The Difference Between Biotech and Pharma Wei Garofolo
If you’re new to biotech, you might wonder what the difference is between the biotechnology industry and the pharmaceutical industry. Both industries produce medicine, so it’s natural that they would become intertwined in most people’s minds. The two get even further confused when you consider the term “biopharma,” which describes companies that use a combination of biotechnology and pharmaceuticals. Both the biotechnology and pharmaceutical industries are known for researching and developing new drugs. Both industries have been around for hundreds of years, although modern biotechnology is much more recent. The two have some key differences, however. Here are the main differences between biotech and pharma:
BIOTECH Biotech companies, by definition, use the processes of living organisms in their work. Biotech companies produce all kinds of products, but most focus on medicine and agriculture. Alcohol, plastic, washing detergents, and cosmetics are all produced using biotechnology. Some well-known biotechnology companies include the Celgene Corp., Amgen Inc., Gilead Sciences, and Biogen Inc. Most biotech companies are on the smaller side.
PHARMA On the other hand, the pharmaceutical industry uses artificial sources to create new medicines. They test their products through empirical screenings rather than genetic engineering. Major pharmaceutical companies include Johnson & Johnson, Novartis and Roche, and Bayer AG. Pharmaceutical companies are generally larger businesses. They are usually funded by shareholders and provide a lower risk business model.
BUSINESS MODELS As you can see, these two industries differ not only in how they research and develop products, but also in their business models. Biotech companies generally rely on fundraising. As a result, the entire process of coming up with new ideas to the development, marketing, and sales of new products is completely different. It is necessary to “sell� your ideas before obtaining funding for any project. As a result, some well-merited biotechnology projects go unfunded. This is rare in the pharmaceutical industry. The term biopharma refers to big pharmaceutical companies that utilize biotechnology. So while biotech and pharma are very different, they do overlap at times.
If you were confused about the difference between biotechnology and pharmaceuticals, hopefully, you now have some clarity! Check my blog for more articles about biotechnology.
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