Some details of 2012 FDA approvals

Very interesting numbers (from here). It looks like Big Pharma still has a lot of unsolved problems:

The most exciting news for the class of 2012 is that 17 drugs (46%) target novel modes of action. Most of the rest (17) aim at precedented targets, while 3 have unclear mechanisms. This is consistent with 2011 when 48% of approvals were first-in-class.

Only 13 drugs out of 37 (35%) were licensed to Big Pharma. This is consistent with data from the last 8 years when the share of Big Pharma has hovered between 25% and 40%.

Based on historical data, only about 4 or 5 of these 13 drugs will become blockbusters. The rest will peak on average at about $500 million. This is insufficient to support the sales of the top 13 pharma, which in 2011 where just short of $400 billion. Despite their chief executives’ best intentions, we can expect significant turbulence ahead.

The companies that need new drugs the most did not get them. Since 2005, Abbott, AstraZeneca and Lilly have collectively received 3 NME approvals (excluding imaging agents), a troublesome performance for companies that have historically made major contributions to innovation. By comparison, the top 3 companies, J&J, GSK, and Novartis received 31 approvals during the same period.

The top 13 pharma spend about $72 billion a year on R&D. This is too much for too little output. It lends credence to the CEOs who have argued that the return on pharma R&D is now globally negative, and it is a problem that must be fixed. 

 

However, there is little consensus on how to fix it. Some chief executives have argued for more IP, higher prices, and friendly policies, in other words more of the same, while others have set out to dismantle the regimented R&D culture that forced their creative scientists to do uncreative things. Perhaps the differences between these approaches have started to sort the winners from the losers.

 

The other question is that new drugs, even those that target new mechanisms, do not necessarily equate with superior outcomes. Some patients (and payers) have been grumbling about treatments that deliver “six months of misery” made more miserable by the price tags they carry. Innovation often gets better when the bar is higher. Perhaps the industry should pay more heed to Jim Watson’s admonitions: “our focus on mediocre drugs keeps us from developing good ones”…”FDA should not approve cancer drugs that provide less than a year of survival benefit”.

 

Yet, there is much to cheer about the class of 2012. It shows that innovation is resurging across the industry. The capabilities are there, and some leaders are figuring out ways to harness them. This suggests that perhaps there is no innovation crisis at all, only a leadership crisis. Innovation thrives where it is supported by enlightened leadership and shrivels otherwise. Let us hope that there won’t be shriveling in 2013.