U.S. Pharma Industry Boasts 16 Year High in FDA Approvals

U.S. Pharma Industry Boasts 16 Year High in FDA Approvals

2012 was a healthy year for the U.S. pharmaceuticals industry, with 39 new drugs approved – the highest in 16 years.

This trend was largely driven by a string of recent patent expirations, with generic drug makers able to offer cheaper alternatives and major manufacturers forced to refill their product lines. Patent expirations peaked in 2012, costing big pharma companies and biotech companies upward of $21 billion in lost revenue.

Some of the drugs to have come off patent in 2012 included Plavix, a heart drug made by Sanofi and Bristol-Myers Squibb, and Seroquel, an antipsychotic made by AstraZeneca.
The 39 new drugs and biological products approved by the FDA in 2012 compares with 30 in 2011 and just 21 in 2010, suggesting that pharmaceutical makers are poised for growth. The pharma industry has not seen figures like that since 1996.

The end of year brought a flurry of new approvals, with 8 recorded in December alone, including a new treatment from Johnson & Johnson called Sirturo for drug-resistant tuberculosis, the first new TB drug in decades.

Other approvals in 2012 included Eliquis, a drug that reduces stroke risk in patients with irregular heartbeats, from Bristol Myers-Squibb and Pfizer Inc. The FDA also approved Adasuve by Alexza Pharmaceuticals, the first treatment for schizophrenia and bipolar disorder that can be inhaled.

Many others approvals were for rare diseases, underscoring the drug industry’s increased focus on specialized, niche products. They included treatments such as a Kalydeco from Vertex Pharmaceuticals Inc, for a rare form of the lung disorder cystic fibrosis, and Signifor from Novartis AG, for Cushing’s disease, caused by over-production of the hormone cortisol. The last drug to be approved in 2012 was for a drug to relieve symptoms of diarrhea in patients with HIV and AIDS made by Salix Pharmaceuticals Ltd.

Leading on from 2012, there are also encouraging signs that the pick-up in new drug approvals could continue in 2013. The European Medicines Agency expects 54 new drug applications in 2013, up from 52 in 2012, 48 in 2011, and 34 in 2010.

New drug approvals offer a positive alternative to the controversial industry practice “pay for delay,” whereby brand-name pharma companies pay generic drug makers to delay the release of their cheaper alternatives.

The well-known practice has recently come under fire by the Federal Trade Commission, which claims the practice costs consumers close to $3.5 billion each year in higher drug costs, is anti-competitive and violates antitrust laws.

“Pay for delay” typically involves brand-name drug makers suing generic companies for patent infringements, and then agreeing to withdraw the suits and pay the generic company if they agree not to sell their cheaper drugs for a while.

In the past, drug makers have won several court cases that have allowed the practice to continue, but the U.S. Supreme Court has now agreed to hear a case challenging this common industry practice, which could soon put an end to it.