A new report suggests R&D productivity in the pharma industry is on the rise as drugmakers are becoming more effective at bringing projects into development – and killing them off quickly if they fail.
The Thomson Reuters annual CMR Factbook notes that 2014’s 46 new molecular entity approvals in the developed world – way ahead of any other year since 2005 – as well as the milestone of passing $1trn in sales is “challenge negative perceptions” about the industry.
The nature of the new product launches is also encouraging, says the report, with one-third for rare indications and two-thirds for specialty indications such as cancer, hepatitis C and ophthalmology.
This diversification of late-stage pipelines is the reason for the hike in NME launches and also shows that the research-focused pharma sector is increasingly focusing its attention on products that can command high prices in the market.
“Anti-cancer development continues to attract the highest amount of investments across all therapeutic areas, with the majority of recent launches receiving orphan drug status from regulatory authorities,” says Thomson Reuters.
Of course, that raises questions about how healthcare systems can foot the bill for these new drugs, given that some payers now pushing restricted formularies and pay-for-performance models amongst other methods to curb escalating drug spends.
Affordability aside, it is clear that the pharma industry is finally increasing the efficiency of its R&D processes, says the report.
“Across the industry there has been a decline in pipeline volumes in the early phases and a growth in the pipeline volumes in the late phases,” it notes. Meanwhile, the number of terminated compounds in phase III is down, suggesting companies are becoming better at spotting non-viable projects early on.
All this adds up to a healthy situation that will catapult sales to $1.3trn by 2018 – a 25% increase on the $1.04trn reported last year.