meant it is usually done by the larger pharmaceutical companies. the pharmaceuticals and biotechnology industry spends more than 15% of its net sales for research & development which is in comparison with other industries by far the highest share. often, large multinational corporations exhibit vertical integration, participating in a broad range of drug discovery and development, manufacturing and quality control, marketing, sales, and distribution. smaller organizations, on the other hand, often focus on a specific aspect such as discovering drug candidates or developing formulations. often, collaborative agreements between research organizations and large pharmaceutical companies are formed to explore the potential of new drug substances. more recently, multi-nationals are increasingly relying on contract research organizations to manage drug development. the cost of innovation drug discovery and development are very expensive; of all compounds investigated for use in humans only a small fraction are eventually approved in most nations by government-appointed medical institutions or boards, who have to approve new drugs before they can be marketed in those countries. in 2010 18 nmes (new molecular entities) were approved and three biologics by the fda, or 21 in total, which is down from 26 in 2009 and 24 in 2008. on the other hand, there were only 18 approvals in total in 2007 and 22 back in 2006. since 2001, the center for drug evaluation and research has averaged 22.9 approvals a year. this approval comes only after heavy investment in pre-clinical development and clinical trials, as well as a commitment to ongoing safety monitoring. drugs which fail part-way through this process often incur large costs, while generating no revenue in return. if the cost of these failed drugs is taken into account, the cost of developing a successful new drug (new chemical entity, or nce), has been estimated at us$1.3 billion (not including marketing expenses). professors light and lexchin reported in 2012, however, that the rate of approval for new drugs has been a relatively stable average rate of 15 to 25 for decades. industry-wide research and investment reached a record $65.3 billion in 2009. while the cost of research in the u.s. was about $34.2 billion between 1995 and 2010, revenues rose faster (revenues rose by $200.4 billion in that time). a study by the consulting firm bain & company reported that the cost for discovering, developing and launching (which factored in marketing and other business expenses) a new drug (along with the prospective drugs that fail) rose over a five-year period to nearly $1.7 billion in 2003. according to forbes, by 2010 development costs were between $4 billion to $11 billion per drug. some of these estimates also take into account the opportunity cost of investing capital many years before revenues are realized (see time-value of money). because of the very long time needed for discovery, development, and approval of pharmaceuticals, these costs can accumulate to nearly half the total expense. a direct consequence within the pharmaceutical industry value chain is that major pharmaceutical multinationals tend to increasingly outsource risks related to fundamental research, which somewhat reshapes the industry ecosystem with biotechnology companies playing an increasingly important role, and overall strategies being redefined accordingly. some approved drugs, such as those based on re-formulation of an existing active ingredient (also referred to as line-extensions) are much less expensive to develop. product approval in the united states, new pharmaceutical products must be approved by the food and drug administration (fda) as being both safe and effective. this process generally involves submission of an investigational new drug filing with sufficient pre-clinical data to support proceeding with human trials. following ind approval, three phases of progressively larger human clinical trials may be conducted. phase i generally studies toxicity using healthy volunteers. phase ii can include pharmacokinetics and dosing in patients, and phase iii is a very large study of efficacy in the intended patient population. following the successful completion of phase iii testing, a new drug application is submitted to the fda. the fda reviews the data and if the product is seen as having a positive benefit-risk assessment, approval to market the product in the us is granted. a fourth phase of post-approval surveillance is also often required due to the fact that even the largest clinical trials cannot effectively predict the prevalence of rare side-effects. postmarketing surveillance ensures that after marketing the safety of a drug is monitored closely. in certain instances, its indication may need to be limited to particular patient groups, and in others the substance is withdrawn from the market completely. the fda provides information about approved drugs at the orange book site. in the uk, the medicines and healthcare products regulatory agency approves and evaluates drugs for use. normally an approval in the uk and other european countries comes later than one in the usa. then it is the national institute for health and care excellence (nice), for england and wales, who decides if and how the national health service (nhs) will allow (in the sense of paying for) their use. the british national formulary is the core guide for pharmacists and clinicians. in many non-us western countries, a 'fourth hurdle' of cost effectiveness analysis has developed before new technologies can be provided. this focuses on the 'efficacy price tag' (in terms of, for example, the cost per qaly) of the technologies in question. in england and wales nice decides whether and in what circumstances drugs and technologies will be made available by the nhs, whilst similar arrangements exist with the scottish medicines consortium in scotland, and the pharmaceutical benefits advisory committee in australia. a product must pass the threshold for cost-effectiveness if it is to be approved. treatments must represent 'value for money' and a net benefit to society. orphan drugs main article: orphan drug there are special rules for certain rare diseases ("orphan diseases") in several major drug regulatory territories. for example, diseases involving fewer than 200,000 patients in the united states, or larger populations in certain circumstances are subject to the orphan drug act. because medical research and development of drugs to treat such diseases is financially disadvantageous, companies that do so are rewarded with tax reductions, fee waivers, and market exclusivity on that drug for a limited time (seven years), regardless of