The Pharmaceutical Industry at a Glance Nationalities of the top pharmaceutical companies in terms of global sales
-Trends for 2021

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Akira Nakao, Senior Researcher, Pharmaceutical and Industrial Policy Research Institute

Introduction

The Pharmaceuticals and Industrial Policy Research Institute (PIIPRI) surveys the basic ^{patents1) of} each of the top 100 pharmaceutical products in terms of global sales, and investigates and reports on the companies that created the drug at the time the invention was ^made2). This year's report examines trends in the nationality of companies in the top 100 drugs in terms of global sales in 2021, and analyzes each nationality with a focus on the companies responsible for the creation of new drugs and the companies that market these products.

Overview of the Top 100 Products in terms ^{of sales3)} in 2021

According to IQVIA World Review Analyst 2022, the pharmaceutical market in 2021 was $1,439.5 billion, up 10% from the previous year. Total sales of the top 100 pharmaceutical products (hereafter referred to as "top products") were $485.1 billion, representing a market share of approximately ^34%4).

Looking at the ATC code level 1 classification of the top 100 drugs, antineoplastics and immunomodulators (L) were the most common category with 34 drugs, an increase of 2 drugs from the previous year, as was the case in 2020. This was followed by gastrointestinal and metabolic agents (A) with 17 items, down 2 items from the previous year, general systemic anti-infectives (J) with 12 items (down 1 item from the previous year), and central nervous system agents (N) with 11 items (down 1 item from the previous year) (Figure 1 left). In terms of sales by therapeutic class, sales of anti-cancer/immunomodulatory drugs were the highest at $189.9 billion, an increase of approximately $20 billion from the previous year (Figure 1, right). As in the previous year, sales in this drug category accounted for 39% of the top item sales.

In the technical categories of active ingredients (synthetic chemical ^{drugs5) andbiopharmaceuticals6)}, there were 53 synthetic chemical drugs and 47 biopharmaceuticals, an increase of two biopharmaceuticals over the 2020 survey (55 and 45, respectively). In addition, biopharmaceuticals accounted for 54% of top-line sales at $262.7 billion, up 1 percentage point from 2020 (Figure 2).

Number of medicines by nationality of companies creating medicines in terms of patents

The number of patents for each of the top drugs is shown in a pie chart (Figure 3). The nationality of the creating company to which the rights to the pharmaceutical product are attributed is the nationality of the applicant/assignee company listed in the above patent, but if there is a parent company at the time of application, the nationality of the creating company is the country where the parent company's headquarters is located. This is because we considered the contribution of the parent company in terms of resources such as human and financial resources in the process of inventing key substances, applications, technologies, and other elements.

The results of the 2021 survey showed that the United States ranked first (47 products), followed by Switzerland and the United Kingdom (both 11 products), Japan (9 products), Denmark and Germany (both 8 products), France (2 products), and Belgium, Hungary, Italy, and Sweden (1 product each). Ten items were replaced between 2020 and 2021, with details: the U.S. up 2 and down 4, Switzerland up 1, the U.K. up 2, Japan up 1 and down 1, Denmark up 2 and down 1, Germany up 1 and down 1, Hungary up 1, and Sweden down 1. Hungary was ranked for the first time in the survey for the tenth time since the 2003 survey. On the other hand, Australia and Israel, which each had one item ranked in 2020, were not ranked in this survey.

Number of Pharmaceuticals by Nationality of Pharmaceutical Creation Companies Yearly

Compared to the results of the previous survey conducted since ²⁰⁰³⁷⁾, there was no significant change in the trend in this year's survey, with the U.S. remaining the largest producer of pharmaceuticals. In the previous year's survey (2020), Japan and the U.K. were in third place, followed by Switzerland in second place, but this time the U.K. has moved out of the top five, along with Switzerland, and Japan has dropped to fourth place. Germany and Denmark, in fifth place, both have eight products, and are closing in on Japan, which is in fourth place with nine products (Figure 4).

Number of Pharmaceuticals by Nationality by Technology Category

As mentioned earlier, the technical classification of active ingredients in 2021 shows 53 products as chemically synthesized pharmaceuticals and 47 as biopharmaceuticals. Figures 5 and 6 show the number of pharmaceuticals by nationality.

