The pharmaceutical industry's recent emphasis on quality over quantity is working, as evidenced by a lower number of early-phase projects and fewer Phase III projects being terminated, combined with an increase in regulatory approvals, says a new report.
The industry's focus on drug production quality is evidenced by the fact that global pharmaceutical sales reached their highest level ever last year, at around $880 billion, according to Thomson Reuters' latest annual Pharmaceutical R&D Factbook. Moreover, in 2011, drugmakers were reinvesting anywhere from 2% to 25% of sales in prescription drug R&D, although the rate of growth is declining as key drugs come off patent and the generic market grows, says the report, which is released by Thomson Reuter's intellectual property and science division and compiled by the firm's CMR International business.
The number of new molecular entities (NMEs) launched has also reached a 10-year high, totalling 31 last year, the report goes on. Regulators and payers are looking for safer, more effective and differentiated drugs, given the large influx of generics, and the industry is seeing the first signs of its response to increased R&D hurdles by selecting drug candidates that are focused on diseases with high unmet medical need and, in many cases, personalised medicine, ie, targeted at stratified groups of patients.
This refocus is welcomed by regulators and payers, as reflected by the increased number of drug launches, says the Factbook, which goes on to note other benefits being drawn from the industry's focus on quality, including:
- cancer treatment is benefitting from advances in personalised medicine. Anti-cancer drug development continues to attract the highest amount of investment across all therapeutic areas, and recent personalised medicine advances yielded two important oncology drug approvals in 2011, with companion diagnostics for targeted patient populations;
- a marked turn in Phase III success rates over the last three years; and
- more targeted therapies, with increased numbers of biologics in R&D having higher clinical success rates and slower decline from peak sales, as well as an improvement in translating innovations in biological understanding from lab to patient.
Commenting on the 1012 Factbook's findings, Ana Nicholls, healthcare analyst at the Economist Intelligence Unit, points out that the improvement in drug launches, and the drop in Phase III terminations, suggest that pharmaceutical companies' efforts to focus research funding only on the most promising area are paying dividends.
It is particularly encouraging that launches seem to have moved away from "me-too" drugs - which offer only small benefits over those on the market, and towards more ground-breaking drugs, she goes on.
"One reason may be better cooperation between regulators, healthcare payers and pharma companies, which means that pharma companies now have a clearer idea of real unmet needs and waste fewer resources on drugs that, even if they get approval, are less likely to be recommended for reimbursement," Ms Nicholls suggests.
Nevertheless, she adds: "the era of mass-market blockbuster drugs is largely over, which makes replacing lost patented drug revenues an uphill task."