2015 was a banner year for biologics, with the first biosimilar, Zarxio, approved in the US in March.
“In 2014, we had a little more than 170 original INDs,” said Steven Kozlowski, M.D. director of the FDA’s Office of Biotechnology Products. Now, at the end of 2015, this number reaches 1,300.
The Trans-Pacific Partnership Agreement was also approved this year, after an agreement was reached in October 2015. The pact has several implications in the pharmaceutical industry, some specifically for the biologics industry, including two options for biologic exclusively: eight years of full exclusivity or five years of data exclusivity plus three years of semi-exclusivity.
Mergers and acquisitions
There were several high-profile IPOs in the fourth quarter of 2014, including PRA and INC Research, and several mergers and acquisitions, such as Covance and LabCorp, AMRI and Gadea.
According to Schafer, all of these IPOs “put more of a ‘Wall Street’ spotlight on the pharmaceutical services industry as a whole.”
Schafer predicts that similar activity will continue into 2016, adding that from a macro trend perspective, M&A activity will continue to dominate executive-level strategy at service provider companies.
He offers an example: “Think about a CRO or CMO that considered Allergan a major customer. If those companies don’t have strong relationships with Pfizer, then a substantial portion of future work could be at risk.”
Partnerships and preferred providers
Over the course of 2015, the top five public CRO’s market cap grew 41% and the top five CMO’s saw 47% growth. “We don’t see outsourcing penetration shrinking anytime soon,” said Schafer.
However, the way pharmaceutical companies outsource is a continually changing landscape in terms of models, players, and processes.
For example, 2015 brought the rise of risk-based monitoring (RBM) as an approach to clinical development. “And while RBM might not change the degree to which pharmaceutical companies outsource clinical development work,” said Schafer, “it could change who they use and how partnerships models are constructed.”
Formal preferred provider agreements also grew in popularity with 68% of sponsors creating formal preferred provider agreements with CROs, and 43% with CMOs.
The drug price debate
A look back at 2015 wouldn’t be complete without noting the ubiquitous coverage that drug prices saw throughout the year – and the subsequent contention across all fronts.
Most notoriously, Turing Pharmaceuticals raised a drug price more than 5,000% in one day.
Presidential candidate Hilary Clinton also proposed a cap on patients’ drug costs, and several drugs were rejected by the UK’s National Institute for Health and Care Excellence (NICE) on the basis of price.
The topic will continue to be a source of debate over the next year, and is expected to play a role in the upcoming elections.
“Overall,” concludes Schafer, “2015 was a very good year for pharmaceutical service providers.”