Once again, the biopharmaceutical industry had another banner year in 2015. The FDA approved 45 new medicines last year, the most since 1996 when 53 new medical entities were given the green light. But, in comparing the approvals of 1996 to 2015, a lot has changed over the years. For one thing, the vast majority of drugs approved in 1996 were small molecule drugs, including one of the biggest-selling drugs of all time, Lipitor (atorvastatin). It is fascinating to note that only two biologicals appeared in 1996, the insulin analog, Humalog, and Avonex (interferon beta-1a). Furthermore, like Lipitor, most if not all of the drugs in the class of ’96 are now generic. It’s often good to keep that in mind as we review the class of ’15 as all new drugs have a finite life as a patented product for its manufacturer.
The drug approvals for 1996 are a reflection of the corporate strategy and the research philosophy embraced by Big Pharma at the time: find drugs that would be utilized by physicians to treat millions of patients suffering from common ailments such as cardiovascular disease (statins and antihypertensives), infectious disease (antibacterials and fungals), diabetes, pain, and CNS disorders (antidepressants and antipsychotics). The “blockbuster” business model back then focused on having moderately priced drugs broadly prescribed. Even the cancer drugs approved in 1996, like Camptosar, tended to be cytotoxic agents that were used to fight a variety of cancers.
Companies have not totally abandoned this approach. Last year saw the approval of drugs expected to be billion dollar blockbusters by virtue of treating big populations of patients with heart disease (Entresto,
Another big difference from 1996 is the continued growth of drugs to treat rare diseases. Six of these were approved in 2015. The use of the term “rare disease” can be relative. While Vertex’s Okambi is designed to treat roughly 8,500 cystic fibrosis patients with a specific gene mutation, Alexion’s Kanuma was approved for the treatment of lysosomal acid lipase deficiency–for which only TWENTY new patients will be diagnosed this year. One can only imagine what the price for the latter will be to meet Alexion’s very high sales projections.
Another amazing difference between 1996 and 2015 is the change in pricing for LDL-cholesterol lowering drugs. At a time when generic atorvastatin (the active ingredient of Lipitor) can be had for pennies a day, the breakthrough new LDL-cholesterol lowering drugs, PCSK-9 inhibitors Repatha (
If I had walked into a Pfizer R&D review meeting in the 1990s with a research portfolio based on producing drug candidates whose success depended on this type of pricing, I would have been escorted out of the room. It would have been preposterous to propose discovering a new drug that would benefit a mere 20 patients per year. But things are a lot different now. There are tremendous incentives to discover drugs that treat rare diseases or that can be used to target specific cancers. The patient populations are clearly defined, patient advocacy groups for the disease provide support, and the medical need is easily justified. In addition, the clinical trials needed for FDA approval can be very small, with 200 patients or less. That’s a far cry from running an outcomes study for a new cardiovascular drug that requires studying 25,000 patients on a drug for 4 years. But make no mistake–the key driver for pursuing such programs is the promise of a high return of investment based on the pricing that is available for a truly effective drug in these small patient populations.
It is no surprise that these highly priced new drugs are generating a great deal of concern, particularly on the part of payers. A recent article in the New England Journal of Medicine entitled “Measuring the Value of Prescription Drugs” provided an interesting perspective on this shift in R&D priorities and the high cost of new medicines:
Anger over rising drug prices may be understandable, but it has led observers to call for setting prices to reflect research, development, and production costs for drug firms, a strategy we feel is misguided. By instead focusing on a drug’s benefits, value-based approaches can encourage firms to produce more of what people want–products that improve health–and thereby further stimulate innovation.
I suspect that, for those who suffer from rare diseases or from certain forms of cancer, this shift in biopharma’s R&D priorities has been welcomed. As shown by the 2015 drug approvals, the promise of favorable pricing did stimulate innovation and improved the health of many. It will be interesting to see if political pressures, particularly in an election year in the U.S., impact this going forward.
(The author is the former head of Pfizer R&D.)
