10 percent
How much of 2022’s revenue in major pharma was from new drugs…?
This most recent snapshot from the 2023 Innovation Index - the ‘Freshness Index’ - remains fascinating.
The graph shows how much of 2022's global revenues were from drugs first launched in the past 5 (or 3) years. A very reasonable test of 'freshness', most admit. It is not sufficient, but it is necessary that companies have a portfolio that includes new drugs as well as old.
If you take the bottom 20 in this cohort (= the top 30 companies by market cap as at 1/1/23), just ten percent of 2022’s revenue was from drugs launched in the past 5 years. And that includes major players: 12 FDA approvals (that is a lot of approvals!) contributed to just 8% of Novartis’ 2022 revenues; 10 drugs generated just 2% of Sanofi’s sales.?Even Pfizer's numbers are still being massively boosted by just 2 of their recent launches, and they're on the right side of this chart.
If you think all launches are equal, clearly the figures show a different story. Companies are differentiated by how they develop, rather than just what they develop.
If you wonder why companies remain hooked on the revenues from old drugs, it is because of charts like this.
I’ll reveal more in the next article or two, when I complete the 'Enemies of Innovation' series...
Healthcare | Global Healthcare Strategist | International Market Expansion Expert | Healthcare Growth Leader
1 年Very insightful and thought provoking thank you for sharing your thoughts on the topic. Could be valuable to do a couple of deep dives on the not so obvious cases of revenue discripancy. If we look at the chart below it makes sense that we launches have a hard time catching up to blockbuster legacy assets with multiple approved indications. Perhaps many of the new drugs are of a more personalized or orphan nature, serving a smaller patient population than older assets. 10% is low, but is it due to failed / non-optimal marketing strategy or a systemic shift in therapeutic paradigm away from one size fits all? I doubt that the launches and commercial strategies are the culprits here….
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