The Pharmaceutical Industry at a Glance Review of the survey on the nationalities of the top pharmaceutical companies in terms of global sales From the Perspective of Dynamic Transition of Number of Products and Leaders in Drug Discovery

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Tomoyuki Shibuguchi, Senior Researcher, Pharmaceutical Industry Policy Institute

Introduction

As Nakao reported in this issue of Policy Research Institute News, we have been continuously surveying and reporting on the nationality of companies that create the world's top-selling pharmaceutical products since ^20131). The results of this survey have been used in various policy documents, and in particular, ^the Pharmaceutical Industry Vision 20213 announced by the Ministry of Health, Labour and Welfare in September of this year was not only used as reference material, but also as one of the proposed KPIs for follow-up of the pharmaceutical industry policy, such as "the number of Japanese origin drugs in the top 100 global sales" and "the number of Japanese origin drugs in the top 100 global sales". The results of this survey are of great interest to the Japanese pharmaceutical industry, as "the number of pharmaceuticals of Japanese origin in the top 100 global sales" is one of the proposed KPIs for follow-up of pharmaceutical industry policy.

In this report, we look back at the results of the fixed-point survey from 2013 to 2020 to understand the characteristics of this survey and to examine Japan's ability to create new drugs.

Research Methods

Using the 2013-2020 ^{results1, 2)}, this report analyzes the nationality of the company that created the new drug from two perspectives: "nationality of the parent company" and "nationality of the applicant.

Products ranked in the top 100 products in terms of sales from 2013 to 2020 (178 products)

During the eight-year period from 2013 to 2020, a total of 178 products were ranked in the top 100 products in terms of sales based on the IQVIA World Review Analyst (hereinafter referred to as "top 100 products in terms of sales") at least once. Although about 10 items are changed every year, many items have been ranked for multiple years, and the number of items is considered to be limited over the eight years of continuous surveying. Figure 1 shows the results of classification of the 178 items by nationality of the parent company and nationality of the applicant. In the parent company nationality classification on the left side of Figure 1, there are 13 nationalities in total, and Japan (17 items) is in third place after the U.S. (87 items) and Switzerland (22 items) in terms of the number of items. The number of items was 5 fewer than that of Switzerland, which ranked second, a result that is different from the situation in previous years, where the number of items has been close. This may be due to the fact that Japan had seven fewer items than Switzerland at the beginning of the 2013 survey.

In the nationality classification of the applicant shown on the right side of Figure 1, the total number of nationalities is 15, which is two more than the nationality classification of the parent company. In this classification, the United States (90 items) was followed by Japan (18 items) in second place and the United Kingdom (15 items) in third place. Switzerland ranks fourth (14 items) after the U.K. The trend is similar to the parent nationality classification, but there are differences in the number and ranking of some items, such as Switzerland. This is the result of finding key elements of products in subsidiaries and affiliated companies in countries other than the country where the company is headquartered, and the actual "place of drug discovery" is considered to have been outside of Japan. Japan's second place in this category indicates that it has a global presence as a "place for drug discovery.

China, which has been attracting attention in recent years for its market size and R&D investment, was not included in this survey, and Japan was the only Asian country ranked in both categories. As previously ^reported4), the number of clinical development items by Chinese pharmaceutical companies is rapidly increasing, but most of them are developed only in China, and global development is limited. On the other hand, it is clear that the number of items under global development is also increasing, and trends should be monitored closely in the future.

Nationalities of companies that created products ranked after 2014

As mentioned in the previous section, some of the top-selling products have been on the list for multiple years, and some products have been approved or launched for a long time. Therefore, we focused on newly ranked items from 2014 onward, using 2013 as the base year. Since newly ranked drugs tend to be relatively new in terms of approval and launch dates, we thought it would be possible to measure the "ability to create new drugs" in recent years by tracking the nationality of companies that created these drugs and the transition of these drugs.

In the seven years since 2014, 76 new drugs have been ranked among the top drugs in terms of ^sales5), with an average of 11 new drugs entering the list each year. First, the percentage of nationalities of the creating firms is shown in Figure 2. In the parent company nationality classification on the left side of Figure 2, the total number of nationalities was 11, which is lower than the result on the left side of Figure 1. On the other hand, in terms of the number of products, Japan ranked second (9 products) after the U.S. (38 products), which is more than Switzerland (7 products), which ranked fourth. As mentioned in the previous section, this may be due to the fact that Japan had fewer items than Switzerland in the 2013 results. The number of nationalities in the applicant nationality classification on the right side of Figure 2 is also lower than that on the right side of Figure 1 (11 nationalities), indicating that only a limited number of nationalities are capable of creating products that rank among the top products in terms of sales. The trend in the number of items is similar to that in the right side of Figure 1, with Japan in second place (10 items) after the U.S. (41 items), followed by the U.K. (6 items), Switzerland, and Germany (4 items). Compared to the parent nationality classification, the number of items in Switzerland and the U.K. decreased.

