By Ana Nicholls, Healthcare Analyst at the Economist Intelligence Unit.
The UK Financial Times this week (March 18) flagged up data from Withers & Rogers, a London-based IP firm, showing how the numbers of patent filings from the ten leading pharma companies has dropped in recent years. According to the law firm, only 129 “patent families” of drugs in leading markets were sought by the top 10 drug companies in 2009, down from 189 in 2007. Though the numbers provide what the FT calls an “imperfect snapshot” of what is going on in the industry, they once again suggest that pharma companies are finding it hard to convert their R&D spending into experimental drugs.
Combined with other reports suggesting that regulatory approval has also become harder to obtain, the upshot is that Big Pharma is struggling to refill drug pipelines as their older products come off patent. The industry’s response has been to focus its research spending on fewer disease areas and shift some of the work to emerging markets (laying off thousands of staff in the process). There has also been a rush to buy up biotech companies. Indeed, Withers & Rogers’ numbers confirm how crucial biotech research had already become for Big Pharma by 2009, the year that Roche of Switzerland paid US$47bn for the remaining 44% of biotech company Genzyme. Biological drugs accounted for 60% of 2009’s filings, and for over 80% at Abbott Labs.
But even this route may soon become more difficult. Two bills currently being considered in the US Congress — dubbed FAST and TREAT — aim to make it easier to gain approval for biotech drugs. On the face of it, this seems like a good thing for the industry, and for patients. But by making it cheaper for biotech companies to develop their own products without backing from a wealthy pharma company, they may make acquisitions harder come by, as well as leading to stiffer competition in the market.
Also notable from the Withers & Rogers numbers is the strong showing of Switzerland’s Novartis. Despite its recent decision to close one of its Basel labs and shift work to Asia, the company remains one of the most committed to the R&D model. It was the top spender in 2011, having upped its R&D by over 18% in dollar terms on 2010 (see chart below). And perhaps as a result, it is generally considered to have a stronger pipeline than most of its rivals.
But even Novartis has suffered a number of R&D setbacks. In December 2011, for example, it had to halt clinical trials into wider uses of its hypertension drug Tekturna/Rasilez, because some patients were suffering complications.
Such experiences show that there is plenty of room for slippage between a patent filing and a drug approval, even for those companies that are still able to generate innovations.