These are the events that shaped the industry this year.
Photograph by Justin Sullivan – Getty Images
By Sy Mukherjee
December 26, 2016

The biotech and pharmaceutical industries had a whiplash 2016 after several consecutive years of record drug approvals and palpable excitement in the sector surrounding innovative new therapies. Skittish investors began pulling investments as the 2016 presidential campaign and several major pricing scandals (and high-profile clinical trial failures) shone a bright light on pharma’s practices, sending major biotech ETFs plunging as much as 20% year-to-date.

That’s not to say that there weren’t also major advances, especially in the cancer drug space and robust government efforts to encourage data-sharing and build up federal repositories of genetic information for research purposes. But, all told, it was a relatively grim year for biopharma by recent standards.

Here are five of the most important events to hit the industry in 2016.

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1. It’s the drug prices, stupid

If you had to distill the drug industry’s 2016 to two words, they would be “drug pricing.” After Martin Shkreli and Valeant Pharmaceuticals (vrx) opened the floodgates on the issue in 2015, a series of reports broke on pharmaceutical companies’ increasing use of major drug price hikes (including on products that have been around for decades), culminating in the most recent scandal over Mylan’s EpiPen. Politicians’ high-profile scorn on the issue certainly didn’t help, either.

The drug price increases could very well continue, especially as big pharma companies face continued headwinds in their product pipelines while flagship therapies face competition from cheaper generic versions as they lose patent protection. But the level of the furor—in addition insurance companies’ and benefits managers’ increasing willingness to play hardball in order to secure deeper discounts and performance-based pricing—is also prodding some companies to self-regulate before lawmakers feel obligated to do it for them.

In fact, both Allergan (agn) and Novo Nordisk (nvo) have pledged to limit price increases to what they say is a more “reasonable” level in the single digits.

2. Plummeting drug approvals

In 2015, the Food and Drug Administration approved 45 new drugs. This year, that number stands at 21 (to date).

So why such a sharp drop from a record year of new therapies? Outgoing Office of New Drugs director Dr. John Jenkins offered some of the reasoning in his latest report on drug approvals (note: Jenkins’ report is based on data from December 9, since when the FDA has approved two more new therapies).

For one, several of 2015’s approvals weren’t slated to come until this year, but were granted early green lights; and the FDA issued more rejections this year than usual, often citing problems with plants where certain experimental therapies are being developed.

But the most worrisome reason might be that the industry generally filed fewer new drug applications this year, highlighting the struggles that traditional drugmakers have had in successfully developing new therapies (especially outside of the cancer drug space) and bringing them to market in 2016.

3. A last-minute gift from Congress

One unequivocal victory for biopharma was this month’s passage of the 21st Century Cures Act—a sweeping health reform bill that contains a grab bag of provisions long sought by drugmakers.

The bill easily passed Congress in the wake of an intense lobbying push from seemingly every major health care interest group, from patient advocates to the biopharma industry. It funds medical research through appropriations for the National Institutes of Health (NIH) and could help speed up the drug approval process by allowing drug makers to use “real-world” data on medicines (instead of just randomized clinical trials).

But Cures has its share of critics, too. Some argue that it will weaken the FDA’s regulatory standards and knock it from its perch as one of the more discerning medical regulatory bodies in the world. Others point out that the NIH funding must be reauthorized every year, and might come under fire in a new Congress.

4. Next-gen genomic science and technology continues to excite

In 2015, cancer was the only major cause of death where the mortality rate actually declined. That’s likely thanks, in part, to increasing industry-wide focus on oncology medicines and the declining costs of genetically sequencing patients’ tumors. The power of sequencing and big tech firms like IBM (ibm) and GE Healthcare’s data analytics partnerships with biopharma players has led to a boom in personalized medicine, making it easier to match patients with the most effective therapies for them.

And then there’s the groundbreaking new methods of manipulating and re-engineering the body’s cells to fight diseases. Chinese scientists launched the first CRISPR gene-editing trial in humans to treat cancer; immunotherapy companies like Kite, Juno, and Novartis made progress (albeit uneven progress) on their experimental treatments that train the body’s immune cells to target cancer; digital health continued to change the face of drug delivery, with device maker Medtronic (mdt) winning approval for the first “artificial pancreas” to treat type 1 diabetes; and the U.K. made three-parent babies an officially sanctioned tool for fighting devastating genetic disorders passed on through the mitochondria.

5. Big shakeups at big pharma

No fewer than six major pharmaceutical chief executives either left their companies or announced they were on the way out the door this year: GlaxoSmithKline’s (gsk) Sir Andrew Witty; Valeant’s J. Michael Pearson; Biogen’s (biib) George Scangos; Eli Lilly’s (lly) John Lechleiter; Gilead’s (gild) John Martin; and Novo Nordisk’s Lars Rebien Sorensen.

With those high-profile departures, the face of big pharma’s C-suite is going to look very different in 2017. And that may be fitting as industry giants struggle with plunging ROI from their R&D operations and implement widespread reorganizations in order to cut costs. Of course, the executive ranks aren’t the only parts of the companies with shifting jobs—nearly a half dozen big pharma announced significant job cuts ranging from the hundreds to the thousands this month.

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