There’s a data-rich paper out in Nature Reviews Drug Discovery on the history of drug innovation in the industry. I’ll get to its real conclusions in another upcoming post, but some of the underlying data are worth a post of their own.
The author (Bernard Munos of Lilly) looks at new drug approvals (NMEs) since 1950, and finds:
At present, there are more than 4,300 companies that are engaged in drug innovation, yet only 261 organizations (6%) have registered at least one NME since 1950. Of these, only 32 (12%) have been in existence for the entire 59-year period. The remaining 229 (88%) organizations have failed, merged, been acquired, or were created by such M&A deals, resulting in substantial turnover in the industry. . .Of the 261 organizations, only 105 exist today, whereas 137 have disappeared through M&A and 19 were liquidated.
At the high end of the innovation scale, 21 companies have produced half of all the NMEs that have been approved since 1950, but half of these companies no longer exist. . .Merck has been the most productive firm, with 56 approvals, closely followed by Lilly and Roche, with 51 and 50 approvals, respectively. Given that many large pharmaceutical companies estimate they need to produce an average of 2–3 NMEs per year to meet their growth objectives, the fact that none of them has ever approached this level of output is concerning.
Indeed it is – either those growth targets are unrealistic, or the number of new drugs thought to be needed to support them has been overestimated, or we’re all in some trouble. Speculation welcomed – I lean toward the growth targets being hyped up to please investors, but I’m willing to be persuaded.
And the fact that most of the new drugs come from a much smaller list of companies should be no surprise – that looks like a perfect example of a power law (aka “long tail”) effect. Given the way research works, I’d actually be surprised if it were any other way.Now about that figure of 4,300 companies, though: what could possibly be on it? All sorts of startups that I’ve never heard of, of course – but how can that account for such a large number?
It appears to come from this PDF, where it appears on slide 114 (whew). There’s no listing, just a breakdown of 1450 companies in the US, 450 in Canada, 1600 in Europe, and 740 in the Asia/Pacific region. Anyone want to hazard any guesses about how real those numbers are?