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 After suffering a wave of patent losses on blockbuster products,
which peaked two years ago, drugmakers are recovering their ability
to bring new medicines to market and productivity is improving.
The U.S. Food and Drug Administration's Center for Drug Evaluation
and Research approved 41 novel medicines in 2014, 14 more than a
year earlier, according to its website. That tally is second only to
the all-time high of 53 approvals reached in 1996.
The European Medicines Agency, which includes generic drugs in its
list, recommended 82 new medicines last year, up from 79 in 2013 and
57 in 2012.
Innovative new drugs have continued to command premium prices, to
the relief of investors but the frustration of insurers and
governments, which are starting to push back against the sky-high
cost of some modern therapies.
Nearly 40 percent of new drugs approved in the United States last
year were for rare diseases, underscoring the industry's focus on
specialized products where competition is limited and annual costs
often exceed $100,000 per patient.
Among 2014's highlights were two cancer drugs that help the body's
own immune cells fight tumors and promise better, longer-lasting
treatment with fewer adverse side effects.
Merck & Co's Keytruda and Bristol-Myers Squibb's Opdivo, which work
by blocking a protein called Programmed Death receptor (PD-1), are
the first in a coming wave of immunotherapies that analysts believe
could generate annual sales of more than $30 billion a year.
Fueled by new drug enthusiasm, biotech initial public offerings hit
a record high in 2014 and the wider drug industry saw a flood of
deals.
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That helped lift the Nasdaq Biotechnology Index and S&P 500 Health
Care Index 34 percent and 23 percent respectively, though some fund
managers are starting to question valuations as insurers take a
tougher stance on prices.
Pricing pressures have already taken a toll on older products like
diabetes and respiratory medicines, where there are multiple options
available, and the confrontation is now spreading to newer ones.
Express Scripts, the largest manager of prescription drug plans for
U.S. employers, shocked the industry last month by lining up a lower
price for AbbVie's new hepatitis C treatment, adding to strains
between drugmakers and insurers over rising costs.
(Editing by Susan Thomas)
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