The last couple of years have been very good for the number of drug approvals, reversing a rather worrying trend. But are these data points themselves enough to qualify as a reversal? That’s what John Carroll is asking here, pointing out that even the traditional end-of-the-year flurry of approvals doesn’t look likely to rescue the numbers for 2016. (Does anything, in general, look like it’s going to rescue 2016 on any front? Just a thought.) John LaMattina is a bit less pessimistic, but it does look as if 2014/15 will be a sort of outlying burst of activity.
To the question of where this productivity is coming from, I can recommend this article by Bruce Booth. He’s gone back and looked at the 170 approvals of new drugs since 2011 (imaging agents and fixed combinations are excluded from that total). What he finds is that only 35% of these originated with the top 25 drug companies (although most of these end up marketed by them). Looking at the origins of the companies, about 46% of the approvals originate at “traditional” pharma companies (of whatever size), about 25% come from 1980s and 1990s VC-backed startups, and 29% from post-2001 VC-backed companies, which seems like a pretty respectable total.
The general run of the business these days, then, can probably be summed up this way: the large companies develop internal programs of their own – no one has yet made a success of the oft-speculated “virtual research” insourcing shop on any kind of large scale. But they don’t generate enough new drugs to fill out their own portfolios; every large company is interesting in acquisitions or inlicensing to fill out its roster. Meanwhile, smaller companies are (frantically) developing their own drugs, too, but if it looks like something is going to be a huge success, they generally will have to partner with a larger company or be bought by one outright. A lot of these big markets are too big for a smaller company to make the most of, in both clinical development and marketing/regulatory terms.
But this is the way it’s been for a long time. I don’t recall a time when the large players didn’t bring in drugs and drug programs from outside, and I don’t recall the small ones ever (for the most part) being able to completely capitalize on huge opportunities all by themselves. One thing that did change since 1990 was the consolidation in the ranks of the large companies (as Pfizer bought up everyone, although there were other offenders). In the end, though, these mergers don’t seem to have produced much of a change in the way the industry works, because the statements I made above would have applied equally well in 1990 as they do today.
What all the big mergers did do, unfortunately, was narrow the ecosystem down at that level – the big companies are still buying programs and companies to fill out their rosters, but there are just fewer big companies around in general to do that. And the big merger era also demonstrated that you can’t merge and expand your way into some sort of critical-mass pharma nirvana, either, where you finally have so much scientific talent and so much marketing and so big a portfolio that nothing can ever slow you down. Doesn’t happen. Your problems scale with you, and some of them get worse.