In the current risky climate, pharma technologies are recession-proof - MedCity News

Among the 20 largest pharmaceutical companies in the world, ranked by their revenue in 2021. 19 generate most of their sales from specialty drugs. Overall, 55% of pharmaceutical revenue is driven by specialty drugs. This basic fact about how prescription drug companies make money is mostly lost on the general public, but it’s instructive in understanding how the entire industry works and why it’s relatively recession-proof.

Take Johnson & Johnson. In February of last year, the US Food and Drug Administration cleared its Covid-19 vaccine for emergency use. This vaccine reports $2.4 billion in sales in 2021, an outstanding figure in every year. Still, the vaccine wasn’t J&J’s main driver in 2021; its specialty cancer drug Darzalex generated $6 billion in sales. All J&J oncology offerings combined to account for more than $14.5 billion in sales. Stelara, which is used to treat the symptoms of two incurable diseases (psoriasis and Crohn’s disease, which can sometimes cause life-threatening complications), reported $9.1 billion in sales per se. Overall, Johnson & Johnson reported $93.77 billion in global revenue in 2021, a jump of more than $10 billion from 2020. Its pharmaceutical division led the way ($52 billion), but not for the reason many assumed .

Special medicines it is reported reached 50 percent of all drug spending in 2020, a figure that has has increased significantly over the last decade. However, it is believed that these drugs are only used by 2 percent of the population each year. The disparity between usage and revenue is only growing. The rising cost of specialty drugs is at the forefront of this trend, but it is not the only driver.

The role of pharmaceutical innovation is significant. In 2020, the Food and Drug Administration approved its second-highest annual number of new molecular entities ever. 53 drugs were included a treatment for lung cancer, Ebola, HIV, and a diagnostic agent for Alzheimer’s patients. According to a 2021 study published in the American Journal of Health System-Pharmacy, as the FDA continues to approve many new specialty drug therapies, we can expect continued significant clinical and financial impact. Innovation is a constant in medicine, but its impact is most felt in the market of specialty drugs.

The result then is a pharmaceutical industry incentivized to ensure that patients have access to the drug in which they have invested so much of their own time and money. During an economic recession, this can be easier said than done. Patient dollars are limited. Prescription drug manufacturers are mindful of the issues of easy access. One recently sued for $100 million against a pharmacy manager, alleging abuse of a patient financial assistance program. By investing more in patient assistance programs and patient access technologies to ensure no covered patient gets lost in the shuffle, manufacturers hope to remove financial barriers to expensive drugs.

Just getting to the point of receiving therapy, however, requires a long, painful journey for patients, with many opportunities to drop out along the way. Accessing and providing life-saving and life-enhancing drugs is a complex challenge that patients are willing to take on, but a challenge nonetheless. A recent study revealed that 84 percent of specialty medicine providers experience some difficulty starting patients on their complex medications. It is estimated that pharmaceutical companies have collected $76 billion in lost revenue opportunities due to access issues. The specialty drug ecosystem involves a costly, complex and disjointed journey for patients through their providers.

These factors persist regardless of the economic climate. Specialty drugs are effectively recession proof. That’s why the influx of venture capital into PharmaTech should come as no surprise. Entrepreneur Mark Cuban created Price plus medication to “discontinue drug production and do everything we can to end ridiculous drug prices.” GoodRx, which operates under a similar mission, went public in 2020 and is is estimated to be around $15.7 billion. Startups that integrate with providers to increase patient adherence have also won venture funding in recent years. In theory, businesses like these could help close the gap between patients and the specialty drugs they need.

As the price of generic drugs plummets, the pharmaceutical industry is experiencing billions of dollars in windfalls thanks to its innovative specialty drug offerings. However, access to medicines remains a major problem. This is a problem that the pharmaceutical technology industry is preparing to solve.

Photo: Eightshot Studio, Getty Images

Source link

Leave a Reply

Your email address will not be published.