The United States, the largest pharmaceutical producer, has 28 synthetic chemical drugs and 19 biopharmaceuticals out of 47, Switzerland has 10 biopharmaceuticals and 1 synthetic chemical drug out of 11, and the United Kingdom, the second largest, has 8 synthetic chemical drugs and 3 biopharmaceuticals out of 11. The contents of these products differed greatly depending on the nationality of the company. The same was true for Denmark and Germany, which ranked fifth, with all eight products being biopharmaceuticals, while Germany had five synthetic chemical pharmaceuticals and three biopharmaceuticals. Although there was an increase of one synthetic chemical and a decrease of one biopharmaceutical, the number of products was the same as in the previous year.

Percentage of global sales of top products by nationality

Figure 7 shows the percentage of top-selling drugs by nationality in the total global sales of top-selling drugs. The U.S. accounted for 51% of sales of 47 top-selling products, the same percentage as the previous year. Japan accounted for 9% of sales with 9 products, while Germany accounted for 16% of sales with 8 products, more than Japan. Germany has four products in the top 10 in terms of sales, and their contribution is considered to be significant. This is thought to be due to the fact that all of the 8 products are biopharmaceuticals in their technical classifications, and that the top-selling classifications, A and L, account for the majority of the ^sales8).

Number of drugs by nationality of main sales companies

Figure 8 shows the number of products by the nationality of the main sales company. The nationality of the main sales company here refers to the nationality of the company with the largest amount of product sales when multiple companies sell a single product in IQVIA's data. The United States (48 products), which increased by 2 products from 2020, was the most prominent, as was the nationality of the company that created the product, followed by Switzerland (14 products), which increased by 1 product from 2020. The sixth largest country is Germany, with a decrease of one item from 2020, followed by France, Belgium, and Canada, with 4, 2, and 1 items, respectively, while Australia and Israel disappear from the graph.

In 2021, there were 9 drugs of Japanese origin, while the number of drugs marketed by the main Japanese distributor was 7. 4 of the 7 drugs were self-designed, while the remaining 3 were of US origin, which were acquired through product introductions or acquisitions. Four of the nine Japanese-origin drugs were marketed primarily by the company itself, while the remaining five were marketed primarily by U.S. companies (one) or European companies (four). As in the previous ^survey2), more than half of the Japanese-origin medicines are dependent on overseas companies for their overseas sales (Fig. 9).

Number of drugs by nationality of applicant (company)

As mentioned in the previous section, when determining the nationality of the company that created the key element, the nationality of the parent company at the time of filing the patent application is adopted if the company has multinational operations. On the other hand, examining the nationality of the company that actually found the key element may help us to know in which country the actual "place of drug discovery" is located. Figure 10 shows the results of tabulating the top items by the nationality of the applicant's company. The second highest number of products was Japan and the U.K. The U.K., which had 9 products in the 2020 survey, increased by one product in this survey to 10 products, along with Japan. The fourth largest country is Germany and Denmark, which increased by one item from seven in 2020 to eight, along with Germany. Switzerland has 11 products in the survey based on the nationality of the parent company, but 3 in the survey based on the nationality of the applicant, a trend unchanged from two years ago in the 2019 survey. In the case of Switzerland, it appears that the 'key' elements of the patents are invented by affiliated companies located outside the country, which may be due to the early inclusion of companies with the potential to create the top items.

Drug Discovery Leaders in the Top 100 Pharmaceuticals by Sales

In the "Policy Research Institute News No.55" and "Policy Research Institute News No.64," Murakami and Shibukuchi reported a survey on the leaders of products ranked in the top 100 pharmaceutical products in terms of global ^sales9)10). The former reports transition data on the bearers of the top products in each year for the four years 2003, 2008, 2013, and 2017, while the latter reports on the cumulative total of the top products newly ranked within the top 100 for the seven years from 2014 to 2020.

