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Billions of taxpayer dollars go into the creation and marketing of new drugs. The Los Angeles Times reports that, “Since the 1930s, the National Institutes of Health has invested close to $900 billion in the basic and applied research that formed both the pharmaceutical and biotechnology sectors.” Despite taxpayers’ crucial investment, U.S. consumers are increasingly paying more for their prescription drugs. A 2018 study on the National Institute of Health’s (NIH) financial contributions to new drug approvals found that the agency “contributed to published research associated with every one of the 210 new drugs approved by the Food and Drug Administration from 2010–2016.” More than $100 billion in NIH funding went toward research that contributed directly or indirectly to the 210 drugs approved during that six-year period. The NIH Research Project Grant (R01)—which supports health-related research—was by far the most common kind of grant used to fund the science that supported the new drugs. In all, NIH gave out nearly 118,000 R01 grants related to those drugs from 2010 to 2016.

When patents are deployed to specifically extend monopoly power, there are significant economic consequences. First, it keeps drug prices artificially high for longer periods, which strains the budgets of patients, taxpayers, and the health care system. Second, it diverts R&D resources away from truly innovative research and toward defensive patenting activities. Third, the outsized profits enabled by extended monopolies may reduce the industry’s incentive to invest in the high-risk, high-reward research needed to develop breakthrough therapies.

Moreover, the anticompetitive practices employed by pharmaceutical companies undermine the intended purpose of the patent system, which is to promote innovation by providing a limited period of exclusivity in exchange for public disclosure of the invention. When companies abuse the patent system to prolong monopolies, they do not contribute to the public store of knowledge or spur follow-on innovation. Instead, they create barriers to entry that stifle competition and deny patients access to affordable medicines.

Moreover, pharmaceutical companies receive substantial U.S. government assistance in the form of publicly funded basic research and tax breaks, yet they continue to charge exorbitant prices for medications. But the issue goes beyond cost. In America, more than 1 million individuals suffer from Type 1 diabetes, a condition where the body cannot make insulin, which is essential for getting glucose (also known as blood sugar) into cells from the bloodstream. Without insulin, glucose accumulates in the bloodstream, causing dangerously high blood sugar levels. Among all Americans suffering from diabetes, at least 1 in 45 have said that they engaged in insulin rationing—a tactic of using less insulin than is needed in order to make the doses last longer—as a direct result of the skyrocketing price of the drug. A vial of insulin, which is the only life-sustaining option for Type 1 diabetics, retails at around $300. A 2018 study commissioned by the Congressional Diabetes Caucus found that the price of insulin has doubled since 2012; in the 10 years prior, the price of insulin nearly tripled. Despite the dangers of insulin rationing, which can lead to diabetic ketoacidosis, a fatal condition, many Americans have no other choice. That was the case for Antroinette, whose daughter was rationing insulin due to the high cost and died at the age of 22 as a result.

