The pharmaceutical industry cannot rely on increasing sales to drive its profits, a leading executive warned this week.
Speaking at the British Pharmaceutical Conference in Manchester, Brent Vose, vice president of Global Drug Development at AstraZeneca, said that the world financial situation makes it even more important to be smart about drug research.
“Over time sales have continued to go up in dollar terms. I have little doubt that that will not continue,” he said. “As GDP and tax revenues reduce, the pressures on healthcare budgets will increase.”
The financial crisis comes at a bad time for major pharmaceutical companies, which are also bracing for the patents on a number of big selling drugs to expire, opening them up to generic competition.
Speaking at another conference session, Steve Wicks, vice president of Worldwide Pharmaceutical Sciences at Pfizer, noted that it is normal for a drug to lose 60% of its market share in the first year of generic competition. Wicks cautions that new big sellers are not coming on to the market in time to fill the gaps from the big blockbusters about to lose their patents.
“We are beginning to move into the unsustainable cycle,” he said.
Although not new, the numbers in both men’s presentations are still eye-watering. Vose notes it costs nearly $900 million to bring one new drug to market; only 1 in 5,000 new compounds actually make it to market; and 80% of drugs that do make it to market don’t show a return on investment.
It’s not all bad news; Vose told the conference there are opportunities in unmet needs, in the world’s aging population, and in biologic products. Another vital arena is likely to be the developing world. “It is fantastically important for us to stop this UK-centric or Western-centric view of the world,” says Vose.
Innovation is key, he told the BPC, and trying to produce slightly different drugs with only a small advantage over existing products – so-called ‘me too’ drugs – is a dead strategy. “The day of the ‘me too’ is pretty uninteresting now,” he says.
In a similar vein, Wicks told the conference, “if we keep trying to resolve isomers and all the cynical stuff, we’re not [going to be sustainable].”