petition
of the extensiveness of the
and the time requirements of the review process
System
research program,
of the petitions
employed
by the FDA, the Petition System Dynamics Model does not operate at as
rapid a rate as the Studies System
Petition
Dynamics Model.
System Dynamics Model
Supply of toxicologists, and <^.^
available facilities at the phar
maceutical company's research laboratory
5-
Influences acceptance
or the rejection of the
petitions (IND, NDA)
•>l>3
^
Information as to the
safety and efficacy of
the candidate drug
chemical
The occurrence
Summary
1^1...
of standardized
toxicological study data in
petition form (IND, NDA) for
the
FDA
of either unanticipated deleterious effects of the
drug on the consumer, or subsequent research data indicating potential
harmful effects of the drug following
its
commercialization,
ving force of the third level of information feedback system.
between the pharmaceutical company, the consumer and
the
is the
It
dri-
operates
FDA.
If
either one or both of these factors occur, first and second order negative
-33-
They operate
feedback loops are activated.
first initially affects the sale of the
commercialization
the
facturer.
drug
in
two sequences.
The
while the second affects
itself,
subsequent drugs, irrespective of the manu-
of all
The diagram illustrated below includes characteristics
of the
interrelationships between the pharmaceutical company, the consumer
and the FDA.
Model.
Its
It is
Coisumer Protection System Dynamics
called the
sequence involves the delay of drug sales
rate.
It
The
complexity, however, requires an explanation.
(la),
and operates
also involves the requirement of additional
The
tively establish drug safety (la),
R&D
first sequence,
first
at a rapid
data to defini-
parts la and
lb,
operates at generally the same rate as the Petition System Dynamics
Model.
ments
all
The second sequence
(2a),
represents the altered
R&D
require-
for all products in the original drug category, and subsequently
drugs under the jurisdiction of the FDA.
rate than that seen in the Petition
It
operates at a
System Dynamics Model.
much slower
It
includes
development of new toxicological methodology, which results
the
issuance of new^ research guidelines by the
FDA.
quently incorporated into safety evaluation
R&D
in the
These are then subse-
requirements for the
registration of all new^ candidate drug chemicals.
Consumer Protection System Dynamics Model
C^ Manufacture r^l„„,^„„,
C^ oi
Drug
A
&
All manufactu rers of C
^
Drug
Additional safety
evaluation R&D re
quirements for
Drug
Drug
i
A
Inventory
A
m
(*)
I
Altered safety evalu-
Regulatory
in sales|
Consumer h'''"""^^"''""'''"""'"^
catego
ationR&D requiremeit;
for Drug A category
Agenc
icy
^^i^"-"-—-^ Delay
A
Unanticipated deleterious effects
(Z'a)
I
-34-
These information feedback systems serve
evaluation
R&D
steady state.
It
pharmaceutical industry exists in a dynamic
in the
operates between the independent contract research
laboratory, the pharmaceutical company, the
tration and the consumer.
report, the
to illustrate that safety-
On
Food and Drug Adminis-
the basis of the data presented in this
diagram illustrated below simultaneously summarizes these
interactions.
Steady-State System Dynamics of Safety Evaluation R£;:D in the
Pharmaceutical Industry
1
Stud ies I
f"
data
JiND &.NDAi
^
Independent Contract
Pharmaceutical
Research Laboratory
Company
^
j
Safety Eval-
/ /
j"^*
/
[
'"luationR&D
I
requirements
I.
data
I
-A
II
,>,
.
Safety Evaluation R&D
.requirenaents
|
I
**"•!
*
III
Unanticipated!.
hazards
|
I
I:
II:
III:
Studies System Dynamics Model
Petition System Dynamics Model
Consumer Protection System Dynamics Model
These systems dynamics models can be used
organizational interactions involving
Using
R&D
R&D
in the
to
describe past extra-
pharmaceutical industry.
expenditures, number of participating pharmaceutical
panies and number of new drugs introduced since 1949, Graph
prepared.
in
Appendix
A
The data were obtained from sources
13
and
14,
I
com-
has been
and tabulated
III.
close inspection of Graph
I
;
i---''
reveals that the level of the introduction
-35.
'
'
o
o
o
Number
Number
o
of Participating
of
New
Companies
Single Chemical Entities
o
00
o
urt
O
t3
O
a
,-X.
.