whether the drug is protected by patents. global sales top 20 drug companies by revenue (2022) company pharma revenue($ million) pfizer 100,330 johnson & johnson 94,940 roche 66,260 merck & co 59,280 abbvie 58,050 novartis 50,540 bristol myers squibb 46,160 sanofi 45.220 astrazeneca / 44,350 gsk 36.150 takeda 30,000 eli lilly and company 28,550 gilead sciences 27,280 bayer 26,640 amgen 26,320 boehringer ingelheim 25,280 novo nordisk 25,000 moderna 19,260 merck kgaa 19.160 biontech 18,200 in 2011, global spending on prescription drugs topped $954 billion, even as growth slowed somewhat in europe and north america. the united states accounts for more than a third of the global pharmaceutical market, with $340 billion in annual sales followed by the eu and japan. emerging markets such as china, russia, south korea and mexico outpaced that market, growing a huge 81 percent. the top ten best-selling drugs of 2013 totaled $75.6 billion in sales, with the anti-inflammatory drug humira being the best-selling drug worldwide at $10.7 billion in sales. the second and third best selling were enbrel and remicade, respectively. the top three best-selling drugs in the united states in 2013 were abilify ($6.3 billion,) nexium ($6 billion) and humira ($5.4 billion). the best-selling drug ever, lipitor, averaged $13 billion annually and netted $141 billion total over its lifetime before pfizer's patent expired in november 2011. ims health publishes an analysis of trends expected in the pharmaceutical industry in 2007, including increasing profits in most sectors despite loss of some patents, and new 'blockbuster' drugs on the horizon. patents and generics depending on a number of considerations, a company may apply for and be granted a patent for the drug, or the process of producing the drug, granting exclusivity rights typically for about 20 years. however, only after rigorous study and testing, which takes 10 to 15 years on average, will governmental authorities grant permission for the company to market and sell the drug. patent protection enables the owner of the patent to recover the costs of research and development through high profit margins for the branded drug. when the patent protection for the drug expires, a generic drug is usually developed and sold by a competing company. the development and approval of generics is less expensive, allowing them to be sold at a lower price. often the owner of the branded drug will introduce a generic version before the patent expires in order to get a head start in the generic market. restructuring has therefore become routine, driven by the patent expiration of products launched during the industry's "golden era" in the 1990s and companies' failure to develop sufficient new blockbuster products to replace lost revenues. prescriptions in the u.s., the value of prescriptions increased over the period of 1995 to 2005 by 3.4 billion annually, a 61 percent increase. retail sales of prescription drugs jumped 250 percent from $72 billion to $250 billion, while the average price of prescriptions more than doubled from $30 to $68. marketing advertising is common in healthcare journals as well as through more mainstream media routes. in some countries, notably the us, they are allowed to advertise directly to the general public. pharmaceutical companies generally employ salespeople (often called 'drug reps' or, an older term, 'detail men') to market directly and personally to physicians and other healthcare providers. in some countries, notably the us, pharmaceutical companies also employ lobbyists to influence politicians. marketing of prescription drugs in the us is regulated by the federal prescription drug marketing act of 1987. the pharmaceutical marketing plan incorporates the spending plans, channels, and thoughts which will take the drug association, and its items and administrations, forward in the current scene. to healthcare professionals the book bad pharma also discusses the influence of drug representatives, how ghostwriters are employed by the drug companies to write papers for academics to publish, how independent the academic journals really are, how the drug companies finance doctors' continuing education, and how patients' groups are often funded by industry. direct to consumer advertising main article: direct-to-consumer advertising since the 1980s, new methods of marketing for prescription drugs to consumers have become important. direct-to-consumer media advertising was legalised in the fda guidance for industry on consumer-directed broadcast advertisements. controversies drug marketing and lobbying main articles: pharmaceutical marketing and pharmaceutical lobby there has been increasing controversy surrounding pharmaceutical marketing and influence. there have been accusations and findings of influence on doctors and other health professionals through drug reps including the constant provision of marketing 'gifts' and biased information to health professionals; highly prevalent advertising in journals and conferences; funding independent healthcare organizations and health promotion campaigns; lobbying physicians and politicians (more than any other industry in the us); sponsorship of medical schools or nurse training; sponsorship of continuing educational events, with influence on the curriculum; and hiring physicians as paid consultants on medical advisory boards. some advocacy groups, such as no free lunch and alltrials, have criticized the effect of drug marketing to physicians because they say it biases physicians to prescribe the marketed drugs even when others might be cheaper or better for the patient. there have been related accusations of disease mongering (over-medicalizing) to expand the market for medications. an inaugural conference on that subject took place in australia in 2006. in 2009, the government-funded national prescribing service launched the "finding evidence – recognizing hype" program, aimed at educating gps on methods for independent drug analysis. meta-analyses have shown that psychiatric studies sponsored by pharmaceutical companies are several times more likely to report positive results, and if a drug company employee is involved the effect is even larger. influence has also extended to the training of doctors and nurses in medical schools, which is being fought. it has been argued that the design of the diagnostic and statistical manual of mental disorders and the expansion of the criteria represents an increasing medicalization of human nature, or "disease mongering", driven by drug company influence on psychiatry. the potential for direct conflict of interest has been raised, partly because roughly half the authors who selected and defined the