Most medicine nowadays comes from two different types of manufacturers. The first is biotechnology companies that use microorganisms to develop different medications. Then there are pharmaceuticals that make use of synthetic material and chemicals to produce the drugs we all know and use today. Both these entities would differ in their approach to operations, but they also differ in their finances and economics.
This article will analyze both the operational and financial aspects of the business to better educate you on how they differ and what roles they play in the industry.
BIOTECHNOLOGY
Biotechnology has been around for centuries and in ancient times was exclusively used for agriculture and livestock applications. Today, in addition to agriculture, biotechnology is used in many different areas and some of the products being made using biotechnology include beer, plastic, and, most relevant to this article, medicine. Biotech services have made pest-resistant crops a reality, directly increasing crop yields and preventing wastage.
In the medical sector, biotech has a lot of accomplishments to be proud of. Humira (used to treat arthritis) and Enbrel (used to treat autoimmune diseases) are some examples but one medicine that truly stands out is Rituxan. Rituxan is used in the treatment of cancer and slows down the growth of tumors for a variety of cancers.
All of these innovations have been possible because different biotech consulting firms and companies work with microorganisms to develop industrial processes. Because of promising results like Rituxan, a lot of biotech startups have begun to pop up with each one working on a cure or treatment for different ailments and to develop processes to streamline different industries like agriculture and livestock.
PHARMACEUTICAL COMPANIES
Pharmaceutical companies, on the other hand, adopt a different approach. Pharmaceuticals work solely to produce medicine and often use synthetic materials and chemicals to produce their drugs. Also, in comparison to biotech companies, pharmaceuticals produce much bigger revenues as their products are tried and tested and are in great demand because of that.Â
Pharmaceuticals are a trillion-dollar industry and holding such wealth also holds a great deal of influence, as we hear from time to time (big pharma and politics have been old friends). However, recently this wealth and influence, along with stringent FDA requirements, have begun to adversely affect the industry and innovation has slowed down in comparison to biotech, which continues to innovate as strongly as ever.Â
THE BUSINESS AND NUMBERS
Biotech companies have failed to gain traction mainly due to their high operating costs. Biotech research and development require time and in the business world, time is money. Biotech companies need to secure funding from time to time as research, and the individuals needed to carry out said research, requires a lot of money. Also, shareholders and investors want to see returns as fast as possible and innovative pursuits take a significant amount of time before they give payouts. Sometimes these payouts aren’t even guaranteed as it is hard to predict how a microorganism would act and what results it could produce.Â
Pharmaceutical companies are a lot more appealing to investors and shareholders as they are bound to produce results. These companies still use the same processes (albeit with more precision and speed) that have been in place for decades and they manufacture a product that has a standing demand. People will always get sick and they will always need medicine. It will take some time before biotechnology can cater to the same demand.