There is a lot of talk about the dangers of counterfeit medicines these days and, indeed, counterfeit drugs are dangerous things. But, says in a new report today, the war on fake drugs in the developing world is being waged in a way that may suit the big pharmaceutical companies but poses very grave dangers to the health of the poor. Fake drugs and sub-standard drugs, such as antibiotics with too little of the active ingredient to do any good, are sold all over the developing world. They can do real harm, but the strategy against counterfeits will not stop much of that trade, according to Oxfam, because its focus is to strengthen the patent system. Patents prevent legal copies of new drugs from being made for a period of up to 20 years - but many of the fake and sub-standard drugs going around in Africa and Asia are not in patent anyhow. Oxfam says rich countries, which are pushing for stronger patents in the interest of the pharmaceutical companies which contribute to their GDP, should instead be helping poor countries to strengthen their drug regulatory and policing systems. This is how Rohit Malpani, senior policy adviser, puts it: Poor countries are facing a crisis of substandard and falsified medicines that can harm or even kill those who take them. Yet rather than help poor countries address the problem to ensure safe, effective and quality medicines for all, rich countries are putting commercial interests ahead of public health in these countries. The European Union and the United States continue to focus almost exclusively on eliminating counterfeit medicines which form only a small part of this public health problem – but which are a serious concern for their multinational companies. They have used the crisis in medicine quality in developing countries as an excuse to push for new intellectual property rules that will boost the profits of pharmaceutical giants at the expense of affordable medicines for the poor. Oxfam is particularly critical of the European Union, but also of the World Health Organisation. There is confusion between counterfeits and generics - legally-made, cheap copies of medicines that, particularly in the case of Aids drugs, have saved lives in the developing world. A WHO-led initiative called is unclear on the difference between them. The report says: Generic medicines are vital to the health of the poor. Enforcing patents, in a way that might restrict their manufacture, will do more harm than good, says Oxfam. Instead, developing countries should be helped to strengthen their own monitoring and regulation so that the drugs their citizens use are safe and effective. IMPACT proposes an expansive definition of counterfeit medicines that confuses counterfeits and generic medicines, and over-emphasises police action to ensure the safety and efficacy of medicines. At the same time, the multinational pharmaceutical industry has exerted pressure on individual countries, such as Kenya and Thailand, to change their national laws and law enforcement priorities in ways that endanger access to generic medicines. Generic medicines are vital to the health of the poor. Enforcing patents, in a way that might restrict their manufacture, will do more harm than good, says Oxfam. Instead, developing countries should be helped to strengthen their own monitoring and regulation so that the drugs their citizens use are safe and effective.

There is a lot of talk about the dangers of counterfeit medicines these days and, indeed, counterfeit drugs are dangerous things. But, says Oxfam in a new report today, the war on fake drugs in the developing world is being waged in a way that may suit the big pharmaceutical companies but poses very grave dangers to the health of the poor. Fake drugs and sub-standard drugs, such as antibiotics with too little of the active ingredient to do any good, are sold all over the developing world. They can do real harm, but the strategy against counterfeits will not stop much of that trade, according to Oxfam, because its focus is to strengthen the patent system. Patents prevent legal copies of new drugs from being made for a period of up to 20 years - but many of the fake and sub-standard drugs going around in Africa and Asia are not in patent anyhow. Oxfam says rich countries, which are pushing for stronger patents in the interest of the pharmaceutical companies which contribute to their GDP, should instead be helping poor countries to strengthen their drug regulatory and policing systems. This is how Rohit Malpani, senior policy adviser, puts it: Poor countries are facing a crisis of substandard and falsified medicines that can harm or even kill those who take them. Yet rather than help poor countries address the problem to ensure safe, effective and quality medicines for all, rich countries are putting commercial interests ahead of public health in these countries. The European Union and the United States continue to focus almost exclusively on eliminating counterfeit medicines which form only a small part of this public health problem – but which are a serious concern for their multinational companies. They have used the crisis in medicine quality in developing countries as an excuse to push for new intellectual property rules that will boost the profits of pharmaceutical giants at the expense of affordable medicines for the poor. Oxfam is particularly critical of the European Union, but also of the World Health Organisation. There is confusion between counterfeits and generics - legally-made, cheap copies of medicines that, particularly in the case of Aids drugs, have saved lives in the developing world. A WHO-led initiative called IMPACT (International Medical Products Anti-Counterfeiting Taskforce) is unclear on the difference between them. The report says: IMPACT proposes an expansive definition of counterfeit medicines that confuses conterfeits and generic medicines, and over-emphasises police action to ensure the safety and efficacy of medicines. At the same time, the multinational pharmaceutical industry has exerted pressure on individual countries, such as Kenya and Thailand, to change their national laws and law enforcement priorities in ways that endanger access to generic medicines. Generic medicines are vital to the health of the poor. Enforcing patents, in a way that might restrict their manufacture, will do more harm than good, says Oxfam. Instead, developing countries should be helped to strengthen their own monitoring and regulation so that the drugs their citizens use are safe and effective.