''I
Too
*
o
d«
o
•H
X
U1
<
CO
in
05
<
o
in
in
o
u
M
o
3
o
go
nl
Q
o
O
O
o
in
—o
o
—oT"
o
IM
o
o
(sj-EXXOp JO SUOT^XT"')
ssjn^ipuadx^ CP?'a Ajjsnpui
X'biox
——
—oT"
o
-36o£
new drugs has generally paralleled
the nunnber of participating
In 1961, however, a sharp decrease in the intro-
drug companies.
duction of new drugs occurred a year before a similar decrease in
participating drug companies
be
made with
Model.
The
the aid of the
was noted.
An explanation
initiating event in this case
was
the thalidomide episode
and
been introduced
to the
Federal
The thalidomide episode triggered
Food, Drug and Cosmetic Act.
la
may
Consumer Protection Systems Dynanaics
and the resultant Kefauver -Harris Drug Amendment
sequences
for this
Since thalidomide -containing drugs had not yet
lb.
in the US,
they
were prevented from comnaercializa-
In light of the deleterious effects initiated by thalidomide, new^
tion.
drugs w^hich contained thalidomide, but had not yet received IND or
NDA
approvals were delayed by the FDA, pending the development of
toxicological methodology designed to determine their mutagenic potential.
Subsequently, sequence 2a was initiated, whereby these new
toxicological nnethods
requiring
FDA
The
approval.
decline in the
number
which point
levelled
it
were required
final
for all candidate drug chemicals
outcome
of participating
off.
of these actions
was
a
drug companies until 1965, at
The stabilization
of the introduction of new^
drugs occurred in 1963.
Sinnultaneously,
R&D
expenditures since 1963 have increased con-
siderably.
Although the drug companies were becoming more diligent
in obtaining
IND and
more.
NDA
approvals, the process was costing them
much
Their reliance on the services of independent contract research
laboratories, to the extent of
9. 7
million dollars in 1969, indicated that
pharmaceutical companies utilized their services in order
increasing costs of their
R&D
programs.
The reliance
to offset the
of two of the in-
dependent contract research laboratories on income derived from preclinical toxicology, and the attempts of the other two in garnering
in this area,
work
clearly indicates their financial relationship with the phar-
-37-
maceutical industry.
The Studies System Dynamics Model
illus-
trates this interaction.
As
the costs of
R&D programs
R&D
increased following additional
requirements instituted by the Kefauver-Harris amendment, fev/er
pharmaceutical companies elected
This resulted in the introduction of fewer new drugs.
ment.
data presented in Appendix
number
of participating
from 1962
to 1971
it
III
show
that the 10 y ear annual
companies from 1952
A
declined to 65.
to 1961
was
average
113,
to 1971,
interestingly, however, the final result
of participating
from 1952
From
to 1961.
of these annual differences.
was
1962
Most
that the difference
between
drug companies and the number of new^ drugs
much
introduced annually, was
the period
1952 to
new drugs were introduced annually.
how^ever, only 18
number
while
From
an average of 43 new drugs w^ere introduced annually.
1961,
The
similar decrease in the introduc-
new drugs occurred during these same periods.
tion of
the
new drug develop-
to participate in
less
from 1962
The data
What
in
than that seen in
to 1971,
Appendix
this indicates,
show
III
is
the averages
an increase in the
efficiency of the participating pharmaceutical companies in gaining
FDA
approvals of their new drug applications (NDA's).
System Dynamics Model
illustrates the development of this interaction,
Mansfield has reported that
degrees of uncertainty
field,
is
is
The Petition
(12).
R&D management
operates in various
Research management, according
to
Mans-
characterized by uncertainty, while development management
characterized by less uncertainty.
The influence
of federal regulatory
criteria involving the determination of product safety and efficacy prior
to
commercialization, interposes another criteria on
not previously reported, that of product compliance
action of
to
FDA
in approving,
management.
The
NDA petition serves
with R&D management
or rejecting the IND or
increase the degree of uncertainty associated
in the federally regulated
R&D management
pharmaceutical industry.
The decision-making
-
process
of the
FDA
38-
relative to IND's and
between the completion
the time span
comnnercialization.
NDA's
of the
results in expanding
RfcD program and product
R&D management
This compliance factor in
is
unique to industries whose products are regulated by federal law and
administered by federal regulatory agencies.
The emphasis imposed on the management
cological methodology
was characterized by
of standardized toxi-
the
employer.
The inde-
pendent contract research laboratory manager was interested in how
efficiently he could
income
perform
the study and report its results,
w^as directly related to his product, the final report.
not only with
many
since
He deals
different pharmaceutical companies, but also
com-
panies in other industries whose products are regulated by federal law.
The pharmaceutical company manager, on the other hand, was concerned
not only with
are applied
managing his safety evaluation program, but how
to the
of these petitions
IND and
NDA
petition,
its
results
and further, the disposition
by the FDA.
