BIOPHARMACEUTICALS TODAY Before presenting survey results, which predict the future, we will assess the present state of biopharmaceutical development. Thirteen of the 67 blockbuster drugs with annual sales over $1 billion are biopharmaceuticals.1 The growth in biopharmaceutical revenues has been running at over 20 percent compound annual growth between 1998 and 2003.2 This is significantly ahead of the rate for traditional pharmaceuticals. On a recent list of 100 great new investigational drugs, 30 molecules can be classed as of the biotech variety.3 Investors are increasingly wary, particularly in Europe, having seen miserable returns on investment. Money is hard to come by for small speculative biotechs. The expected surge in new biotech medicines as a result of mapping the Human Genome has not yet materialized. In 2003, only 19 of the top 100 worldwide biopharmaceutical companies turned a profit.4 In short, biotech companies are under pressure from investors to deliver on the bottom line — sooner — not later.
Introducing tests that significantly reduce the target patient population for a medicine obviously implies a small patient market, and therefore either smaller revenues for pharmaceutical companies or major drug price increases. If the current market for a treatment, for example asthma, were split into ten component parts — each one addressed by a different new drug — then industry would have to develop ten new medicines instead of one for the same number of asthma sufferers. In the age of the blockbuster, when massive sales are required to cover the costs of R&D failures, it looks like a big negative.
One recent estimate of the average cost of bringing a new molecular entity to the pharmaceutical market is $802 million5 and projected to be growing year by year at more than seven percent. These controversial findings triggered an independent study in 2004 by the US Federal Trade Commission.6 Adams and Brantner reported that there was a higher average cost of $839-868 million.6 Admittedly, the cost varied from indication to indication (HIV-AIDS drug, $470 million, rheumatoid arthritis, $936 million) and from company to company, ranging between $521 million and $2.119 billion per drug.) One fact is inescapable, the numbers are large. If costs keep rising, the possibilities for better-targeted medicines aimed at smaller patient groups seem lower and lower, excepting perhaps a few niche indications.