The American patent system has, since our nation’s founding, served as a cornerstone of innovation. But the pharmaceutical industry’s willingness to undermine this system is having real consequences for American patients.

The skyrocketing cost of health care has been fueled by rapidly rising prescription drug prices, which are  for Americans than patients in other wealthy countries. While some argue that this is just the cost of being a global innovator, it is more complicated than that, and a key source of the problem is the abuse of the patent system.

Despite these taxpayer subsidies, prescription drug prices are nonetheless increasing at an alarming rate. In 2019, price increases from drug manufacturers affected more than 3,400 drugs. For example, Allergan, a major pharmaceutical manufacturer, raised prices on 51 drugs, just more than half its portfolio. Some medications that Allergan manufactures saw a 9.5 percent jump in cost, while others saw a 4.9 percent increase in cost.27 Teva Pharmaceutical Industries Ltd., the largest generic drug manufacturer in the world, increased its drug prices by more than 9 percent.28 These sharp increases in price occur as companies continue to report millions of dollars in revenue. In 2018, Allergan reported $15.8 million29 in revenue, while Teva Pharmaceuticals reported $18.8 million30 in revenue.

Pharmaceutical companies’ profit margins receive significant bumps when they launch new drugs, specifically specialty drugs, used to treat life-threatening conditions. These drugs often cost more than most Americans can afford. Pharmaceutical companies have stated that the prices are high because the drugs are difficult to manufacture. In 2013, for example, industry giant Gilead Sciences launched Sovaldi, a hepatitis C drug, at $1,000 per pill, or $84,000 per treatment, which could last 12 to 24 weeks.33 After an 18-month investigation into the company’s pricing, the Senate Finance Committee concluded that Gilead had pursued a marketing and pricing strategy designed to “maximize revenue with little concern for access or affordability.”34

In the competition between brand name pharmaceuticals and their generic counterparts, drug companies use patent gamesmanship to their advantage, one West Virginia University patent expert said. Sean Tu’s primary area of study is patents and how they influence drug prices and innovation. The College of Law professor is researching the ways brand name firms manipulate the patent system to improperly maintain monopoly rights on pharmaceuticals, moves that potentially affect patient welfare. So-called patent thickets are one such strategy, Tu said. “When I teach FDA law, I tell my students there are a billion reasons a year to try to extend a monopoly,” Tu said. “Because these drugs are making tons of money, to protect their profits, drug companies are weaponizing patents. They create large ‘patent thickets,’ which are just multiple patents that cover the same product. These thickets are designed to delay or deter competitors from entering the market.” Between 2000 and 2018 pharmaceutical companies made $8.6 trillion, earning significantly more than most industries, according to Tu. However, once generics enter the market, drug prices can drop by 90%, thereby lowering brand manufacturer profits. One example of a company employing patent thickets is Amarin, which holds more than 100 patents on fish oil. Though the supplement has been around for many years, Tu said this patent thicket makes it harder for generics to enter the market. This is because generic firms will have to consider all of these patents before launching a generic version of the drug. Tu’s findings on the Amarin case were published in the NYU Journal of Intellectual Property & Entertainment Law. Another example is the world’s best-selling drug product, Humira, manufactured by AbbVie with revenues of almost $21 billion in 2021 alone. AbbVie also utilizes patent thickets to protect Humira, an immunosuppressant used to treat conditions like arthritis, plaque psoriasis and Crohn’s disease. “That’s around $57 million a day,” Tu said. “How did they do it? They built up a patent thicket. They have applied for at least 247 patents on Humira and currently possess over 132 patents covering the drug.” A second, sometimes connected, strategy is called evergreening, in which companies serially file patents to extend the life of the product. With Humira, approximately 90% of the patent filings were made after the drug was already on the market. Evergreening and patent thickets are most prevalent in the U.S. market. In Europe, it is difficult to receive multiple patents on the same product, thereby facilitating the market entry of generics or closely related drugs known as “biosimilars.” “In Europe, Humira biosimilars are already on the market and have been since 2018,” Tu said. “So, why can’t we do the same thing here? The U.S. won’t get a Humira biosimilar until 2023. A lot of it is because pharmaceutical firms play these patent games to delay entry or deter entry.” The extensive nature of patent law makes research like Tu’s complicated. “What these firms are doing is completely legal. However, these firms are taking advantage of the patent system and manipulating the system to do things it was never designed to do,” he said. Tu works in collaboration with the Program on Regulation, Therapeutics and Law, part of the Division of Pharmacoepidemiology and Pharmacoeconomics, Department of Medicine, Brigham and Women’s Hospital and Harvard Medical School, where Tu is also a visiting professor. As part of PORTAL, he recently published a paper in the New England Journal of Medicine examining asthma inhaler patents. The patents to the asthma drug albuterol expired in 1989. However, in addition to the drug, patients need the devices that deliver those drugs. After creating new patent thickets directed towards the inhaler delivery devices, drug companies were able to generate an additional $14 billion in revenues. While Tu believes thickets and evergreening give companies an unfair advantage, he does believe in the patenting system in its truest form. “I love the patent system,” he said. “I think it really works for getting innovation out there. It incentivizes the creation of new life-saving drugs, especially in the pharmaceutical field where the R&D costs can be very high. The patent system is there to level the playing field. That’s the good story. But it is currently being used not just to incentivize innovation, it is being manipulated to harm competition, which is the bad story — and not the original intent.” Tu’s knowledge of patent law is extensive, and before coming to WVU, he practiced law at a firm that focused on the biotechnology and pharmaceutical industry. “I wanted to link those two areas of law — patent law and FDA law,” he said. “I understand both the patent end and the science end of these pharmaceutical cases, because I prosecuted a lot of these patents when I was in private practice.” Tu hopes his research will be helpful in West Virginia and nationally. “Everything that I do right now is geared towards patient welfare,” he said. “My goal is to help create a health care system that is safe, effective, patient-centered, timely, efficient and equitable. I’d like to see new, innovative, breakthrough drugs that help patients at an affordable cost. I’d like to have a system that puts patients first.”

