Where Drugs Come From

The US biotech industry, disproportionately:

In case you're wondering, the league tables look like this: the US leads in the discovery of approved drugs, by a wide margin (118 out of the 252 drugs). Then Japan, the UK and Germany are about equal, in the low 20s each. Switzerland is in next at 13, France at 12, and then the rest of Europe put together adds up to 29. Canada and Australia put together add up to nearly 7, and the entire rest of the world (including China and India) is about 6.5, with most of that being Israel. But while the US may be producing the number of drugs you'd expect, a closer look shows that it's still a real outlier in several respects. The biggest one, to my mind, comes when you use that criterion for innovative structures or mechanisms versus extensions of what's already been worked on, as mentioned in the last post. Looking at it that way, almost all the major drug-discovering countries in the world were tilted towards less innovative medicines. The only exceptions are Switzerland, Canada and Australia, and (very much so) the US. The UK comes close, running nearly 50/50. Germany and Japan, though, especially stand out as the kings of follow-ons and me-toos, and the combined rest-of-Europe category is nearly as unbalanced. What about that unmet-medical-need categorization? Looking at which drugs were submitted here in the US for priority review by the FDA (the proxy used across this whole analysis), again, the US-based drugs are outliers, with more priority reviews than not. Only in the smaller contributions from Australia and Canada do you see that, although Switzerland is nearly even. But in both these breakdowns (structure/mechanism and medical need) it's the biotech companies that appear to have taken the lead. And here's the last outlier that appears to tie all these together: in almost every country that discovered new drugs during that ten-year period, the great majority came from pharma companies. The only exception is the US: 60% of our drugs have the fingerprints of biotech companies on them, either alone or from university-derived drug candidates. In very few other countries do biotech-derived drugs make much of a showing at all. These trends show up in sales as well. Only in the US, UK, Switzerland, and Australia did the per-year-sales of novel therapies exceed the sales of the follow-ons. Germany and Japan tend to discover drugs with higher sales than average, but (as mentioned above) these are almost entirely followers of some sort. Taken together, it appears that the US biotech industry has been the main driver of innovative drugs over the past ten years. I don't want to belittle the follow-on compounds, because they are useful. (As pointed out here before, it's hard for one of those compounds to be successful unless it really represents some sort of improvement over what's already available). At the same time, though, we can't run the whole industry by making better and better versions of what we already know.

This doesn't mean that pharma, or universities, or the NIH, or foreign drugmakers, don't play an important role in the process. NIH-funded research provides targets; pharma helps ensure that biotechs have capital. (One of the primary profit routes for biotech investors is a sale of either a compound or a company to Big Pharma, which has the regulatory expertise, the distribution channels, and other things that make the compound more valuable). And so on down the line. But in terms of actually delivering the novel compounds, the US biotech industry seems to be an incredible driver of health care innovation.