The pharmaceutical industry has always prided itself on its record of innovation and there have been numerous examples of medicines that fully support that claim. At the same time, there have been many incremental advances which have also been touted as examples of innovation. However, as the power of payers has grown around the world, it is the customer that decides which medicines are innovations and which of these they are willing to pay for.
As a result, it is very difficult to get a decent price and return on drugs that offer an advantage over off-patent alternatives. Many companies are therefore focusing on areas of unmet need, such as rare diseases or oncology. This has led to the launch of a new generation of breakthrough science brands with the potential to revolutionise the life expectancy and/or quality of life of the patients they serve. It is these brands that define what is meant by innovation today. This said, the cost of these innovations remains a challenge.
Many of these breakthroughs target small or very small patient populations and consequently the price per patient per annum can be very high. As the number of such innovations increase, they present a problem for payers and put increasing pressure on the industry to produce new drugs for far less than the recently quoted $1.4billion per innovation. Breakthroughs are needed not only in the medicines themselves but in the R&D process that produces them!