Last year was a great year for Big Pharma. The U.S. Food and Drug Administration (FDA) approved the highest number of drugs in 18 years, and Big Pharma investors are rejoicing and looking forward to more profits.
A number of pharmaceutical giants saw profits plummet in the past couple of years when several popular brand-name drugs lost patent protections and lower-cost generics hit the market. With 41 new medications approved in 2014 – the second largest number on record since 53 approvals in 1996 – the industry envisions a hike in revenue. In 2013, only 27 new drugs received the FDA’s OK.
The FDA was not alone. Approvals were up in Europe, too, where the European Medicines Agency (EMA) recommended 82 new medicines.
The drug-approval winner was AstraZeneca, which pushed through four of its new drugs onto the market. Next came Biogen Idec, Lilly and Merck & Co., each with three approvals. The largest number of drugs approved (12) was for infectious diseases, followed by new cancer therapies (eight).
According to the FDA, its Center for Drug Evaluation and Research (CDER) division used a number of speedy approval programs at its disposal to push drugs through faster, including: fast track, priority review, accelerated approval and the new breakthrough therapy designation.
Last year’s approvals included a record number 15 rare-disease drugs. Experts say this reflects a trend in drug development where companies are focusing on specialty medicines that can cost more than $100,000 per patient and competition is light.
New Drugs ‘Offer Significant Clinical Value’
It’s not just drug companies that are poised to benefit. The FDA said patients can expect to have more access to better treatments. With new medicines for diseases such as diabetes, cancer, COPD and hepatitis C, patients may have a wider selection of therapies.
“What really matters is that many of these new products offer significant clinical value to the care of thousands of patients with serious and life-threatening diseases,” FDA Commissioner Dr. Margaret A. Hamburg said on the agency’s blog.
2014 was also the year for so-called “breakthrough” drugs. About 15 percent of the class of 2014 is made up of first-in-class therapies – meaning they are the first of that type of treatment. About half of the drugs approved are also for rare diseases, orphan drugs that treat illnesses that affect 200,000 people or less, and the FDA said these drugs will have a “strong clinical impact.”
Innovation Comes with a Big Price Tag
While innovation was name of the game last year, Big Pharma is mostly quiet about what patients will have to pay for some of these new medicines.
Innovative cancer drugs that help the body’s own immune system fight tumors promise better treatment with fewer side effects but could cripple the average American financially, and the same goes for new hepatitis C drugs. Experts say new cancer treatments should bring in $6 billion.
For example, Keytruda, Merck’s new melanoma drug, comes with a price tag of $150,000 a year — or 12,500 a month. The most expensive cancer drug created to date is Amgen’s leukemia drug Blincyto, also approved last year. It costs $178,000 per patient.
The two drugs highlight the new trend towards increasingly expensive cancer drugs.
Gilead’s new hepatitis C medication, Harvoni, costs $1,125 a pill and the total cost for the full 12-week treatment regimen is $94,500. Most patients may only be able to take the drug for eight weeks — for $63,000 — depending on what insurance carriers will shoulder.
Drug pricing is usually contentious between insurers and Big Pharma, with insurers trying to drive down the cost of drugs.
“They are not prepared to cover the cost even at $63,000,” Dr. Steven Miller told The New York Times. “Their budgets just are not going to be able to tolerate it.” Miller is the chief medical officer of Express Scripts, the largest manager of prescription drug plans for U.S. employers.
Gilead defends the price of its drug.
In a statement to the paper, it said, “We believe the price of Harvoni reflects the value of the medicine.”