Insights from Changing Landscape in New Product Development and Approvals in Pharmaceutical Industry: Recent Trends for Betterment of Humanity

Abstract

A drug approved today is the result of an idea generated 10-15 years back, which has now succeeded. It takes several years and huge resources to gain approval from the regulatory agencies, and bring a new medicine to the marketplace for the patients, by pharmaceutical companies engaged in new drug discovery and development. The purpose of this paper is to understand the strategic planning, therapeutic area focus and product selection being followed by the pharmaceutical companies while developing innovative products. This research sampled 210 new drug approvals granted by the USFDA over the 5 year period from 2014-2018, to study the type of drug (small molecules versus biologics versus peptides) getting approvals, contribution of in-house discovered products versus in-licensed products, approvals received by big pharmaceutical companies versus smaller biotech companies, and drug approvals by various therapeutic areas. This study found that in-licensed drug candidates (molecules) formed an important component of new drug approvals as a total of 65 new drug approvals originated from licensing activities. Further, it was observed that even though large pharma companies accounted for a total of 153 new drug approvals, smaller biotech companies also rallied in with 57 new drug approvals pointing out to a changing landscape in drug development. This study analyzed the new drug approvals pursued by pharmaceutical and biotech companies in different therapeutic areas for the betterment of humanity, and found that oncology (cancer) therapeutic area had 63 new drug approvals, followed closely by 36 new approvals in the infectious disease space. The contributions made through this study on new product development and approvals would be useful for management of research and development of innovative products, licensing strategy and portfolio planning in the pharmaceutical industry.

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Keywords: Product development, Drug development, USFDA, New drug approvals

JEL Classification: F18, F23, I11, M16, O03, O033, O034