The worldwide prescription drug market is growing at 6.5% compounded annually and is expected to reach $1.06 trillion by 2022. Start-ups are driving pharma innovation, accounting for 63% of all new prescription drug approvals over the last five years, HBM Partners reports. Drug companies have established venture capital funds and incubators to invest in promising start-ups working on new drug technologies. Novo Holdings’ recent launch of a $165 million venture fund focused on tackling “superbugs” resistant to modern antibiotics demonstrates the paradigm shift occurring in Big Pharma. Novo’s Repair Impact Fund — Repair stands for Replenishing and Enabling the Pipeline for Anti-Infective Resistance — will invest $20 million to $40 million in start-ups and early stage companies in the United States and Europe that have new approaches to combat bacteria that pose the greatest threat to human health. New approaches to combat antimicrobial resistance urgently need to be developed. Already, more than 700,000 people die each year from infections resistant to most or all antibiotics, and the number is increasing by the day. Antimicrobial resistance is projected to kill more people than cancer by 2050, which would reduce global economic output by between 2 percent and 3.5 percent and severely cripple modern medical and surgical advances. Despite growing recognition of this threat, there is an early stage funding gap for new treatments. To date, Big Pharma companies have not successfully developed a new generation of antibiotics, although last year they set up AMR Industry Alliance, a coalition to monitor the industry’s progress in this field. “This is a huge global problem in need of R&D funding,” said Aleks Engel, partner at Novo Holdings. “But many Big Pharma companies have pulled out of the area in the last 10 to 15 years because they see a challenging ROI.” As he explains, antibiotics are a fraction of sales of drugs in other classes. They would rather wait as upstart biotechs take the risk out of development. The economic challenge the industry faces is undeniable. That’s because the average cost to develop and win marketing and FDA approval for a new prescription drug in the United States is about $2.6 billion, reports the Tufts Center for the Study of Drug Development. Despite high development costs, the majority of drug launches achieve modest sales in the first five years on the market. Only 19 drugs have reached $1 billion in annual sales within five years of launch over the past 20 years, the QuintilesIMS Institute revealed. In response, industry giants like Novo Holdings — which has big stakes in Danish drugmaker Novo Nordisk —Merck, Johnson & Johnson, Sanofi and others are looking to become more entrepreneurial. Increasingly, these big players are setting up venture capital funds and investing in start-ups and licensing technology to fuel their own drug pipelines. Many are also outsourcing R&D, while reducing product development efforts internally. The trend is accelerating at a rapid pace. Behind the scenes, pint-size ventures are driving pharma innovation. The majority of drugs approved in recent years originated at smaller outfits— 63 percent of them over the last five years, according to HBM Partners, a health-care investing firm. The allure is multifaceted. Small biotech start-ups are more nimble, and many can do research and product development faster. By investing in a broad portfolio of young ventures, a big drug company can leverage outside scientific talent and cast a wide net in order to gain access to breakthrough discoveries in areas of the company’s strategic interest. For investors the sheer market size of the industry cannot be ignored. It’s a global market growing at 6.5 percent compounded annually that is expected to reach $1.06 trillion by 2022, HBM forecasts.