Figure 2 shows the total as of 2020, and Figure 3 shows the dynamic transition. For the sake of clarity, the graph is limited to the five countries with the largest number of items: the U.S., Japan, the U.K., Switzerland, and Germany. In both categories, the U.S. has consistently added an average of 5 to 6 items each year. Japan's trend remained the same in both classifications, with additions every year through 2017, but stagnating after 2018. In Germany as well, there was no significant difference between the two categories, indicating that in Japan and Germany, key elements of each item were being invented within those countries. On the other hand, in Switzerland and the U.K., the nationality classification of the parent company (left side of Figure 3) shows that items have been added regularly since 2017, and as of 2020, they were within one or two items of Japan. On the other hand, when looking at the applicant nationality classification (Figure 3, right), the increase is not as large as that shown in the left figure, suggesting that the key elements of each item were invented in countries other than the respective countries.

Nationality of the company that created the globally approved NME

In the previous section, we focused on the nationalities of the companies that created the items newly ranked since 2014, and found that Japan created the second largest number of items in both the parent company and applicant nationality classifications. On the other hand, a look at the annual trends reveals that the number of new drugs created by Japan has been stagnant in recent years. Does this indicate that Japan's ability to create new drugs is declining? To examine this point, we decided to look at the number of new drugs approved globally in recent years.

In the ISSP News No. 62, we reported on the nationalities of the companies that created the New Molecular Entity (NME) products approved in Japan, the U.S., and Europe. In that report, we reported on the nationalities of companies that created NMEs first approved in Japan, the U.S., and Europe in 2010 or ^later6). Figure 4 shows the data rewritten as a cumulative annual trend, and the nationality of the applicant is also analyzed again. As shown in the supplement, it takes about 3 to 4 years from the date of first approval for a product to be ranked among the top products in terms of sales. Therefore, it would be useful to understand the situation from 2010 to 2019, not only to determine the past status, but also to determine the future outlook.

In terms of parent company nationality classification (Figure 4 left), Japan (35 items) is in second place after the United States (166 items), but a look at the trends shows that the rate of increase has been slower since 2015 (26 items to 35 items) than before that year. On the other hand, there was no significant difference in the increase in the number of items compared to Switzerland (from 16.5 items to 26.5 items) in third place and the United Kingdom (from 16 items to 25 items) in fourth place. The same is true for the nationality of the applicant, with Japan (27 items → 37 items) continuing to create a certain number of items each year since 2015. Thus, from the perspective of the number of approved items, the number of items of Japanese origin was not considered to be falling. The fact that the results in Figure 4 are similar to those in Figure 3 suggests that the number of globally approved products itself is one of the factors that rank among the top products in terms of sales.

Considerations from the Nationality Survey of Major Sales Companies

Although we could not confirm a decrease in the number of products of Japanese origin in terms of globally approved products, we would like to continue our discussion on the stagnant trend in the number of products ranked among the top products in terms of sales. Since this data was compiled based on "sales," the sales strategies of each company may have had a considerable impact. Since sales strategies of each company are not the main focus of this report, we do not wish to discuss them in depth, but we have focused on the "nationality of the main sales company" from among the data collected so far. The nationality of the main sales company refers to the nationality of the company with the largest amount of product sales when multiple companies are selling a single product in IQVIA's data. Figure 5 shows the breakdown of the nationalities of the nine products of Japanese origin ranked in the 2014-2020 period. 6 of the 9 products of Japanese origin ranked in the 2014-2020 period were sold mainly by overseas companies in the world, suggesting the need for collaboration with overseas companies in order to achieve larger sales. As pointed out in Nakao's News ¹⁾, item sales in the top 100 in terms of sales are getting higher year by year, and the hurdle to be ranked in the top 100 is getting higher. Although the number of globally approved products is increasing, the fact that they are not ranked in the top 100 in terms of sales suggests that there is an issue in terms of increasing the size of products. From the viewpoint of new drug creation, it is necessary to enhance the attractiveness of Japan-origin products as a "place for drug discovery" in order to continue creating new drugs, but from the viewpoint of top-selling products, it is also necessary to strengthen overseas ^{development7)}.

Leaders in the creation of top-selling products

Recently, startups such as drug discovery ventures are said to be the main players in the creation of new drugs, and it is said that 80% of clinical development products originate from ^startups8). In considering how to continue to create new drugs originating in Japan, we surveyed these players in the creation of new drugs. Murakami's analysis of the top-selling products shows that the contribution of drug discovery activities by biotechs, which create drugs based on novel drug discovery platform technologies, is steadily ^increasing9). Based on Murakami's news, the 76 drug discovery companies were classified by nationality (Figure 6). Among the companies classified as "Biotechnology" based on EvaluatePharma's company classification, those with annual sales of less than US$500 million on the patent priority date and those established less than 20 years after the patent priority date were classified as "Venture" companies. Companies classified in other categories (Global Major, Regional Major, Specialty, etc.) were classified as "Pharmaceutical Companies," universities were classified as "Academia," and those that did not belong to any of these categories were classified as "Others.

