For decades, R&D productivity was on the decline in the biopharmaceutical industry. It reached its nadir in 2008, with the industry as a whole failing to earn a return on its R&D investments. The fortunes of the industry have since changed dramatically, and 2014 stands out as a record year in terms of approvals for new drugs by the U.S. Food and Drug Administration (FDA). In addition, the overall value of approved drugs continues to show a strong upward trend.
The FDA approved a staggering 53 new therapeutic drugs (NTDs) in 2014—or approximately 4 per month—surpassing the previous high-water mark of 51 set in 1996. (See Exhibit 1.) In terms of what matters—value rather than the number of approvals—estimated peak sales of NTDs approved in 2014 totaled $48 billion. While down 9 percent from peak sales of such drugs in 2013, this is well above the 25-year average of $36 billion per year. In aggregate, sales in 2014 clearly continued the positive trend that began in 2008. Furthermore, $48 billion likely represents a conservative estimate.