A total of 667 innovative biopharmaceuticals was launched in the US over the past 20 years, bringing new treatment options to both small and large groups of patients suffering from specific diseases. After a low point of only 19 launches in 2008, the number has steadily increased and reached 47 in 2015. From a numerical perspective and anticipating the progress of drug candidates currently in the research and development pipeline, the state of biopharmaceutical innovation is robust.

The source of the biopharmaceutical innovation that is successfully launched in the U.S. is highly diverse, with over 300 entities filing original patents to protect the intellectual property that became the basis for the 667 medicines that were launched. Nearly three quarters of the molecules were launched by a company different from the one that filed the original patent, reflecting the level of activity in licensing, partnering and acquiring associated with biopharmaceutical innovation.

The characteristics of biopharmaceutical innovation have evolved in some respects over the past two decades. Most notably, drugs for the treatment of patients with cancer have increased their share of all launches from 11% in the 1996–2000 period to 28% in the most recent 5-year period. During the same period, drugs launched with an orphan indication rose from 21% to 42% of all launches. The proportion of new biopharmaceuticals that are biologic in nature and primarily prescribed by a specialist also rose during the past 20 years.

The average time from original patent filing until U.S. launch for all molecules is 12.8 years, with upper and lower quartiles of 16.3 and 8.2 years respectively. Significant outliers exist at both ends of the distribution curve, typically due to specific characteristics of the molecules or drug development history. Since 2008, the average elapsed time from patent filing to launch has declined, with the most recent 5-year cohort having declined by more than four years, or by 25%. This brings the time from patent filing to launch for the most recently launched cohorts into line with the timing observed in the 1996–2002 period.

Across many characteristics, the time from patent filing to launch is similar and has moved consistently over the 20-year period, suggesting systemic factors determine this elapsed time. Exceptions, however, are observed in the cohort of drugs brought to market by the same company that filed the patent, which took on average 36 months less time to be launched. Oncology drugs also were launched on average 34 months more quickly than others. And drugs that reached at least $1 billion in annual U.S. sales by 2015 also saw a shortened time from patent filing to launch of 27 months.

The time from a product’s launch until the expiration of its patent or other form of exclusivity protecting intellectual property defines the effective period during which returns on research and development investments can be achieved. This period is just over 13.5 years on average for all molecules studied with upper and lower quartiles of 15.9 and 11.3 years respectively. The average exclusivity time for each annual cohort has declined by about 35 months from the beginning of the period studied until the more recent launch cohorts. The longest period of patent protection is seen in those molecules which reached at least $1 billion in annual U.S. sales by 2015. This cohort averaged a 23-month longer exclusivity period, which may reflect more intense efforts by the manufacturers of those commercially successful products to maintain protection. Other characteristics of molecules were not correlated with significantly longer or shorter periods of exclusivity.

Sales trends for medicines launched over the past 20 years are characterized by a relatively small number of outlier products with significantly higher sales than the majority of products. In each year, the five drugs with the highest cumulative sales in their first five years on the market average 14 times higher sales than the rest of drugs launched that year.

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.

The majority of drug launches achieve very modest levels of average annual sales in their first five years on the market. Over the 20-year period, 62% of the launches averaged less than $100 million in average annual sales during their initial five years following launch. This percentage was 64% for the most recent cohort, reflecting the shift to orphan drugs, which typically achieve lower levels of annual sales, and the growing competitiveness of the market and access restrictions for newly launched drugs.

The time elapsed from a product’s launch until it reaches peak sales in the U.S. has been generally shortening during the past 20 years. A growing percentage of products launched 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. In earlier periods, the most common products to peak within five years of launch were cancer products, as products rapidly reached their target patient group and also were replaced in usage just as quickly when better treatments became available. The more recently launched cancer treatments are expanding their range of indications which extends their use and extends their time to reach peak sales.

A relatively consistent 24–27% of products are reaching their peak sales in less than five years, including a small number in the last five years where data is incomplete. In addition to cancer products, which in earlier periods peaked within five years of launch, hepatitis C treatments have been notable for rapid adoption and subsequent decline as newer treatment options address significant unmet need in the disease.

The U.S. market remains of vital importance to biopharmaceutical innovation, accounting for more than 61% of a new drug’s sales over its first five years following launch, and 68% for the cohort of launches in the 2011–15 period.Ex-U.S. markets are generally proving more challenging for biopharmaceutical innovation from both a pricing and volume perspective.

For manufacturers and investors alike, the prospects for biopharmaceutical innovation remain positive, even as the time elapsed from patent filing to launch remains stubbornly long and the period of exclusivity following launch is steadily declining. The commercial returns for a small number of outlier molecules are outsized but rare, while a substantial number of molecules being launched achieve levels of commercial success that fall far below threshold levels of economic return. Stakeholders with an interest in maintaining the biopharmaceutical innovation cycle are looking to seize opportunities to improve returns while lowering investment levels, many of which are now possible through harnessing the insights derived from real-world evidence and big data.u