Jan 04, 2015 03:28 PM EST
Approvals for medicine in the United States have reached their highest levels in eighteen years, and recommendations for new drugs in Europe also came at a rapid rate, driven by expensive new treatments for cancer and other rare and serious diseases. After enduring wave after wave of patent losses on some of their larger, more popular drugs, pharmaceutical firms are beginning to recover by bringing new medicines to the market, while also improving their productivity.
In 2014, the US Food and Drug Administration approved 41 new medications. This was fourteen more medications than 2013, and is second only to the record high of 53 approvals in 1996. The European Medicines Agency, which included generic drugs in its list, approved 83 new medicines in 2014, up from 79 in 2013 and 57 in 2012.
Almost 40% of the new drugs approved in the United States were for rare diseases, highlighting the industry's focus on specialization in their products. These products are often unique and face much less competition in the market with costs that can exceed $100,000 per patient.
Two cancer drugs were the highlight of 2014 promising longer-lasting treatment, with few side effects. These drugs help the body's own immune system fight tumors instead of relying on artificial methods of destroying the tumor cells in the body.
Biotech public offerings have hit a new record-high, fueled by enthusiasm for these new drugs. The Nasdaq Biotechnology index and S%P 500 Health Care Index rose by 34% and 23% respectively, though these values are beginning to be questioned as health insurers begin to take a tougher stance on prices.
Many pharmaceutical companies have also felt the pressure of increased competition, causing many of the prices to fall on some older medications. These medicines often have many other options forcing price wars between the drug companies, as they compete for leadership in their individual markets. Express Scripts, the largest manager of prescription drug plans in the United States, shocked the industry by offering a lower price for AbbVie's new hepatitis C treatment.
New drugs must be proven safe and effective to FDA's satisfaction before companies can market them. FDA does not develop or test products; FDA experts review the results of laboratory, animal, and human clinical testing done by manufacturers. If FDA grants an approval, it means the agency has determined that the benefits of the product outweigh the risks for the intended use. This testing often takes years and millions of dollars for drug companies.
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