Trends: The quantity and quality of worldwide new drug introductions, 1982-2003

Health Affairs

Volumn 25, Issue 2, 2006, Pages 452-460

  Grabowski, Henry G ^a   Wang, Y Richard ^b,c  

^a DUKE UNIVERSITY   (United States)

^b ASTRAZENECA   (United Kingdom)

^c UNIVERSITY OF PENNSYLVANIA   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

NEW DRUG;

ARTICLE; BIOTECHNOLOGY; DRUG APPROVAL; DRUG INDUSTRY; DRUG MANUFACTURE; EUROPE; HEALTH; HUMAN; STANDARD; STATISTICS; UNITED STATES;

BIOTECHNOLOGY; DRUG INDUSTRY; DRUGS, INVESTIGATIONAL; EUROPE; HUMANS; INVESTIGATIONAL NEW DRUG APPLICATION; ORPHAN DRUG PRODUCTION; UNITED STATES; WORLD HEALTH;

EID: 33645697832     PISSN: 02782715     EISSN: 02782715     Source Type: Journal    
DOI: 10.1377/hlthaff.25.2.452     Document Type: Article

References (47)

1. National Academy of Engineering, The Competitive Status of the U.S. Pharmaceutical Industry (Washington: National Academies Press, 1983).
2. H. Grabowski, "An Analysis of U.S. International Competitiveness in Pharmaceuticals," Managerial and Decision Economics 10, no. 1 (1989): 27-33;
3. L.G. Thomas, "Implicit Industrial Policy: The Triumph of Britain and the Failure of France in Global Pharmaceuticals," Industrial and Corporate Change 3, no. 2 (1994): 451-489;
4. and L.G. Thomas III, The Japanese Pharmaceutical Industry (Cheltenham, England: Edgar Elgar, 2001).
5. Grabowski, "An Analysis," 29-30.
6. IbidGrabowski, "An Analysis,". The U.S. share of global NCEs was 38.2 percent from 1982 to 2002.
7. Ibid.Grabowski, "An Analysis,"
8. A. Gambardella, L. Orsenigo, and F. Pammolli, "Global Competitiveness in Pharmaceuticals: A European Perspective" (Luxembourg: Office for Official Publications of the European Communities, 2001).
9. D. Dranove and D. Meltzer, "Do Important Drugs Reach the Market Sooner?" R AND Journal of Economics 25, no. 3 (1994): 402-429. Some of these measures are more feasible than others to employ on a global basis.
10. Although drug novelty is a separate quality indicator from therapeutic importance, the two are positively related. In particular, 57 percent of first-in-class drugs received FDA priority status, compared with 40 percent for other drugs.
11. H. Grabowski "Are the Economics of Pharmaceutical R&D Changing? Productivity, Patents, and Political Pressures," PharmacoEconomics 22, Supp. 2 (2004): 15-24.
12. Biotech drug sales grew 17 percent in 2004, compared with 8.3 percent for overall U.S. drug sales. IMS Health, "IMS Reports 8.3 Percent Dollar Growth in 2004 U.S. Prescription Sales," Press Release, 14 February 2005, http://www.imshealth.com/ims/portal/front/articleC/0,2777,6599_3665_70069264,00. html (accessed 8 December 2006).
13. In particular, 78 percent of the orphan drugs in our sample received an FDA priority rating, compared with 39 percent for nonorphan drugs.
14. W.M. Wardell, "The Drug Lag Revisited: Comparison by Therapeutic Area of Patterns of Drugs Marketed in the United States and Great Britain from 1972 through 1976," Clinical Pharmacology and Therapeutics 24, no. 5 (1978): 449-524;
15. and K.I. Kaitin and J.S. Brown, "A Drug Lag Update," Drug Information Journal 29, no. 2 (1995): 361-373.
16. E.R. Berndt et al., "Industry Funding of the FDA: Effects of PDUFA on Approval Times and Withdrawal Rates," Nature Reviews: Drug Discovery 4, no. 7 (2005): 545-554.
17. Ibid. E.R. Berndt et al., "Industry Funding of the FDA: Effects of PDUFA on Approval Times and Withdrawal Rates," Nature Reviews: Drug Discovery 4, no. 7 (2005): 545-554.
18. E.M. Healy and K.I. Kaitin, "The European Agency for the Evaluation of Medicinal Products' Centralized Procedure for Product Approval: Current Status," Drug Information Journal 33, no. 4 (1999): 969-978.
19. IMS Health, Global Pharmaceutical Review (Plymouth Meeting, Pa.: IMS Health, October 2004).
20. P. Danzon and L. Chao, "Does Regulation Drive Out Competition in the Pharmaceutical Markets?" Journal of Law and Economics (October 2000): 311-357.
21. P. Danzon, Y.R. Wang, and L. Wang, "The Impact of Price Reguktion on the Launch Delay of New Drugs - Evidence from Twenty-five Major Markets in the 1990s," Health Economics 14, no. 3 (2005): 269-292;
22. K.I. Kaitin and C. Cairns, "The New Drug Approvals of 1999, 2000, and 2001: Drug Development Trends a Decade after Passage of the Prescription Drug User Fee Act of 1992," Drug Information Journal 37, no. 3 (2003): 357-371;