The first 13 weeks of a new drug launch determine its success. Once this trajectory is set, it tends to remain throughout the course of the product’s lifecycle. One would think that small- to mid-sized companies commercializing a product for the first time are especially challenged in this regard. The lack of in-house resources alone seemingly tips the odds against them. Interestingly, the recent history of successful drug launches demonstrates that these smaller companies’ launches outperform large pharma. There are many reasons to explain this discrepancy. Most often, small companies create a large target of opportunity, not in terms of sizeable populations eligible for the drug in question but rather the opposite. The rarer the disease, the more capable a company can be in achieving critical mass at launch and sustain it for years to come. The patient populations are more manageable. There’s no need for the cost and complexity of a large salesforce. Furthermore, since there is such an unmet medical need, both healthcare providers (HCPs) and patients are eagerly searching for solutions. Such readiness primes the market with a tailwind, accelerating prelaunch development campaigns. Also, a sizeable percentage of the patient population will likely be recruited for clinical trials, establishing both a KOL endorsement and a significant patient base.

Small companies have the ability to be nimble, benefit from direct involvement of experienced senior leadership, and pursue edgier marketing that pushes the category. With no over-reaching bureaucracy, small companies are nimble by nature. This enables them to quickly pivot based on marketplace demands and also rapidly understand and incorporate FDA guidance. Take the COVID-19 lockdown in 2020: Many smaller companies were able to react to changing guidelines, re-position their products, and change their marketing mix. Often with small companies, the launching brand is their only brand, so these organizations can muster the full force of their constituents in short order. Larger pharma companies tend to be siloed and have a harder time pivoting based on changing market dynamics despite their past experience.

The majority of new drug development now takes place at startups with little to no commercial revenue. Contrary to the claim that raising prices on old drugs drives innovation, large pharmaceutical companies, generally defined as those with $10 billion or more in annual sales, rarely discover new drugs. Large companies have bureaucratic research and development (R&D) processes, in which scientists have comparatively little incentive to innovate. Researchers at emerging firms, on the other hand, may be driven to innovate by the remunerative model such firms use — i.e,. researchers share more fully in the economic rewards of successful drug development. Therefore, the majority of new drugs are now discovered and brought into human clinical trials by emerging startup companies — defined as those with $500 million or less in annual sales, or less than $200 million in annual R&D spending — funded by venture capital and hedge funds. In 2020, early-stage, unprofitable companies brought nearly 62 percent of new industry-originated drugs approved by the FDA to the clinic, with no less than 54 percent of drugs brought to the clinic by emerging firms in each of the last seven years (2016–2022).

