Pharmaceutical companies ‘moving away from blockbuster drugs’

Pharmaceutical companies are increasingly investing in the development of niche drugs rather than blockbuster treatments defined by sales of over $1 billion (520 million pounds) per year, according to a new report.

Datamonitor claims that pharmaceutical companies are relying less on the revenues of blockbuster products, as patent challenges from generic drug manufacturers become increasingly popular.

Instead, the industry has become driven more by research and development as companies realise the profit to be made by targeting unmet clinical needs, as well as the fact that generic competitors are less likely to enter niche markets as quickly upon patent expiration, the company states.

Datamonitor’s healthcare strategy analyst, Dr Mark Belsey, remarked: “Rather than being centred around sales and marketing, which has driven the success of many current blockbusters, much greater emphasis is being placed upon R&D because it has to generate a greater number of drug candidates.”

He describes successful niche-targeted drugs as “nichebusters”.

“A classic example of a nichebuster drug is Novartis’ cancer drug Glivec, which was initially approved for chronic myeloid leukaemia in 2001,” Dr Belsey added.

The expert explained that despite the drug’s relatively small patient population, it achieved annual sales of over $2.2 billion in 2005 as other niche uses for the drug have also been found.

Recently, Schering-Plough chief executive officer Fred Hassan described the prices paid for research companies by larger pharmaceutical firms as “breathtaking” in a recent interview with MarketWatch.