It seems as though something is always happening in the pharmaceutical industry. Recent years have been no exception.
Gone are the days of blockbuster drugs and the ability of the biggest drug companies to hold exclusive rights to many of the most popular prescription pharmaceuticals. Thanks to the Internet, today’s drug consumers have access to more information about drug pricing and alternatives. And competition between drug companies is dissolving as they realize they have more to gain working together than against each other.
The End of Blockbusters
If the first decade of the 21st Century was all about big drug companies discovering some new miracle drug and aggressively promoting it until it became a game-changing blockbuster, this decade so far has been more of a readjustment to changing market forces.
As recently as 2012, the Food and Drug Administration approved 39 new molecular entities, but that number shrunk to only 27 in 2013 and continues to decline. And among the 27 new drugs approved, many were for uncommon medical conditions and obscure diseases, yet another indication that the era of the “blockbuster drug” has finally come to an end.
In light of this, some pharmaceutical manufacturers are reconfiguring their factories and restructuring their organization charts to accommodate the production of multiple products at the same time, rather than just one sales leader. Big Pharma companies today desire the ability to launch a half dozen or a dozen new products per year rather than betting everything on a single superstar drug to carry them to success.
Who drug companies are marketing their products to also is changing. Countries whose economies are rapidly growing are now getting more attention from drug producers, rather than the traditional global powerhouses. And in an industry that spends an estimated $160 billion per year on marketing, the amount spent in these emerging economies will be significant.
Growth of Generics
Earlier this decade, many pharmaceutical companies lost their exclusive rights to many of their most popular – and most profitable – products.
Since then, the industry has adjusted by looking for more creative ways to grow — or at least maintain profits — such as conducting research and development into new drugs for medical needs that are as yet unmet, buying up bio-tech companies or taking leases on their best drug candidates, and dropping in-house R&D altogether and outsourcing it in order to reduce costs and accelerate new product development.
Combined with more freedom for consumers to learn more about drug availabilities in other countries via the Internet, these trends have driven down prices of many drugs and heralded a new move towards generics.
Consumers today demand more for their money. Value has replaced recognizable brand names as the top consideration when choosing a drug. Most people are no longer willing to shell out big bucks for drugs that provide only marginal benefits to their medical conditions.
Recent years have witnessed emergence of resistance to azoles and other antifungal compounds so more and more biopharmaceutical companies are focusing their attention on creating enzymes that are expected to have greater selectivity, fewer side effects and improved potency compared to currently available antifungal agents.
Product candidates in preclinical development include those targeting the treatment of cryptococcal meningitis, which are targeted for the treatment of invasive fungal infections. Viamet Pharmaceuticals recently sourced financing to continue their research in this area from Brandon Point industries, and the joining of partner Adrian Howd to Viamet’s board to provide his expertise in antifungal compounds.
Dissolution of the Competitive Set
There’s also been a rise in the number of collaborative partnerships between formerly competing drug companies. Since pharmaceutical manufacturers are less reliant on a single blockbuster drug to set them apart from their competitors, there’s more of an incentive to work together in the development of new medications that treat various medical conditions.
That makes perfect sense in today’s prescription drug market, with its frequent mergers and acquisitions. Sharing information, research, and resources in the creation and roll-out of new medicines pulls up the entire industry. And sharing R&D and marketing reduces costs for both partners.
Finding the most effective and profitable ways to get new drugs onto the market has always been the best way to grow the drug business. Today, more often than not that means working hand in hand with other companies that formerly may have been sworn enemies.
Prevention over Treatment
Also continuing is the trend towards focusing on prevention rather than using drugs to treat health problems after they occur. This is being seen on both the macro and micro levels.
Both national governments and individual health care providers are getting into the prevention business, encouraging people to make wiser lifestyle choices, discouraging such behaviors as smoking, drinking, drug use and unsafe sexual practices, and rewarding people to making positive changes that improve their overall health.
Part of that has to do with the changing face of the pharmaceutical marketplace, as drug makers realize that there is more money in the long-term by keeping people alive longer than selling them short-term drugs that treat symptoms and cure various conditions. This has led the charge for new drugs that people can take for a lifetime, such as anti-depressants and mood stabilizers.
Trends for the Next Five Years
During the second half of this decade, you can expect the influence of the Internet to grow, especially as social media becomes more easily accessible via mobile devices and is used in more places around the globe. Pharmaceutical companies will likely expand their web presence so they can connect more easily with new customers, especially in emerging economies.
If there’s one thing that you can depend on in the pharmaceutical industry, it’s that it is always changing.