The product mix of pharmaceutical companies' pipelines and commercial drugs is of crucial importance to contract development
and manufacturing organizations as they evaluate their service capabilities and tailor them to demand. Market fundamentals
are changing. The erosion of the blockbuster-drug model, traditionally supported by small-molecule drugs (i.e., drugs with
a molecular weight of < 500 Da), in favor of an increased emphasis on biologic-based development is an important consideration
not only for pharmaceutical companies' product strategies, but for contract service providers that offer drug-substance and
finished-product manufacturing. Although small-molecule drugs will continue to dominate the overall pharmaceutical market,
market growth in small-molecule drugs will contract in the near term. Growth for monoclonal antibodies (mAbs), therapeutic
proteins, and vaccines is expected to be strong.
Big Pharma's growing focus on biologics
Table I: Combined global prescription sales for the top 50 pharmaceutical companies (excluding generic-drug companies) by
molecule type (2009–2014).
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In 2009, the value of the small-molecules market was $411 billion. The biologics market, on the other hand, was only valued
at $124 billion. By 2014, the small-molecule market will contract by $17 billion as a direct result of the 2011 patent cliff
and heavy erosion of branded-drug sales caused by generics (1). This large sales decline is the driving force behind the pharmaceutical
industry's shift in strategy to focus on high-growth markets such as biologics. mAbs alone will generate an additional $23
billion between 2009 and 2014, thus enticing a growing number of companies to expand in this field with the hope of ensuring
long-term growth. In fact, 36 of the top 50 pharmaceutical companies (excluding generics companies) will have a presence in
the mAb, therapeutic protein, or vaccines sector by 2014. Currently, 32 of the top 50 companies are now in those sectors.
Vaccines will grow at a 5.5% compound annual growth rate (CAGR) between 2009 and 2014, partly because of the emergence of
new technologies and the recent commercial success of several novel products such as Pfizer's (New York) pneumococcal vaccine
Prevnar and Merck & Co.'s (Whitehouse Station, NJ) human papillomavirus vaccine Gardasil (see Table I).
More biologic licenses and fewer new molecular entities Reflecting the pharmaceutical industry's burgeoning interest in high-growth biologic markets, 27% (seven out of 26) of
US Food and Drug Administration new drug approvals in 2009 were for biologic license applications (BLAs). This number represents
the highest proportion of biologic approvals since 2003 (2). In fact, the growth in approved BLAs offset the decline in approved
new molecular entities (NMEs). Furthermore, the number of US orphan-drug designations has more than doubled in the past decade,
from 208 (2000–2002) to 425 (2006–2008) (3). The number of orphan drug approvals grew from 32 to 47, an increase of 47%. In
2009, the European Medicines Agency (EMA) granted orphan status to 103 medicines, the highest number since European orphan-medicines
legislation was introduced in 2000 (4).
Injectable drugs set to drive market growth
Despite the current dominance of oral drugs, which typically are associated with small-molecule drug delivery, injectable
drugs enjoyed strong growth between 2002 and 2008 at 20.8% CAGR. Injectables will continue to enjoy the fastest growth rate
of all delivery mechanisms (i.e., 4.9% CAGR) until 2014, aided by the development of vaccines and mAb therapies which are
typically delivered by this mechanism. The loss of patent protection for blockbuster brands such as Pfizer's Lipitor (atorvastatin)
and Effexor (venlafaxine), and AstraZeneca's (London) Seroquel (quetiapine) will trigger strong generic-drug competition and
sales erosion for oral drugs.