In conclusion, therefore, this working paper identifies the key ad-
ministrative and economic factors in
the
pharmaceutical industry.
It
R&D management
associated with
develops the verbal theory of cause and
effect interaction, and a description of the decision making policies
volved with safety evaluation
the independent contract
of negative
R&D
between the pharmaceutical company,
research laboratory and the FDA.
information feedback systems in
time has been described.
in-
Its application to
R&D
The behavior
managennent relative
to
other industries whose pro-
ducts are regulated by federal law based on consumer protection appears
highly probable, and the
to clarify this
mechanism described
complex relationship.
in this
paper should serve
-39-
Appendix
I
Pharmaceutical Company Questionnaire
Name
Position
a.
b.
c.
d.
e.
Education
Length of employment with the company
Length of time in present position
Experience in the company prior to your present position
Experience prior to joining the company
Organizational data of the research facility under your direction
a. Laboratory animal toxicology
1. Professionals
2.
Staff
3.
Facilities
Percent of internal R&D expenditures in
Domestic animal toxicology
4.
b.
1.
Professionals
2.
Staff
3.
Facilities
Percent of internal R&D expenditures in
Analytical chemistry and organic synthesis
4.
c.
1.
d.
Staff
3.
Facilities
4. Percent of internal
Industrial hygiene
.
2.
Staff
3.
Facilities
Percent of internal
Othe r
What is the product
a. Foods
b. Food additives
1.
2.
c.
d.
e.
f.
Indirect
Direct
Ethical
Over-the-counter
Drug devices
Cosmetics
Economic poisons
2.
area
R&D
expenditures in this area
R&D
expenditures in this area
nnix of your connpany?
Drugs
1.
this
Professionals
4.
e
area
Professionals
2.
1.
this
.40-
g.
5.
Other
What
is the
percent utilization of the laboratory over the past 12 months?
R&D
a.
Total
b.
Animal toxicology
Domestic animal toxicology
Analytical chemistry and organic synthesis
c.
d.
e. Industrial
f.
6.
Other
Has your laboratory ever used independent contract research laboratories?
a. Yes
1.
b.
7.
hygiene
Hov/ frequently?
2.
How many?
3.
For what type
of
research?
No
1.
Why?
2.
Is this
standard operating policy?
How
do the foUovinLng factors influence your decisions regarding resource
allocations relative to the use of independent contract research laboratories?
a. Within the company
1.
2.
3.
4.
5.
6.
Top management
Middle management
Current work-load of the laboratory
Technical capability of the staff
Physical capability of the laboratory
Technical feasability of the project
Financial allocation of R&D funds
Within the independent contract research laboratory
7.
b.
1.
2.
3.
4.
5.
8.
a.
feel that the use of independent contract
research laboratories
advantageous?
Yes
1.
2.
3.
b.
capability
Administrative capability
Technical capability
Location
Financial costs
Do you
is
Technically
Administratively
Financially
No
1.
9.
Manage rial
Why?
What is your evaluation of independent contract research laboratories?
a. Compared to your own laboratory
b. Compared to one another
-41-
Technically
Financially
Administratively
1.
2.
3.
10.
11.
12.
On the basis of your experiences, could you comment on whether the
use of independent contract research laboratories could, or could
not replace any segment of R&D under your direction?
Will your present use of independent contract research laboratories
continue as future policy for the company?
What
a.
b.
13.
is your evaluation of the Food and Drug Administration?
Technically
Administratively (with reference to registration procedures)
What
a.
b.
your evaluation of the Environmental Protection Agency?
Technically
Administratively with reference to registration procedures for
is
(
econonnic poisons)
14.
What is the
company?
15.
Do you
EPA
16.
effect of
FDA
policy on long
term
R&D management
in
your
anticipate similar FDA-like regulatory activity emanating from
to affect your company and industry in the future?
and NIOSH
Has your company begun
to
assemble the internal capabilities
to
handle
regulatory activities originating from these regulatory agencies?
17.
What
the
a.
b.
is
your evaluation of your trade organization in
its
interaction with
FDA?
As a representative organization
As a representative organization
your industry
of the regulatory aspects of your
of the scientific aspects of
industry
18.
19-
Will internal R&D activity as
continue in the future?
Do you
form?
feel that
R&D
it is
presently constituted in your company
activity in your industry will continue in its present
-42-
Appendix
II
Independent Contract Research Laboratory Questionnaire
1.
2.
Name
Position
a.
b.
c.
d.
Length of employnaent with the firm
Length of time in present position
Experience in the firm prior to your present position
Experience prior to joining the firm
3.