The former classifies the players as "Pharma," "Biotech," and "Academia," and defines Biotech as "Biotechnology," a company classified by EvaluatePharma. The latter classified the biotechs as "Pharmaceutical," "Venture," "Academia," and "Other," while the definition of "Venture" was based on EvaluatePharma's "Biotechnology" category, which includes companies with annual sales of less than $500 million on the priority date and with patents that have been issued since the date of incorporation. The author has also included a definition of a "venture" in EvaluatePharma's "Biotechnology" as a company with annual sales of less than $500 million on the priority date and less than 20 years from the date of establishment to the priority date.

Using Shibukuchi's definition of "venture" in Policy Research Institute News No. ⁶⁴¹¹⁾, the author investigated the leaders of new drug creation (invention) for the products ranked in the top 100 drugs in terms of sales in 2008 and for the nine years from 2013 to 2021, for a total of 10 years, to determine how the leaders of the top 100 drugs in terms of sales in recent years have changed. We analyzed how the leaders of the top 100 products in terms of sales have changed in recent years.

The following chart shows the number of new drug creation leaders in each of the four categories in 2008 and from 2013 to 2021 (Figure 11), The percentage of pharmaceutical companies decreased in 2013 and 2014, while the percentage of venture companies increased. This result was generally similar to the results of a previous study by ^{Murakami9) , which} used a slightly different definition of company classification. However, after 2014, the proportion of each category remained constant, and in 2021, there were 74 pharmaceutical companies, 20.5 venture companies, 4.5 academia, and 1 other category, maintaining the proportion of pharmaceutical companies at about 3/4 of the total and the proportion of venture companies at about 20%. Of the 85 new products (annual average 10.6) ranked in the top 100 during the eight-year period from 2014 to 2021 starting in 2013, 62 (annual average 7.8) were from pharmaceutical companies and 19 (annual average 2.4) were from ventures. This means that there was an average annual turnover of about 10% in both the "pharmaceutical" and "venture" categories, indicating that there was not much difference in metabolism between these two categories of companies.

Figure 12 shows the top categories of new drug creators in 2021 by the nationality of the parent company. In the U.S., which accounts for 47 of the top categories, venture companies and academia are responsible for the creation of 19 new drugs (19/47, 40%), confirming that venture companies and academia are playing a role in the creation of new drugs. Other countries with products led by venture companies or academia include the United Kingdom (2/11), Japan (1/9), Denmark (2/8), and Belgium (1/1). For the top 100 top-selling products in terms of sales, it can be said that outside the United States, pharmaceutical companies remain the main players in the creation of new drugs.

As Figure 11 shows, since 2014, the share of pharmaceutical companies in the top-selling products has stopped declining, and there has been no increase in the share of venture-originated products. Murakami's previous study further classified "biotech" into "startup biotech" and "established biotech," and found that from 2013 to 2017, the number of "established biotech" origin drugs has been approaching the number of "startup biotech" origin drugs ¹²⁾.

In the definition of this survey, companies that have been in business for more than 20 years from the date of incorporation to the priority date of the main life patent are classified as "pharmaceutical companies. In fact, four companies that created 10 of the 74 "pharmaceutical company"-originated products in 2021 were ranked in the "venture" category for other products in 2008 and 2013-2021. This change in category from "venture" to "pharmaceutical company" may be one of the factors explaining the downward trend in the percentage of "pharmaceutical company" origin items.

According to a survey by the IQVIA Institute, 65% of the global new drug development pipeline in 2021 will come from Emerging Biopharma (EBP) ¹³⁾. ¹⁴⁾ Although the definition of "venture" as a leader in new drug creation is considered similar to that of an EBP, the survey found a discrepancy between the percentage of drugs originating from "venture" companies as a leader in the top-selling products and the percentage of EBPs as a leader in global drug development.

It is not essential to compare the percentage of EBPs in the development stage with the percentage of "ventures" that have already launched top-selling products, but the number of products developed by EBPs began to grow rapidly after 2015-16, and the percentage of EBPs that have not yet been approved or have significant sales as of 2021 is not very large. It is possible that the number of products developed through EBPs began to grow rapidly after 2015-16, and as of 2021, they may not have been approved or may not have achieved significant sales ^growth15). In addition, 23% of the EBPs in 2021 were developed by companies headquartered in China or South ^Korea16), but there are still no drugs of Chinese or Korean origin among the top products, and the number of ventures from countries other than the U.S. that rank among the top products is quite small. More years will be needed to explain this difference.

