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How America's Biopharmaceutical Companies Lead in New Medicine Development

Today’s new era of medicine has delivered a stunning array of new treatments for diseases including cancer, rare diseases and autoimmune conditions. From advanced biologics to transformative therapies, such as cell and gene therapy, recent advancements in science have revolutionized our ability to treat, and in some cases cure, some of the most challenging diseases.

Each new medicine and therapy brings renewed hope to patients and their families; however, the journey to get there is often long, complicated and requires significant investment. To help address these challenges, in recent decades, the United States has developed an innovation ecosystem that relies on a network of partnerships between private industry, government and academia, as well as a supportive policy framework that provides strong intellectual property protections to balance risk. 

Every player in the U.S. innovation ecosystem is important, but America’s biopharmaceutical companies conduct the vast majority of R&D to discover new medicines.

The innovation ecosystem in the United States is built on a network of partnerships among government, academia and the private sector. Generally, most organizations fall into one of three categories: 

Government-funded research institutions, including the National Institutes of Health (NIH): Usually, government-funded research seeks to probe questions at a foundational level—questions like “What are the genetic drivers of disease?”, “Is this disease associated with the unnatural buildup or disappearance of an important protein?”, or “Is this disease influenced by a particular enzyme?” Importantly, while knowing the answers to these questions can help guide researchers as they investigate potential new treatments, it is only the first step. It still takes years and substantial financial investment to translate that understanding into an effective new medicine.

Academia: Most academic research is incentivized by the possibility of publishing findings in a scientific journal, an important aspect of the academic field. While valuable for generating new knowledge, this research usually takes place in the earliest phases of studying a disease and stops short of explaining how any insights might be developed into viable new medicines. 

Biopharmaceutical companies: Building on early-phase research taking place within the industry and among the external partners listed above, biopharmaceutical companies are unique in the substantial risk they take on to translate foundational understandings into a viable new medicine for patients. To do this, companies utilize experts in disciplines like medicinal chemistry, process chemistry and formulation, and drug metabolism and pharmacokinetics—essentially, how a potential medicine interacts with the human body—to understand if an identified drug target can be modified by a compound that will provide a clinical benefit to patients. As detailed below, this has several implications for how much risk large biopharmaceutical companies take on, their level of investment and the role they play in manufacturing.

From taking on substantial risk to researching and implementing the most cutting-edge manufacturing technologies, America’s biopharmaceutical companies take on a unique leadership role in the U.S. innovation ecosystem.

Large biopharmaceutical companies take on substantial risk: Because there is no guarantee that the significant investment of time and effort often needed to discover a new medicine will ever yield an effective therapy, biopharmaceutical companies assume substantial risk in the process. Less than 12% of new molecular entities that enter clinical trials eventually receive U.S. Food and Drug Administration (FDA) approval.

Large biopharmaceutical companies take the lead in investment of R&D: America’s biopharmaceutical companies conduct the vast majority of R&D to discover new medicines. In fact, the entire biopharmaceutical industry’s R&D investment in the U.S. is $97 billion a year compared to the entire National Institutes of Health (NIH) budget of $32.6 billion—only a small portion of which is focused directly on drug research.

Large biopharmaceutical companies must manage an ever-changing manufacturing environment: To keep pace with the evolving treatment landscape, biopharmaceutical companies constantly research, develop and adopt new technologies and processes, such as continuous manufacturing, high-volume cell processing, and advanced purification, preservation and distribution modes, all of which are key to ensuring the safety and efficacy of new medicines. As a result, biopharmaceutical companies are responsible for 81% of manufacturing milestones and outpaced all other manufacturing sectors in economic growth from 2000-2016. 

Appreciating the broader ecosystem of new medicine development

Every player in the U.S. innovation ecosystem has an important role to play, but America’s biopharmaceutical companies play a clear leadership role in the development of new treatments and cures. As policy debates in Washington continue regarding the future of biomedical R&D, it’s critical we don’t lose sight of the vitality of the current drug discovery and development ecosystem that has helped make the United States the global leader in medical innovation.  

Learn more about the U.S. innovation ecosystem: 

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