Emerging companies are taking their innovations to market without the help of Big Pharma. Large companies that fail to discover drugs in-house often assert that the venture capital used for drug innovation would disappear if large companies sold drugs at lower prices. This claim assumes large companies will purchase the rights to sell drugs developed by emerging companies, whether through licensing agreements to sell on the emerging company’s behalf or by acquiring the emerging company altogether. But this model of drug development, which peaked in the 2010s, is quickly fading as emerging companies increasingly bring new innovations to market on their own. Our analysis found that, in 2013, 23 percent of emerging companies that originated novel drugs retained marketing rights to those drugs through the entire FDA approval process. By 2022, that percentage had more than tripled, to 75 percent. In fact, some drugs originated by profitable companies are now licensed to emerging companies to sell. Of the 17 drugs originated by established companies in 2022, four are currently marketed by emerging companies.

Big Pharma has never been renowned for innovation. Rather, large pharmaceutical companies have traditionally focused on developing and testing conventional therapeutics, such as small molecule drugs and monoclonal antibodies, building and investing in the substantial infrastructure required to support these efforts.

"They are best known for their sales and marketing expertise, not for their innovation and development of novel technologies," said Edward Lanphier, president and CEO of biotherapeutics company Sangamo BioSciences Inc.

Biotech startups benefit society by solving unmet scientific and medical needs, but more can be done to move their technologies to market more quickly.

The recent SARS-CoV-2, monkeypox, poliovirus, and RSV outbreaks remind us of the importance of agile biotechnology companies. We need to reduce the hurdles and time it takes for future BioNTechs and Modernas to find their flow. Successful biotech startups will continue to benefit society by solving formerly intractable scientific and medical problems, but only when they can deliver a viable business model. How can we move more of these technologies to market more quickly?