Relationship between the players in new drug discovery (companies that create new drugs) and the main sales companies

Next, we examined the degree to which the main distributor coincides with the creator of the top 100 products in terms of sales (creator ^companies17), i.e., the recent trend of internal/external manufacture (make or buy) of the top products (Figure 13). The result was that about 60% of the products were made in-house and about 40% were made externally. Figure 14 shows an analysis of the relationship between the main distributor and the company responsible for the creation of new drugs ( ¹⁷ companies that created new drugs) in the top products in terms of sales in 2021, including the company classification and nationality of the company. Nearly half of the products with U.S. nationality originated from "venture companies" or "academia," and almost all of the products with those origins were mainly marketed by other companies (major pharmaceutical companies). On the other hand, most of the items originating from "pharmaceutical companies" with U.S. nationality were mainly marketed by the companies that created them. Items with Swiss, British, and Danish nationalities originated mainly from "pharmaceutical companies," and the companies that created these items were the main distributors of these items.

Japan, on the other hand, shows a similar trend to Germany, with almost all products originating from "pharmaceutical companies," similar to Switzerland, the UK, and Denmark, but about half of the products are sold primarily by other companies.

Summary

In last year's "Pharmaceutical Industry Vision 202118, ^" the number of pharmaceuticals of Japanese origin in the top 100 products in global sales was listed as a candidate KPI, drawing attention to the country's drug discovery capabilities. In addition to the survey on the nationalities of the companies that created the top 100 drugs in terms of global sales, this year's survey also looked at the nationalities of the companies responsible for the creation of these drugs (the companies that created them), as well as the level of agreement between the companies that created them and the main sales companies.

Japan has created 9 of the top 100 drugs in the world in terms of sales, and the number of products has not changed over the past three years, although there have been some comings and goings of products. On the other hand, other countries have been catching up, and Japan, which was once second only to the U.S., has now dropped to fourth place in the ranking.

According to a survey of the leaders in the creation of new drugs, as of 2021, three-quarters of the world's top-selling drugs are produced by pharmaceutical companies, and only about one-quarter are produced by venture companies and academia. In addition, most of these products are of U.S. nationality, and "pharmaceutical companies" are still responsible for the creation of new drugs in the top-selling ^drugs19).

In a survey on the degree of agreement between the company that created the drug and the company that primarily markets the drug, approximately 60% of the drugs were marketed by the company itself, while the remaining 40% were marketed primarily by other companies. In terms of the nationality of the company that created the top-selling products, most of the products created by venture companies in the U.S. were mainly marketed by the world's major pharmaceutical companies. On the other hand, most of the products created by "pharmaceutical companies" were marketed by those companies themselves. In Switzerland, the U.K., and Denmark, the products created by the pharmaceutical companies were mainly marketed by the pharmaceutical companies.

Most of the top nine products in Japan in terms of sales originated from "pharmaceutical companies," and "venture companies" or "academia" did not play a role in the creation of the top products as in the U.S. Furthermore, more than half of the top nine products were sold by other companies. In addition, more than half of the top nine products are marketed by other companies, which means that even if a company creates a top product, it does not go on to market the product itself, as is the case in the U.S., Switzerland, the U.K., and Denmark.

Various measures are currently being taken to make the drug discovery capabilities of "ventures" and "academia" one of the driving forces behind the creation of top products originating from Japan, and it is hoped that these measures will bear fruit in the medium to long term and that Japanese "venture" drugs will be among the top products.

On the other hand, in order for pharmaceutical companies to take the initiative in developing new drugs created by "ventures" and "academia" into top-tier products, in addition to new drugs created by themselves, it is necessary to further enhance their in-house development and marketing capabilities. In addition, if the company does not conduct its own primary sales, but instead consigns the primary sales rights to other companies, it will be necessary to improve the added value of the created product (or introduced product) through intellectual property strategies, etc., in order to increase its attractiveness, assuming out-licensing or collaboration with other companies.

Acknowledgments

We would like to thank Hiroshi Higashi, Senior Research Fellow, and Hodai Okada, Senior Research Fellow, of the Pharmaceutical and Industrial Policy Research Institute, for their cooperation in reviewing and analyzing the data for this study.

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