The commitment to innovation is the raison d’être of the pharmaceutical industry, whose greatest efforts and investments are dedicated to research and develop new medicines that improve the health and quality of life of people suffering from a health problem. This titanic task has achieved with its successes, and also with its failures, that medicine has experienced in recent decades an advance of such caliber that has allowed people today to live longer and better than ever, which constitutes one of the great landmarks of history.
But how much does that innovation process really cost and what obstacles do pharmaceutical laboratories find in this task?
It must be borne in mind first that from the time a company begins to investigate a molecule until it is sold on average between 10 and 12 years. In fact, only reaching the phase of clinical trials, that is, when the drug is tested in humans, is about four years in which you have to identify a promising compound and do the first tests, basically to check its safety. Less than 10% of those compounds that manage to reach the clinical trial phase become drugs available to doctors and patients. Of these, only three out of ten will generate revenues that exceed average R&D costs.
The international report of Deloitte consultancy “Ten years on. Measuring the return from pharmaceutical innovation 2019 ”. This consultant evaluates annually for ten years the performance of innovation in the biopharmaceutical sector from the evolution of the drug portfolio in its latest R&D phases of a group of twelve leading pharmaceutical companies worldwide. The study reveals that currently the expected return of the investment in R&D of new drugs for pharmaceutical laboratories stands at just 1.8%, the lowest historical record of the last decade. And he adds that this profitability accumulates a decrease of 8.3 percentage points since 2010, when the first study found a return of 10.1%.
Deloitte’s report also notes that maximum sales for new drugs that reach the market have dropped to 54% over the past decade, from $ 816 million in average maximum sales in 2010 to 376 million. in 2019. And, on the other hand, the average cost of developing and marketing a new drug has increased by about 70% since 2010, reaching 1,981 million dollars. This data represents an increase of 800 million dollars per drug since the launch of the first report, when it was 1,188 million dollars.
It should be clarified that the costs included in the Deloitte study refer to the twelve large companies that it includes, and therefore the difference over the figure calculated by the classic study by Joseph DiMasi, from Tufts University, which analyzes the whole of the research done by the pharmaceutical industry and that raises the average cost of developing a drug to 2.5 billion dollars.
«This increase (in the research cost of a new drug) is due to different factors, among them, without a doubt, the greater sophistication of the new drugs in search of greater efficacy in the objective pathologies, the progressive increase of biological drugs with a particular and more complex process of R&D and private production, as well as the greater regulatory requirement in terms of safety and efficacy of the new medicines that results in an increase in trials, tests and, in short, in the terms and costs of the research », says Jorge Bagán, responsible partner of the Life Science and Healthcare Industry of Deloitte.
Pedro Luis Sánchez, director of the Department of Pharmaceutical Studies, adds that “there are currently 7,000 drugs under investigation, but the probability that a drug that is in the first clinical phase of research will be marketed is only 9.6%. In 2010 this figure was 12%, which demonstrates the growing difficulties facing the industry during the entire process of research and development of medicines. ”
Towards a precision medicine
Sanchez also says that there are other reasons for this decrease in profitability that are linked to the evolution of traditional medicine to personalized medicine that is now a reality. “Many of the products that are sold today are no longer what was known as blockbuster, that is, they are not aimed at large populations, but are niche and go to few patients. This means that laboratories have to refine the efficiency of their R&D much more and therefore their chance of failure increases. ”
This reality, he says, causes a second reason for the decline in profitability, and that competition between pharmaceutical companies has intensified. “Before a molecule was long alone in the market, but now there are several non-generic molecules that compete for the same market. In addition, many of these drugs that are under investigation are aimed at the same pathologies and the same patients, that is, they are substitutes, so many of these drugs that go out or will go on the market will lose money. ”
In fact, Deloitte’s report points out that this precision medicine will be the undisputed protagonist in the immediate future. “In the last decade, the number of precision medicines marketed has grown by 50% on average annually and it is expected that in the next few years more than half of the drugs in development will respond to the concept of personalized medicine.”
The good news, says Pedro Luis Sánchez, is that this precision medicine, “although more expensive in its development for laboratories, will improve the effectiveness of the treatment, since it previously identifies patients who will respond adequately to each therapy, improving levels of effectiveness compared to conventional drugs, which are aimed at large and diverse populations. ”
Behind every drug that is marketed and improves everyone’s health, there is an expensive and lengthy process behind. In Distefar we are aware of this and we want to give visibility to this process.