The COVID-19 pandemic has had a major impact on various industries globally, but the biotech industry has proven to be resilient. Initially, the pandemic caused a setback in the growth and financial stability of the biotech industry, but as the need for scientific breakthroughs, particularly in combating the virus, became more apparent, the biotechnology industry started to recover. According to a study conducted by McKinsey, venture capitalist (VC) companies increased their investments in biotech startups from 2,200 globally in 2016 to 3,100 by 2021. This highlights the growing importance of investing in science, especially in the biotech industry. Biotechnology has a wide range of applications that impact our daily lives in many ways. It plays a crucial role in developing food products, using genetically modified organisms, finding sustainable ways of procuring resources, and managing waste. It has the potential to improve our health and that of the planet. Modern biotechnology has led to several breakthrough products and technologies that aim to reduce our environmental footprint, increase energy efficiency, and promote the use of cleaner energy. It has also contributed to feeding the hungry and enhancing industrial manufacturing processes. The biotechnology industry has seen remarkable growth and progress over the past few years, with numerous startups making a big impact in different areas of the field. Here are some of the startups that have revolutionized the biotechnology industry: Cell Therapy is a startup that has made a significant impact in drug discovery. Their approach involves targeting cell behavior rather than individual proteins. This approach to medicine is based on the understanding of how a disease impacts cell behavior rather than traditional methods of targeting the illness. Neurology is a startup that has revolutionized the treatment of brain disorders through precision-targeted medicine. Their medical method involves the use of remote-controlled micro-robots, known as ‘Bionauts’, which have the potential to change the way central nervous system disorders are treated. Tissue Regeneration Endogena Therapeutics is a clinical-stage biotech company that works on discovering and developing first-in-class endogenous regenerative medicines. Their goal is to repair and regenerate tissues and organs and treat degenerative conditions related to aging and genetic disorders. Cellular Biology believes that biology is the most advanced manufacturing technology on the planet. They aim to program cells to make everything from food to materials to medicine. Their research focuses on modifying microorganisms and they work with several partner companies to develop microbes for different purposes. Genetic Medicines is a startup that aims to transform the future through the power of gene therapy. Their R&D model focuses on changing the lives of patients with central nervous system disorders and their goal is to develop a portfolio of five life-transforming AAV-delivered therapeutics. Gene Therapy is a startup that is revolutionizing the process of how gene therapies are designed, developed, and manufactured. They aim to improve speed to market and reduce costs. Their research targets a wide range of diseases, including obesity and diabetes. Their strong commitment to reducing cost per dose and bringing their products to market faster sets them apart from their competitors. Tissue Regeneration Biosplice’s mission is to restore health through first-in-class therapies that harness alternative splicing. The startup is studying ways to manipulate stem cells in order to prevent conditions such as skin diseases, bone and joint ailments, and even hair loss. They are investigating ways to make cells of aging people regenerate as fast as developing embryos do. Artificial Intelligence in Drug Discovery is a startup that utilizes artificial intelligence to revolutionize drug discovery. They use deep learning algorithms to analyze large datasets, allowing them to discover new drug candidates faster and more accurately than traditional methods. Personalized Cancer Therapy is a leading provider of cancer genomics and personalized medicine. Their technology helps to analyze cancer genomic information and personalize patient treatment accordingly. This has the potential to greatly improve patient outcomes and reduce the risk of side effects. Bioprinting is a bioprinting company that creates functional human tissues for medical research and therapeutic applications. Their technology has the potential to revolutionize the way we approach disease and injury, as well as reduce the need for animal testing. Precision Agriculture The is a subsidiary of Monsanto that provides farmers with customized data analysis to improve their crop yield and reduce waste. Their technology takes into account a variety of factors, including weather patterns and soil analysis, to provide farmers with the information they need to make informed decisions. Synthetic Biology is a synthetic biology company that uses engineered yeast to produce a variety of compounds, including fuels, fragrances, and personal care products. Their technology is designed to reduce the impact of human activities on the environment, as well as to provide sustainable alternatives to traditional products. Biomaterials creates sustainable materials from mushroom roots and agricultural waste. Their materials are being used in a variety of applications, including insulation, furniture, and packaging, and have the potential to greatly reduce the amount of waste generated by traditional materials. These are just a few examples of the startups that have been instrumental in revolutionizing the biotechnology industry. With continued investment and innovation, it's exciting to see what the future holds for this rapidly growing field. The biotech industry has seen in recent years, with increased funding from venture capitalists, partnerships, and IPOs. The amount of venture capital invested in the biotech sector reached $36.6 billion in 2020, with the majority of investments happening in the US, followed by Europe and China. Joint partnerships and ventures reached a total of $170.6 billion in 2020, with a likely much larger undisclosed value. One reason for the growth of the biotech industry is the increased accessibility and affordability of technology. This, combined with growing investment interest, points to a bright future for the industry. In addition, the future of biotech startups is expected to be more . This means that the person who cares most about the research, the founder, will have more control over the direction of the biotech startup. This shift is evident in the recent successful IPOs of biotech startups like Recursion Pharmaceuticals, AbCellera, Ginkgo Bioworks, and SQZ Biotech, which are all led by their creative and scientific founders. This trend is being acknowledged by investors, who are increasingly supportive of companies led by their founders.

An HBM New Drug Approvals report shows that small pharma companies now invent most FDA-approved drugs:

We see that a smaller and smaller share of new drugs come from big pharma. Big pharma and large biotech companies have discovered 10-12 new approved drugs a year for the past decade. Small companies developed 10-15 new approved drugs a year until the last few years, where they have rapidly increased the number of approved drugs coming from their labs.

The drug manufacturers who defend this practice argue that any attempt to mitigate these high prices will “harm innovation.” But they make this claim without establishing the relationship of “Big Pharma” profits to innovation and to improvements in public health. Indeed, despite the claim that profits from large companies fuel innovation, high-value drug development emerges most often from unprofitable startup companies with fewer resources and substantially smaller revenue streams.