Professional activities
a. Educational experience
b. What professional society memberships do you hold?
1. Have you attended their annual meetings?
2. Have you presented papers at these meetings?
c. How many trade organization memberships does the firna hold?
1. Have you attended their annual meetings?
2. Have you presented papers at these meetings?
d. How many publications have you authored?
1. As a member of the firm
2. Prior to joining the firm
4.
What
organizational data and history of the firm?
independently owned?
Is it a subsidiary?
1. How long has the firm been a subsidiary?
2. Have there been management changes within the firm following
acquisition?
is the
a. Is it
b.
a.
Yes
1. Top nnanagement
2.
3.
Project management
Technical staff
No
Have these changes inaproved firm performance?
b.
3.
a.
b.
5.
With private sector clients
With government contracts
What are the products
a. Foods
b. Food additives
1.
2.
c.
Indirect
Direct
Drugs
1.
Ethical
Over-the-counter
Drug devices
2.
d.
that the
firm evaluates?
-43e.
f.
g.
6.
Cosmetics
Economic poisons
Other
How
have the services provided by the firna been distributed over the
past year?
a. Laboratory animal toxicology
1. Exploratory
2. Screening
4.
Safety
Efficacy
5.
Metabolism
6.
Other
3.
b.
Domestic animal toxicology
1.
2.
3.
4.
c.
e.
5.
Metabolism
Other
Analytical chemistry
1. Food additives
3.
Drugs
Economic poisons
4.
Other
Clinical chemistry
Industrial hygiene
1.
f.
7.
Safety
Efficacy
6.
2.
d.
Exploratory
Screening
Environmental exposure
a.
Air pollution
b.
Water pollution
2. Occupational exposure
Other
Has
the use of services provided by the firm for the past year typified
previous yearly trends?
a.
b.
c.
Ye s
No
Has there been any reason behind a
shift to the
present distribution
of services?
1.
Internal
a.
b.
2.
8.
How
Development of new methods
Procurement of new personnel
External
a. New ventures taken by your clients
b. Regulatory activities dictating a change
do the following factors influence your decisions regarding resource
-44allocations?
a.
Top management
Within the firm if independently owned
Within the parent organization if a subsidiary
Technical feasability of the project
Technical capability of the laboratory and staff
Financial allocation of funds
Regulatory climate
Current work-load of the laboratory
Current status of the business viability of the firm
1.
2.
b.
c.
d.
e.
f.
g.
9.
How
a.
b.
c.
d.
10.
do the following factors affect your decision-making activities?
Expanding an existing service
Decreasing an existing service
Eliminating an existing service
Initiating a new service
How
do the following factors influence the project proposals initiated
by the firnn?
a. Existance of a need for technical services offered by the firnn
b. Technical expertise of the professional staff
c. Technical feasability of the project
d. Viability of the commitment of the project to the firm
11.
What
is the level of
professional staff effort involved with governmental
client contact?
a.
b.
What is the total number of professionals involved?
Has this number increased, decreased or remained constant over
the
past year?
12.
What
is the level of
professional staff effort involved with private sector
client contact?
a.
b.
What is the total number of professionals involved?
Has this number increased, decreased or remained constant over
the past year?
13.
Once
a contract has
been received, what has been the level
of client
contact during the period of the study?
a.
Sequence
1. Before receiving the request for proposal (RFP)
2. Before receiving the contract
3. During the study period
4. Following the issuance of the final report
5. Average during acute studies
6. Average during subacute studies
7. Average during chronic studies
b.
Has
client contact shifted
from one
level of professional to another
following the receipt of the contract?
-45-
1.
2.
14.
Within the laboratory
Within the client's laboratory
Can any correlation be made as
to the technical, or
managerial level of
the professional involved in client contact relative to the nunaber of
contracts?
15.
Are your
16.
Does your
client contacts technical or administrative personnel?
client contact policy
change as
to
whether they are technically
or administratively oriented?
On
17.
your experiences, do you feel that clients with technical
backgrounds utilize your services more effectively that clients with
administrative backgrounds?
18.
Have you been able to determine if there is a positive correlation
between client contact and client satisfaction?
19.
Do you perform
the basis of
the foUov/ing evaluation procedures involving the service
firm provides?
Administrative survey
1. Date the sample as received
2. Date the initiation of the study
3. Date the termination of the study
4. Date the issuance of the final report
Technical survey
1. Do you monitor the following items regarding the conduct of the
study?
that the
a.
b.
a.
b.
2.
Do you
a.
b.
20.
b.
c.
d.
e.
f.
g.
