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Brainstorm Health: Pharma’s Innovation Fail, 23andMe Cancer Test, Gun Laws and Murders

Happy Tuesday, Dailies. IDEA Pharma, a leading drug industry consultancy, has released its 2018 “Freshness Index”—one of my favorite parts of the firm’s much-awaited annual Pharmaceutical Innovation Index (which is slated to arrive at the end of this month).

If you want a single snapshot of the state of creative production in Big Pharma, well, here it is:

What the chart above shows is simply the percentage of 2017 revenue that derived from products launched in the previous five years. In other words, how much of each company’s sales are coming from drugs fresh out of the pipeline versus how much are coming from older meds?

In that regard, the picture above is worth a thousand words: Nearly all of Big Pharma is riding on fumes, it seems.

On average, the 30 large and small pharmaceutical and biotech companies IDEA Pharma examined got just 11% of their 2017 revenue from drugs developed within the past five years, says Mike Rea, the firm’s CEO and one of the most insightful people I’ve met—no exaggeration—when it comes to pinpointing innovation choke points in the drug industry. Take out Gilead and Biogen from the mix and the group average drops to 8.1%. Nineteen of these 30 companies, meanwhile, got less than 7% of sales in the last calendar year from “new” products, says Rea. Please read his LinkedIn essay on this for more context (and you might want to follow him on Twitter, too).

Sure, a single chart will miss some nuances and may not capture every aspect of innovation churning in each company. But that said, dollars talk.

“I’ve heard several arguments over the years about how this doesn’t really matter, but I believe it does,” writes Rae in his LinkedIn post. “One of the issues we face, as an industry, is the familiar reputation/ pricing issue. But the real issue on pricing is the year-on-year rises on old drugs—the deflection is to talk about new drug prices, but the sleight of hand is on the double digit rises taken every year on the portfolio staples. Without those rises, however, just imagine how those companies with no new blood to talk about would be doing…?

For all the talk of ‘innovation’ in pharma, a term that is used with loose abandon, and even looser definition, the challenge of seeing ‘return on invention’ is clearly still a significant one.”

Well said.

Clifton Leaf, Editor in Chief, FORTUNE
@CliftonLeaf
clifton.leaf@fortune.com

DIGITAL HEALTH

23andMe authorized to sell DTC cancer genetic test without a prescription. 23andMe just added another another Food and Drug Administration (FDA) authorization to market a genetic test direct-to-consumers and without a prescription—this time, for cancer risk. The company will now be able to sell health risk reports on three variants found on the BRCA1 and BRCA2 genes, which are linked with a higher risk of breast, ovarian, and prostate cancer. 23andMe won a landmark FDA authorization last year to market DTC genetic health risk reports for 10 conditions, including Alzheimer’s and Parkinson’s.

What’s happening at HIMSS. Health IT’s biggest confab is underway in Las Vegas: the Healthcare Information and Management Systems Society annual meeting. Hot topics, as usual, include the use of data in health care, AI, digital health apps, and how to turn all of those things into products and services that actually produce real outcomes. Eric Schmidt had some thoughts to share on that Monday. (Healthcare Dive)

INDICATIONS

Bristol-Myers gets a dosing boost from FDA. The FDA has approved a four-week dosing schedule for Bristol-Myers Squibb’s cancer immunotherapy treatment Opdivo, doubling the current two-week schedule for a variety of cancers. That’s significant because it might expand the number of patients who get the drug, part of a new class of therapies called checkpoint inhibitors, for continuous treatment—and Bristol Myers has plenty of competition in the cancer immunotherapy field, including from rival Merck.

THE BIG PICTURE

Study: Stricter gun laws associated with fewer firearms murders, suicides. A wide-ranging new study led by NewYork-Presbyterian/Weill Cornell Medical Center suggests a protective correlation between counties in states with strict gun laws and ones that border them but may have more permissive policies. That is, simply being close to an area with strict regulations (even if the county itself doesn’t have them) may be correlated with a lower firearms homicide and suicide rate, according to lead study author Dr. Elinore Kaufman. (LA Times)

REQUIRED READING

Amazon’s Tough Road In Bankingby Aaron Pressman

256 Women Make World’s Billionaires Listby Natasha Bach

Here’s How to Triple the Number of Women Managers In Any Companyby Valentina Zarya

A U.S. State Has Passed Its Own Net Neutrality Lawby David Meyer

Produced by Sy Mukherjee
@the_sy_guy
sayak.mukherjee@fortune.com

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