Pharma Trends: Fewer New Products, More Generics

Nov. 2, 2012
Structural and other trends characterize pharmaceuticals now, says Jamie Hintlian, vice president for pharmaceuticals at Aspen Technology Inc. (, Burlington, Mass.

A structural trend Hintlian sees is companies looking at their core competencies and differentiating themselves along strategic differences—for example secondary manufacturing’s filling, packaging and distribution of final product. “The rise of contract manufacturing and contract research organizations is clear,” he adds.

Another trend Hintlian sees is a decline in approvals for new products. This is symptomatic of drug pipelines also getting smaller, he says. “Companies—Big Pharma—are not making the same level of investment in the small-molecule [pharmaceutical] area [as they once did].”

But that’s’ not to say they’ve given up entirely, Hintlian explains. “They’re being more efficient with modeling than during experimentation with chemicals. They’re more integrated, flatter organizations.”

An ongoing trend Hintlian sees is the rise of generics. “Over the next four to five years or so, it’s anticipated that $140 billion of branded drug sales will be facing generic competition.” He notes that this year and next year will see the highest level of patent expirees. “About half of today’s top products face generic equivalents.” Overall, the reduction in prices would be dramatic, he predicts. “It could be that half to two-thirds of prices go away.”

Already generics hugely affect consumers. “As recently as 2010, 75 percent of American prescriptions were filled with generics,” Hintlian says. That’s driven Big Pharma to establish relations with generics companies, he says. And he notes branded generics, seen sometimes in emerging markets, give an extra sense of quality and safety to consumers.

C. Kenna Amos, [email protected], is an Automation World Contributing Editor.

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