Figure 6 shows that 13 out of 38 (34%) of the 38 products in the U.S. (left panel) were venture-originated, indicating that venture companies are already playing a role in the creation of new drugs in the U.S., even in the limited case of the top-selling products. On the other hand, in Japan, 8 out of 9 (89%) of the drugs were originated by pharmaceutical companies, and one drug from academia was ranked in the list, but there was no drug from a venture company. In European countries, as in Japan, most of the products originated from pharmaceutical companies, but there were a few products that originated from venture companies. The nationality of the applicant (right figure) was similar to that of the parent company, but the number of items originating from U.S. pharmaceutical companies increased. This suggests that pharmaceutical companies that do not have their headquarters in the U.S. are creating new drugs from affiliated companies that have research bases in the U.S. This indicates the high capacity for new drug creation in the U.S., not only for venture companies but also for pharmaceutical companies.

In addition, the acquisition of venture companies may also increase the drug discovery capability of the pharmaceutical companies themselves, suggesting that the contribution of venture companies to the creation of new drugs may be higher than the results shown in Figure 6.

Japan's ability to create new drugs

The results of the previous section suggest the necessity of fostering drug discovery ventures as new players in new drug creation in order to maintain and improve the ability to create new drugs in Japan. In addition, the high capacity of pharmaceutical companies to create new drugs, as in the U.S., should not be overlooked, and it seems necessary to enhance their attractiveness as "places for drug discovery.

As shown in Figure 6, some items in Japan originate from academia, and there are many cases where industry-academia collaboration with academia has led to the creation of new drugs. Table 1 summarizes representative examples of industry-academia collaborations that have led to the creation of new drugs in Japan. While the content of the collaboration ranges from the drug discovery stage to the promotion of clinical research, it is clear that basic research conducted by academia has made a significant contribution to the creation of new drugs. Some of these products have large sales, and one of the keys to Japan's ability to create new drugs in the future will be to maintain and improve the advanced basic research capabilities of academia and increase its attractiveness as a "place for drug discovery.

Support for basic research by academia, especially research that leads to fundamental treatments such as elucidation of disease mechanisms, requires not only financial resources but also the development of a data infrastructure in the field of health and medicine, which is essential for research on diseases, and the promotion of its utilization. Since human information is essential for research on human diseases, and omics data including genomes and actual medical information are basic data for disease elucidation, the development of an environment to promote the utilization of such data was considered an urgent issue.

The enhancement of basic research by academia and the enrichment of its research results is one of the important factors for promoting the start-up of drug discovery ventures, and it is expected that collaboration and open innovation with the healthcare industry, including pharmaceutical companies, both in Japan and abroad, will progress in Japan.

Summary

Since 2013, the National Institute for Policy Studies (NIPR) has conducted an annual survey of the nationalities of the top 100 pharmaceutical companies in the world, with Japan ranking second or third in terms of the number of pharmaceuticals sold each year. This year, we conducted a survey on the number of products, dynamic transition, and players based on the past fixed-point survey. The survey focused on newly ranked drugs since 2014 in order to measure "new drug creation potential," and found that Japan ranks second only to the U.S. in the number of drugs. Japan is the only country in the Asian region with drug discovery capabilities, and it is believed that Japan is demonstrating its presence as one of the limited countries in the world with drug discovery capabilities.

On the other hand, the environment surrounding drug discovery continues to change with the spread of new modalities and the increasing contribution of drug discovery ventures to the creation of new ^drugs9. In Japan, the key to improving drug discovery in the future lies in fostering and supporting drug discovery ventures as well as strengthening the basic research capabilities of academia, such as elucidating disease mechanisms. In addition, human disease data is essential for elucidating disease mechanisms, and the development of a data infrastructure in the medical and health fields and the promotion of its utilization are desirable.

It is said that it takes 9 to 16 ^years11) to create a new drug, starting from basic research, and as indicated in the supplement, it takes about 15 to 16 years from the filing of a patent application for a new drug to be widely used in the world. The creation of a new drug is not something that can be done overnight, but requires a steady accumulation of science. In order for Japan to continue to lead the world in drug discovery, it is hoped that an environment will be created to foster the industry from a long-term perspective.

Supplement: Time required to rank among the top products in terms of global sales

This survey covers the top products in terms of global sales in each year, but to find out how long it takes for these products to appear in this ranking, we examined the date of first global approval (the earliest date of approval in Japan, the U.S., and Europe) and the period from the priority date indicated in the basic patent for products ranked in 2014 and later (see the figure below). (see figure below). The ranking date is December 31 of each year. The median, mean, and standard deviation (SD) for each period are shown in the table (right) and the graph connecting the median values (left). The graph on the left shows that the time from the priority date to the rank-in date is 15.3 years, 10.5 years, and 3.6 years, respectively. As can be seen in the graph on the left, the results for all indicators remained generally unchanged. The number of years from the date of first approval to the date of inclusion in the ranking is considered to be a reference value due to the large variation in the number of years.

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