Market Research & Insights

New report shows the cost to bring a drug to market has decreased to under $2B

Health Industry Hub | November 20, 2019 |
[Total: 1    Average: 4/5]

Insights from a comprehensive Clarivate report shows there are two main factors in the pharmaceutical industry that are causing the increase in drug approvals and subsequently the decrease in cost per new molecular entity (NME).

The first is an increased focus on rare diseases. Of the 57 NMEs launched in 2018, 22 had an orphan drug designation, indicating that they targeted a rare disease.

The second contributing factor is increased activity from smaller pharmaceutical companies. In 2018, 74% of drug launches were developed by companies with an R&D spend of $700 million to $2 billion, which is almost double the contribution this group made in 2009. Major pharma companies (R&D spend of greater than $2 billion) accounted for just 26% of drug launches.

The report reveals that while the number of drug approvals is up, the estimated sales per approval is on the decline. The average peak sales per asset almost halved between 2015 and 2018. This indicates older and legacy products continue to make up the vast majority of global sales, accounting for more than 85% worldwide. Additionally, these new drug approvals continue to target smaller patient populations. Between 2010 and 2018, the number of addressable patients per drug approval decreased by 15%.

The report also provides insights into pharmaceutical companies’ investment strategies, where external innovation plays a key role. In the first half of 2019 alone, global spend for pharma M&A and licensing activities was nearly $140 billion. This outpaced projected 2019 R&D spend by more than 60%.

“It is extremely encouraging to see the increase in new drug approvals driven by smaller pharma companies. This suggests size is no longer a prerequisite to bring a drug to market and R&D programs are becoming more efficient,” said Mukhtar Ahmed, President, Science Group, Clarivate Analytics. “What is concerning, however, is that forecasted sales per approval are declining. Even though the overall volume of new approvals is healthy, this raises questions about long term sustainability, particularly for large pharma.”

He continued, “Given the cost and risk associated with the drug development process, it is essential for researchers and decision makers to have access to accurate, comprehensive information and historical insights. This allows R&D investments to be allocated to the most promising areas of discovery and development and enables companies to better accelerate innovation.”

The 2019 Centre for Medicines Research (CMR) International Pharmaceutical R&D Factbook report was developed by Clarivate Analytics

Register FREE to receive the latest news, innovations and insights from Health Industry Hub; the only one-stop-hub connecting Australia’s Pharma, MedTech and Biotech industry professionals and its key stakeholders.

About the author

About the author

Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam luctus finibus scelerisque. Nunc bibendum ipsum sed augue fringilla fringilla. Nullam at consectetur leo. Praesent viverra rutrum porta. Quisque vitae mi vel purus vulputate tincidunt. Class aptent taciti sociosqu ad litora torquent per conubia nostra, per inceptos himenaeos. Suspendisse et mi quis nisi rhoncus feugiat at ac tellus. Sed aliquam sodales nulla ac auctor. Sed pretium lobortis purus accumsan ullamcorper. Phasellus sodales vel odio in lobortis. Duis maximus sagittis bibendum. Interdum et malesuada fames ac ante ipsum primis in faucibus. Nunc dictum tincidunt ipsum in vestibulum. Donec ut sem consectetur, aliquam quam vitae, pharetra orci. Nam egestas non velit eu rhoncus. Duis congue neque non lacus tincidunt porta. Vestibulum ultricies pulvinar sem, molestie congue dui aliquet non.
  • Ut imperdiet leo id lorem fermentum consectetur.
  • Ut vitae orci et dui varius tincidunt.
  • Ut id magna non libero vestibulum pharetra ac faucibus nulla.
Aliquam erat volutpat. Vestibulum vitae varius diam. Nulla eget congue ante. Nunc ullamcorper sagittis augue vel dictum. Mauris finibus nibh ut pulvinar auctor. Vestibulum ut faucibus nisi. Orci varius natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Quisque porta tortor ac justo malesuada elementum. Nulla tellus ante, cursus nec ex sit amet, suscipit bibendum arcu. Duis posuere orci dui, et mollis enim dictum at. Sed ullamcorper, sapien ut vulputate viverra, sem purus porttitor tellus, nec mattis mauris ligula sed risus. Nulla sagittis id ipsum eu mattis. Link to full profile

Human Resources

Human Resource Management - MSD revealed as finalist in Australian HR Awards

MSD revealed as finalist in Australian HR Awards

Health Industry Hub | July 13, 2020 |

The Australian HR Awards celebrates the outstanding achievements of the country’s top Human Resources leaders, companies and teams. MSD reveals […]


News & Trends - Medical Technology

MedTech News - Radiologists report a significant drop in diagnostic imaging services during COVID-19

Radiologists report a significant drop in diagnostic imaging during COVID-19

Health Industry Hub | July 13, 2020 |

MedTech News: Clinical radiologists are concerned that patients are delaying their required imaging procedures and encourage people to continue their […]



Medical Pharma Biotech MedTech - First-of-its-kind liver cancer research

First-of-its-kind liver cancer research

Health Industry Hub | July 13, 2020 |

Medical News: Primary liver cancer patients will benefit from a new research project in Western Australia that will apply the […]


News & Trends - Biotechnology

Biotech News - Australian researchers' cancer vaccine shows early promise

Australian researchers’ cancer vaccine shows early promise

Health Industry Hub | July 13, 2020 |

Biotech News: Mater University of Queensland Researchers have achieved publication in the highly-ranked journal, Clinical and Translational Immunology detailing their […]