The Importance of Companies for Pharmaceutical Discovery: Origins of a Decade of New Products

A recent article in Nature Reviews Drug Discovery examined the current environment for drug research and development (R&D) in many countries. In doing so, the author recognized that “understanding the factors that promote drug innovation is important both for improvements in health care and for the future of organizations engaged in drug discovery research and development.”

However, the author identified major challenges to R&D, “including pharmaceutical industry pipelines that are insufficient to replace revenues from drugs that are becoming generic, diminishing venture capital funding for early stage companies and mounting criticism of university technology licensing practices.” To help develop strategies to address these challenges, the author acknowledged the need to understand the “factors that promote the discovery and development of new drugs — particularly truly innovative drugs that respond to unmet medical needs.”

Accordingly, the study presented an analysis of the origins of 252 new drugs that were approved by the US Food and Drug Administration (FDA) from 1998 to 2007, which represent almost all the new drugs approved during this period that are regulated by the FDA’s Center for Drug Evaluation and Research (CDER). 215 of which were approved under New Drug Applications (NDAs) as new molecular entities (NMEs) and 37 of which were approved under Biologics License Applications (BLAs). Overall, we have:

• 58% from pharmaceutical companies
• 18% from biotech companies
• 16% from universities, transferred to biotech
• 8% from universities, transferred to pharmaceutical companies.

The study then classified the drugs according to whether they were scientifically innovative and whether they respond to unmet medical needs. The author noted that whether the FDA granted such NMEs a priority review (pNMEs) was an indicator of whether the NME responded to unmet medical needs. An indicator of innovativeness was the novelty of the mechanism of action and/ or the chemical structure of the drug.

The study classified 118 (46%) drugs as novel and the remaining 134 drugs were classified as follow-ons:

• 44% were from pharmaceutical companies.
• 25% were from biotech companies, and
• 31% were from universities (transferred to either biotech or pharma).

This assessment of scientific innovativeness disputes what critics of pharmaceutical companies maintain by showing that industry is making almost half of the discovery contribution to scientifically innovative drugs. The study also found that just under half (123) of the drugs during this period were given priority review, and of those:

• 46% from pharmaceutical companies.
• 30% from biotech companies.
• 23% from universities (transferred to either biotech or pharma).

According to an analysis of this data, “the biotech- and university-derived drugs outperformed industry in that the majority of biotech submissions were priority reviews, and the majority of pharma drugs were not. Nevertheless, this finding is significant because contrary to speculation and criticism, it shows that pharmaceutical companies are focusing almost half of their drug R&D for products that treat unmet medical needs.

Although 65% of the products made by industry in this study corresponded to follow-on products, the greater proportion of innovative drugs from universities and biotechnology companies are orphan drugs. This distinction is important to recognize because “it’s not that the big companies are averse to novel therapies.” In fact, as Dr. Lowe noted in his blog post, big companies are “taking whacks at new mechanisms and unmet needs, but they tend to do it in the large-market indications.”

Orphan drugs account for a substantial proportion (35%) of the scientifically novel and priority approved drugs in the study. They also account for over 40% of all university discovered drugs, half of the university discovered drugs developed initially by biotechnology companies, and over a quarter of those discovered in biotechnology companies themselves. While it is important that 60% of the orphan drugs are attributable to US inventors (compared with 47% of all 252 drugs), there are significant economic considerations between pharmaceutical companies and universities that distinguish such discoveries (i.e. risk, revenue, sales, etc.).

It seems as if the difference is that, “the majority of the novel stuff from universities gets taken up by biotech companies rather than by pharma.” In fact, 80% of drugs discovered in US, Australian and Canadian universities were transferred to biotechnology companies. However, “In all but a few countries, pharmaceutical companies discovered the overwhelming majority of drugs.”

In the United States, most of the scientifically innovative drugs were discovered in biotechnology companies or in universities transferring to biotechnology companies. Based on this finding, it is clear that academic medical center policies should encourage the tradeoff between industry and academia to continue and increase this innovation.

Conclusions

Since biotechnology companies and universities that transfer their discoveries to such companies accounted for approximately half of the FDA approved drugs that were scientifically innovative and half of those that respond to unmet medical needs in the period 1998– 2007, there is a clear need to continue this collaboration. Policies should reflect the desire and willingness of universities to encourage this trade off because “it is clear that the biotechnology companies themselves in the United States have played a key part in its innovative drug output in the period studied.”

This study has shown that without the contribution of biotechnology companies, the number of new innovative drugs discovered in this period that respond to unmet medical needs would have been substantially lower, particularly for orphan drugs. The findings from this study also demonstrate that publicly supported academic research are valuable for both biotechnology and pharmaceutical companies, as are the scientists trained in the course of academic research.

Moreover, the author acknowledged the role of the Bayh–Dole amendments that facilitated the exclusive licensing of government funded university inventions, and recognized that these provisions have been supportive of startups, and close relationships with universities that have been important for the formation of biotechnology companies and have aided the development of many biotechnology products.

Given the success of these relationships between biotechnology companies and universities, the author noted the need for “discovery oriented collaborations between pharmaceutical companies and academic institutions to emphasize closer cooperation between pharmaceutical companies and academic scientists than was previously the case.”

In light of all the changing conflict of interest policies at academic medical centers, universities should consider this recommendation because as the study notes, “closer cooperation might result in pharmaceutical companies pursuing the development of a greater number of drugs with novel mechanisms of action.”