23. and M. Kyle, "Pharmaceutical Price Controls and Entry Strategies," Review of Economta and Statistics (forthcoming).
24. U.S. Food and Drug Administration, Center for Drug Evaluation and Research, CDER Report to the Nation: 2004, http://www.fda.gov/cder/reports/rtn/ 2004/rtn2004.htm (accessed 10 January 2006).
25. IMS Health, IMS Retail Drug Monitor, Twelve Months to December 2003 (Plymouth Meeting, Pa.: IMS Health, 2004).
26. The USC and ATC systems are similar for many therapeutic classes, but they exhibit a few important differences. For example, the USC fails to separate triptans from older migraine drugs, and the ATC fails to separate selective serotonin up-take inhibitors (SSRIs) from tricyclic antidepressants. Some NCEs are first-in-class in more than one class; we used only the earliest class to avoid double counting.
27. The fact that we excluded first-in-class drugs that are not yet available in the United. States should not affect our results materially. There are strong economic incentives to introduce important drugs in the United States with short time lags.
28. Martindale, The Complete Drug Reference, 1982-2003 eds. (London: Pharmaceutical Press, various years).
29. Our method might overestimate U.S. firms' out-put of NCEs if an N CE patented by a foreign firm is licensed to a U.S. firm and the first launch is in the United States. We checked the launch of first-in-class NCEs in the G7 countries against the first global launch and found no such case.
30. Percentages of global NCEs are underestimates for recent NCEs because of right censoring.
31. Grabowski, "An Analysis."
32. See Kaitin and Cairns, "The New Drug Approvals of 1999, 2000 and 2001," and the analyses of U.S. new drug approvals for earlier periods cited therein. For a few years (such as 1996), the number of NME approvals by the FDA exceeded the number of worldwide launches. However, the FDA's definition includes some categories that are not included in the IMS definition of NCEs. Second, many drugs have their worldwide launch outside the United States. Third, the U.S. peak in FDA approvals in 1996 in particular reflected, uncertainty about the pending renewal of PDUFA.
33. Data for 2002 and 2003 are omitted from Exhibit 2 (see Exhibit 2 Notes). We do include these values in the eleven-year-interval comparisons dis cussed above.
34. J. DiMasi, H. Grabowski, and J. Vernon, "R&D Costs and Returns by Therapeutic Category," Drug Information Journal 38, no. 3 (2004): 211-223.
35. U.S. firms benefited from this earlier passage of the orphan drug legislation (1983) compared with Japan (1993) or the EU (1999). Also, the United States has a higher prevalence standard for orphan-drug status and more generous tax incentives. H.E. Kettler, Narrowing the Gap between Provision and Need for Medianes in Developing Countries (London: Office of Health Economics, 2000), 40-43.
36. J.A. DiMasi, R.W. Hansen, and H.G. Grabowski, "The Price of Innovation: New Estimates of Drug Development costs," Journal of Health Economics 22, no. 2 (2003): 151-185;
37. and H. Grabowski, J. Vernon, and J.A. DiMasi, "Returns on Research and Development for 1990s New Drug Introductions," PharmcoEconomics 20, Supp. 3 (2002): 11-29.
38. Dranove and Meltzer, "Do Important Drugs Reach the Market Sooner?"
39. E.R. Berndt, "Pharmaceuticals in U.S. Health Care: Determinants of Quantity and Price," Journal of Economic Perspectives 16, no. 4 (2002): 45-66.
40. J. Calfee, "The Determinants of Pharmaceutical Price Disparities among Developed Countries" (Unpublished paper, American Enterprise Institute, May 2005).
41. F.M. Scherer, "New Perspectives on Economic Growth and Technological Innovation" (Washington: Brookings Institution, 1999).
42. M.K. Olson, "Are Novel Drugs Less Risky for Patients than Less Novel Drugs?" Journal of Health Economics 23, no. 6 (2004): 1135-1158.
43. G. Cook, "U.S. Stem Cell Research Lagging: Without Aid, Work Moving Overseas," Boston Globe, 23 May 2004.
44. Grabowski, "Are the Economics of Pharmaceutical R&rD Changing?"
45. Ibid. Grabowski, "Are the Economics of Pharmaceutical R&rD Changing?"
46. FDA, CDER Report to the Nation.
47. Pharmaceutical Research and Manufacturers of America, "R&D Investment by Pharmaceutical Companies Tops $38 Billion in 2004," Press Release, 18 February 2005, http://www.phrma.org/mediaroom/press/releases/ 18.02.2005.1128.cfm (accessed 8 December 2005).