About the Report
Over the past 20 years, over 700 new active substances (NASs) have successfully been discovered, developed and authorized by regulatory bodies for use with patients globally. This report profiles the NASs launched in the U.S. over the past 20 years and measures the length of a molecule’s lifetime from patent filing to launch and eventual patent expiry. It also explores the significant variations in this lifetime when viewed by molecule characteristics such as therapy area, orphan drug status, and the type of companies involved in the development and marketing. These issues and trends highlight important implications for investors and manufacturers.
A total of 667 innovative biopharmaceuticals launched in the U.S. over the past 20 years, 1996-2015, bringing new treatment options to patients. After a low point of only 19 NAS launches in 2008, the number has steadily increased and reached 47 in 2015. The characteristics of biopharmaceutical innovation have also evolved over the past two decades, with increases in the share of cancer treatment launches from 11% to 28%, orphan indications from 21% to 42% and biologic launches.
The time between when a medicine is discovered and when the originator ceases to receive significant revenues can be considered its lifetime. The average time from initial patent filing until launch for all molecules studied is 12.8 years, while the time from a product’s launch until the expiration of its patent or other form of exclusivity is just over 13.5 years and has been steadily declining. The combination of these factors are contributing to a decline in economic returns from investment in research and development, although these remain positive.
The majority of drug launches achieve modest levels of average annual sales in their first five years on the market, although a relatively small number of outlier products garner significantly higher sales. A growing percentage of products are taking longer than five years to reach their peak sales, which may reflect slower progress to reach the patients who will benefit from the new medicines.
The Highest Proportion of NASs Launched 1996–2015 Target Oncology and Communicable Diseases
- Oncology drugs accounted for 18% of NASs, as the number of tumor types with highly effective treatments has increased dramatically over 20 years.
- NASs for CNS disorders and mental health contributed 9% to the launches during the analyzed period, while cardiovascular and anti-diabetes drugs make up 6% and 3% of launches, respectively.
- Of the NASs, almost 60% are primarily prescribed to patients by specialists rather than primary care physicians, about a quarter are biologics, and almost one third have one or more orphan designations granted by the FDA.
- Nearly three quarters of new medicines were patented by a different entity than the company that registered the drug with the FDA for marketing in the U.S.
The Average Time from Patent Filing until Launch in the U.S. Market for NASs Launched 1996 to 2015 is 12.8 Years
- Some NASs have short patent to launch times with patents filed close to their launch date. This can occur, for example, when the molecule is a naturally occurring substance or when the original patent was filed in another country.
- In other cases, many years or even decades elapse between a drug’s initial patent and its eventual launch. This can reflect, for example, molecules which were patented and whose development was left dormant for a period.
- Over the past 20 years, the average time from patent filing to launch has also varied for each year’s cohort of new drugs from a low of 10 years 8 months in 1998 to a high of 17 years 7 months for the 2008 cohort.
The Average Time from Launch until Patent Expiry in the U.S. Market for NASs Launched 1996 to 2015 is 13.5 Years
- Patents in the U.S. are granted to protect intellectual property for a period of 20 years from the time of filing, but other forms of exclusivity can be granted. Subsequent patent filings related to a molecule or delivery device also may have a term of twenty years from the date of filing and extend the protected time relative to the original patent.
- Due to delays in clinical trials or setbacks in regulatory reviews, some products reach the market with substantially less of their patent lives remaining than others.
- The majority of NAS reach the market with more than 10 years remaining under patent protection.
Only a Small Share of NASs See High Average Annual Sales in the First Five Years
- The majority of drug launches achieve very modest levels of average annual sales in their first five years on the market.
- From 1996–2015, 62% of the launches averaged less than $100 million in average annual sales during their initial five years following launch, suggesting that substantial lifetime returns are exceedingly rare.
- Only 19 drugs have reached the $1 billion in annual sales mark within their first five years on the market over the past 20 years, but 9 of these were launched in the past five years, including the only four drugs that exceeded $3 billion in annual sales within five years of their launch, and among these two notable hepatitis C drugs.