It was a mixed year for pharma last year, with a notable high being the record number of NCEs approved by theFood and Drug Administration (FDA) (46). In a reverse of the trend seen in recent years, the top 25 companies byrevenue originated 10.7% of the active drugs, slightly up on the 10.5% seen in 2015.In terms of product number, big pharma’s pipeline activity is clustered around oncology, dyslipidemia, hepatitis Cand diabetes, and pressure to acquire the best assets will see a continuation of recent M&As, leading to what somedescribe as 2016 being the “year of merger mania”.
The Productive Innovation Index (PII), now in its sixth year, provides a systematic, objective assessment of howwell the top 30 companies perform in successfully bringing new medicines to market.Within the 2016 rankings, we see Johnson & Johnson retain the top spot for the fourth consecutive year, butfollowing close behind are Takeda, Novo Nordisk, AbbVie and Otsuka that made significant leaps of 10+ places up the ranks to join the top 10. Amongst those making way for them were Roche, Novartis and Merck, all falling nine or more places downwards.
Pharma Idea identifies indices to establish a punctiliously assimilated report of market growth and its contributing factors. The indices which were identified to date in order to rank top 30 pharmaceutical companies include global sales/ market capitalisation – a measure of the funding available for commercialisation efforts, trend in historical sales and share movements, projected/ analyst forecast sales and share movements, regulatory efficiency: speed to market, end-of-phase I to launch, regulatory success ratio, etc.
Factors like attrition rate in phase III - particularly failure on efficacy grounds vs. placebo or standard of care, value proposition, need for product, were also included. This entails questions like—did products achieve reimbursement, NICE approval? Did FDA grant expedited processing or breakthrough status?
This paper also took into consideration figures on developing first in class NCEs or novel mechanisms of action, sales vs. ostensibly similar molecule; relative ranking, gearing, sales and marketing spend vs. turnover, etc. Ratio of new product ideas vs. ‘me-toos’, ‘Freshness index’ - percentage of company sales generated by products launched in the last three to five years and lastly, analyst ranking.