Approval-related innovation and progress. The good news, particularly for patients and the healthcare system, is that 2011 FDA biopharmaceutical approvals involved genuine innovation and advances, with nearly all products being approved for either new indications for which no treatments were previously available or for indications for which the last product approval was granted well over a decade ago. A record number (i.e., eight) products were approved with orphan designation. Recombinant antibodies are a leading area for biopharmaceutical development. The large number of recombinant monoclonal antibody and recombinat monoclonal antibody-like products that many companies are relying on for future products may finally be starting to enter the market.

Approval-related problems. Largely due to the limited markets for these orphan and other approved products, 2011 US approvals will not have as much industry economic impact as is likely needed in the long-term. Only two of the twelve approvals are expected to eventually reach blockbuster sales levels of $1 billion or more per year.

Company and country approval trends: Illustrating the trend towards internationalization of manufacturing, a record number of four, or 33%, of newly-approved US biopharmaceuticals are manufactured outside the US—in the United Kingdom. Germany, Mexico, and Italy. These products include the first product manufactured in Latin America that received FDA approval—a scorpion venom antitoxin (equine immunoglobulin F(ab) fragments), Anascorp, manufactured by a Mexican company.

Many biosimilar/biobetter/biogeneric developers are adopting state-of-the-art expression systems and other manufacturing platforms. Biosimilars are competing with products being manufactured using 20-year-old technology. Although biosimilar manufacturers will have technical advantages with newer technology, drug innovators of the the now biosimilars will have long off paid off manufacturing facilities. As a result, biosimilar/biobetter/biogeneric developers will have to compete on the basis of price and adopt aggressive cost-cutting technologies to effectively compete with the original biologic and other biosimilar manufacturers. Although over a dozen biosimilars have received European Union (EU) approval, no biologics have yet been approved as biosimilars by FDA. BioPlan analysis shows that biosimilar/biobetter companies are present in virtually every biotechnology-capable region, including Latin America, Korea, and other areas that have yet to be significantly involved in major Western biopharmaceutical markets (2). For example, of the nearly 400 organizations involved in biosimilars/biobetters development, more than 30 companies are based in India and 14 in China.

The economy. The worldwide economic downturn in recent years continues to affect the biopharmaceutical industry. Yet, with continuing growth in its underlying sales revenue, the industry has managed to remain largely insulated from severe economic problems. Financial issues continue to affect most companies, including the major international (i.e., Big Pharma) companies that are the source for most biopharmaceutical R&D, with many having to deal with their most profitable products coming off patent. Spurred, however, by their interest in new, profitable products, biopharmaceutical R&D continues to increase. R&D invesment includes a record amount of more than $70 billion being invested by the pharmaceutical industry in R&D, about 90% sponsored by the largest international companies, with an increasing number and percentage of pharmaceuticals in the development pipeline being biopharmaceuticals versus chemically manufactured drugs). Biopharmaceuticals provide more exclusivity, market monopolization, and are increasingly attractive to the Big Pharma-type companies.

One important trend, however, is the internationalization of R&D. Large international (i.e., Big Pharma) companies continue their expansion and/or off-shoring of R&D. Several companies have announced major, multimillion, investments in new R&D centers in China, such as Merck Serono's $225 million, four-year commitment in Beijing.