In this paper, we undertook a detailed review of 428 FDA drug approvals and financial data from more than 4,000 pharmaceutical companies to examine trends in drug innovation between small and large pharmaceutical companies. We found the following:

The drug discovery process often begins in a university lab, where scientists are nose-deep in petri dishes looking for new strategies to get a drug into the body and test some of the infinite molecular compounds to see which ones could create a breakthrough drug.

Most of this research is powered via the National Institute of Health, a taxpayer-funded organization that contributes to almost every single drug that comes to market.

In the pharmaceutical industry, trademark and trade dress protection have led many patients to believe that brand name and generic drugs truly differ. This differentiation is not grounded in rational concerns regarding manufacturing quality. Instead, a more nebulous and pernicious psychological reaction accounts for consumer preferences. This Article contends that pharmaceutical trademarks and trade dress not only fail to accomplish the core goals of trademark protection, but also undermine them. In differentiating their drugs from generic products, brand name companies ultimately confuse consumers, leading them to believe that branded and generic drugs are distinct products. This confusion, in turn, impedes effective generic competition and reduces patient adherence to prescription drug regimens, ultimately increasing health care costs and morbidity. The replacement of pharmaceutical trademarks and trade dress with manufacturers’ marks would greatly reduce the negative psychological impact associated with pharmaceutical advertising while still enabling consumers to ascertain the source of their medications. Furthermore, the concerns expressed in this Article foreshadow a potentially greater naming problem on the horizon. This past August, the FDA released its Draft Guidance for naming biosimilar products—the generic versions of biologic medications.282 The Federal Trade Commission (“FTC”) just responded to this draft guidance, voicing strong concerns that the FDA proposal could lead to exactly the type of confusion this Article describes.283 As the FTC report explains, “FTC staff is concerned that FDA’s proposal— to assign different suffixes to the drug substance names of biosimilars and their reference biologics—could result in physicians incorrectly believing that biosimilars’ drug substances differ in clinically meaningful ways from their reference biologics’ drug substances, especially since differences in drug substance names have traditionally connoted meaningful differences in drug substances. A misperception that the drug substance in a biosimilar differs in clinically meaningful ways from that in the reference biologic could deter physicians from prescribing biosimilars, thus impeding the development of biosimilar markets and competition.”284 The problem described in this Article and the recent FTC report will only continue to grow in significance as biologic patents expire and biosimilars rush onto the market. As a result, it is imperative that policy makers begin to address the confusion trademarked pharmaceutical create and consider eliminating them altogether.

Grievances against the pharmaceutical industry are common in new media spaces. Influencers on Instagram tell us to shun drugs and embrace the “natural.” Diatribes are shared on Facebook against the profit-seeking motives of Big Pharma. Podcasts, websites, and videos try to convince us that the prescription drug business simply cannot be trusted. Joe Mercola, an osteopath who has set himself up as the one-stop shop alternative to medicine, recently declared on his site that “the drug industry has become the #1 cause of death and disability worldwide, hands down.”

This bag of grievances carries a heavy and myriad load of claims, some more believable than others. And it is precisely those more believable claims that help the conspiratorial pill go down.

Big Pharma companies have taken over a century to become market leaders. Swiss giant Roche was founded in 1896, opens new tab, while U.S. drugmaker Pfizer has been around since 1849, opens new tab, when typhoid and scarlet fever were among the biggest killers. Both giants came to dominate the industry by making savvy calls on common diseases, like cancer and infectious ailments. M&A is also a critical part of their growth story – witness Roche’s $47 billion takeover of Genentech in 2009, and Pfizer’s $43 billion purchase of cancer specialist Seagen, opens new tab in 2023. But now a new breed of tech-savvy drugmakers, once the obvious prey of their established rivals, are threatening their dominance. Over the past five years, Amgen , Regeneron (REGN.O), opens new tab, Genmab (GMAB.CO), opens new tab and Vertex have added $270 billion to their combined market values. That compares to Big Pharma firms like Pfizer, Novartis, GSK (GSK.L), opens new tab, Sanofi (SASY.PA), opens new tab and Roche, whose aggregate market value has declined by nearly $80 billion in the same period.