22.
omission
conamission
raionitor the following
Errors
Errors
of
of
items regarding the final reports?
omission
comnaission
often do you review your internal evaluation precedures?
Once a month
Once every other month
Once every quarter
Once every other quarter
Once a year
For all client accounts?
Prior
to client
contacts?
Have these procedures aided your management
of the
Have these quality control procedures improved
to
23.
of
of
How
a.
21.
Errors
Errors
firm?
the services offered
your clients?
What are
the procedures
used in evaluating the
firna's technical
and
-46-
financial
performances?
a. Internally
1.
Total number of clients
2.
3.
4.
5.
Amount of repeat business
Total amount of contract work
Cash flow
Number of staff over a fixed period
of time
Size of the facility over a fixed period of time
b. Externally
1. Performance in competetive bidding on identical projects
2. Performance in services offered in areas serviced by competetors
3. Client feed-back on the firm's performance
6.
Market survey of competetors
What was the profit picture of the firm for the past 5 years?
What were the primary factors, in your opinion, responsible for
this performance?
4.
c.
d.
24.
b.
Direct costs
3.
Indirect costs
is your evaluation of independent contract research laboratories?
Relative to the firm
Relative to each other
What
a.
b.
c.
d.
e.
26.
Billings
2.
What
a.
25.
1.
your evaluation of industrial research laboratories?
In toxicological research
In areas similar to what your firm offers in services
Clients with large research facilities
Clients with medium research facilities
Clients with small research facilities
is
What is your evaluation of the regulatory agencies?
a. Food and Drug Administration
Technical
2. Administrative (registration)
Environmental Protection Agency
1. Technical
2. Administrative (registration)
1.
b.
27.
What have been
28.
On
the
primary factors responsible for
R&D
a.
29.
firm?
comment on whether the use
research laboratories could, or could not replace
the basis of your experiences, could you
of independent contract
b.
the success of the
capabilities in:
Industrial research laboratories
Governmental research laboratories
Have you been able
to
observe any trends in the business of independent
contract research laboratories over the past year?
-47-
Appendix
Totallndustry Number of New Number of
Difference be-
R&DExpendi-
tween Companies
and NewSingle
Chemical Entities
tures.
Year
1949
III *
{naillion$)
Single Chemi- Participating
cal Entities
Companies
Introduced
Surveyed
-48-
References
1.
Elixir of Sulfanilamide-Massengill:
J.
2.
Mellin,
J.
3.
Amer. Med. Assoc.
I, II, III,
& VII;
IV, V, VI,
109:1531-1539(1937).
G.W. & M. Katzenstein, The saga
of thalidomide.
New
Eng.
Med. 267:1184-1193; 1238-1244(1962).
Food and Drug Administration, Appraisal of the Safety of Ch emicals
Foods, Drugs and Cosmetics Association of Food and Drug
in
;
Officials,
U.S., Austin, Texas, 107 pp. 1959.
4.
Weil, C.S., M.D. Woodside, J.R. Bernard, andC.P. Carpenter, Relationship between single-peroral, one-week, and ninety day rat
feeding studies, Tox, App. Pharm. 14:426-431(1969).
5.
Weil, C.S. and D.D. McCoUister, Relationship between short- and longterm feeding studies in designing an effective toxicity test. Agri.
Food Chem. 11:486-491(1963).
6.
Food Protection Committee, Food and Nutrition Board, Evaluating the
Safety of Food Chemicals, NAS-NRC publication. National Academy
of Sciences, Washington, D. C." (in press).
7.
Standard & Poor's Industry Surveys: Drugs, Medical Care and Cosmetics,
Basic Analysis page D14, June 18, 1970.
;
8.
Standard & Poor's Industry Surveys; Health Care, Drugs and Cosmetics,
Basic Analysis page H23, June 24, 1971.
;
9.
10.
Forrester, J.W., Industrial Dynamics.
;
The MIT Press, Cambridge,
1971.
Forrester, J.W., Principles of Systems, Wright-Allen Press, Inc., 2nd
Preliminary Edition, Cambridge,
1971.
11.
Roberts, E.B., The Dynamics of Research and Development
Row Inc., New York, 1964,
12.
Mansfield, E.
The Economics of Technological Change,
Co.
&
Inc., New York, pp. 77-80, 1968.
W.W. Norton
13.
Standard & Poor's Industry Surveys (Drugs); 1949 through
1971.
14.
,
,
Harper &
Hearings on Drug Safety, Part I; Before a subcommittee of the committee of government operations; House of Representatives, 88th
Congress, 2nd Session; March 24, 25; April 8, June 3, 1964.
;
V
V
Date Due
APR.
PEP
1
5
1
1994
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