SIC 2836 Biological Products, Except Diagnostic Substances

SIC 2836

This category covers establishments primarily engaged in the production of bacterial and virus vaccines, toxoids, and analogous products (such as allergenic extracts), serums, plasmas, and other blood derivatives for human or veterinary use, other than in vitro and in vivo diagnostic substances. Included in this industry are establishments primarily engaged in the production of microbiological products for other uses. Establishments primarily engaged in manufacturing in vitro and in vivo diagnostic substances are classified in SIC 2835: In Vitro and In Vivo Diagnostic Substances.

NAICS CODE(S)

325414

Biological Product (except Diagnostic) Manufacturing

INDUSTRY SNAPSHOT

According to statistics compiled by the U.S. Census Bureau, establishments classified in this industry shipped products valued at $11.77 billion in 2005, compared to $8.35 billion in 2002. Shipments included blood and blood derivatives for human use; vaccines, toxoids, and antigens for human use; biologics for human use; and biological products for veterinary, industrial, and other uses. The industry experienced considerable growth throughout the mid-2000s due to an increased government and public focus on developing vaccines.

BACKGROUND AND DEVELOPMENT

Biological products are created with biotechnology, the scientific and engineering procedures involved in manipulating organisms or biological components at the cellular, subcellular, or molecular level. These manipulations are carried out to make or modify plants and animals or other biological substances with desired traits. Although examples of primitive biotech processes date to ancient times (such as the use of fermentation in brewing and leavening agents in baking), their use in medical and pharmaceutical applications was an innovation of the latter decades of the twentieth century. Some analysts compare the biotech industry's impact on global medical care with the computer industry's impact on communication.

Biotech researchers produce products in essentially three ways: by developing ways to achieve commercial production of naturally occurring substances; by genetically altering naturally occurring substances; and by creating entirely new substances. Some of the tools used by biotech researchers include recombinant DNA and monoclonal antibodies. Recombinant DNA involves the ability to take the deoxyribonucleic acid (DNA) from one organism and combine it with the DNA from another organism, thereby creating new products and processes. By using recombinant DNA techniques researchers are able to select specific genes and introduce them into other cells or living organisms to create products with specific attributes. Monoclonal antibodies are developed from cultures of single cells using cloning techniques. They are designed for use in attacking toxins, viruses, and cancer cells.

The U.S. Food and Drug Administration (FDA) requires extensive scrutiny of products developed by biotech researchers before they can be offered for sale. Because the biological products presented for approval often involve new technologies or innovative therapies for diseases that have not previously been treated successfully, the approval process frequently proves long and costly. Many companies struggled financially through the 1980s waiting for an FDA determination.

One of the earliest biological products introduced to the U.S. marketplace was a blood protein first sold in 1966. The blood protein, called Factor VIII, was used by patients with hemophilia A to control bleeding episodes. Factor VIII, the blood factor responsible for normal clotting action, was manufactured from human blood received from donors. It was followed by the development of Factor IX for patients with hemophilia B.

During the early 1980s, problems arose as a result of AIDS contamination in the blood supply used to produce blood-clotting factors. In 1984 manufacturers began using a heat treatment process to guard against future contamination, but, according to a report in the Wall Street Journal, approximately half of the nation's 20,000 hemophiliacs contracted AIDS, primarily through the use of Factors VIII and IX.

The earliest FDA approval for a modern biotech product designed for human therapeutic use was given to human insulin in 1982. Human insulin was used for treating patients with diabetes. Other product approvals followed in subsequent years. In 1984 the FDA approved an agricultural vaccine against colibacillosis (a disease commonly called scours, which causes diarrhea or dysentery in...

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