Global drug development: Asia on the rise

According to the recently released "2020 CMR Drug Development Assessment Report" by the Center for International Drug Research and Development (CMR), a division of CredoVian, old-fashioned portfolio strategies for pharmaceutical companies and the rise of China as a result of the shift to innovative drug development have become two major characteristics of the biopharmaceutical industry. According to the report, the U.S. still tops the list in terms of the number of global first-to-market new drugs, with "more than half" of the world's new drugs coming to market in 2019, but the growth rate of global first-to-market new drugs in China is impressive. While these products may have been developed exclusively for the Chinese market by a consortium of companies, or by companies that have no plans to break into the international market, they are indicative of a shift in the Chinese drug market," the report said. "For a long time, China's pharmaceutical industry has relied heavily on generics and has been dominated by state-owned enterprises, but the reforms now underway are part of a long-term investment plan by the Chinese government to improve health care for its citizens, with the aim of encouraging more innovative research." The report notes that while marketed products have generated only 11 percent of total pharmaceutical industry sales over the past five years, a large biopharmaceutical company can achieve an average of 43 percent of its total sales from just three products.


This should worry the giant pharma companies because it requires them to accelerate innovation and to partner with these innovative companies," said Teresa M. Fishburne, head of CMR.


Fishburne found that many drug companies are more focused on expanding their existing products, a strategy that has continued in recent years. That reliance may ultimately prove to be a dead end, as drugmakers debate whether they should "license in" or "license out," instead of finding more innovative products for the pipeline.


"They're asking, 'Why should I innovate if I already have this pipeline expansion, and I'm also developing new indications, such as for Pemetrexed? Why become an innovative company?'" Fishburne says, "In some cases, you can't discover a new drug like Pymumab without pipeline expansion." Many companies are relying on pipeline expansion because they don't want to lose the exclusive exclusivity they have over a marketed product, "but that's not innovating."


For the first time in nearly four years, the pace of new molecular entity (NME) launches has slowed, indicating a 22% decrease in the number of NME launches since 2018. However, unlike the US, China and Japan have both seen an 11% increase in the number of NME listings over the past three years. U.S. companies have been adjusting their R&D strategies to develop new indications for drugs already on the market, thus reducing the number of NME listings in the United States. The report notes that as the pharmaceutical industry continues to rely on an obsolete product portfolio for sales revenue, it is precisely the smaller niche pharmaceutical companies that are focusing on innovation and are developing new therapies that are segmented and highly selective for their target patient populations. However, if these companies bring such drugs to market, they will also encounter the same problems that larger companies face, namely market access and health insurance reimbursement issues, as well as intense competition among competitors for mergers and acquisitions. While the drug development cycle has shortened further since 2013, the report shows that R&D spending has shrunk for the first time since 2016 as R&D output has increased. The R&D cycle has shortened from an average of 14.5 years in 2010 to 10.2 years in 2019. Pharmaceutical and biotech companies will continue to focus on those segments with the potential to shorten the R&D cycle (e.g., subject recruitment) to optimize their R&D strategies.


The assessment shows that total global R&D spending is expected to reach $80 billion in 2022, compared to more than $86 billion in that year based on past projections. The report identifies the covide-19 epidemic as a factor affecting drug development and hindering innovation.