Biotech or Pharma?

More on the book Science Business:

In an earlier article, I reviewed Pisano's book Science Business: the Promise, the Reality, and the Future of Biotech, in which the Harvard business professor provides compelling evidence showcasing the ineptitude of the biotech industry over the last three decades.

But a recent report by the Government Accountability Office (GAO) paints a different picture all together. In the report, for which data was collected from the Pharmaceutical Research and Manufacturers of America, the GAO found that the pharmaceutical industry was in fact losing to the biotech industry in the number of new molecular entities (NMEs) approved by the FDA over the last few years.

2003 was the first time that biotechs had a higher number of NMEs approved, and the gap has widened since then. Pharma companies had 16 approvals that year, compared to biotechs' 18.

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One major finding of the GAO report however had nothing to do with competition from the biotech industry. From 1993 to 2004, the report found that while R&D spending by the pharmaceutical industry increased by 147%, drug approvals only increased by 38%.