Most of the top selling drugs from Pfizer and Johnson & Johnson in 2018 were not developed in house.

One of the biggest arguments that big pharma companies make against legislation to reduce drug prices is the negative impact such laws would have on innovation. Lower revenues they say will lead to reduced investment in discovery and development.

A recent review conducted by Stat News of the top-selling drugs on the market in 2018 from Pfizer and Johnson & Johnson, two of the largest biopharma companies, reveals that the majority of these product were not, in fact, developed in house by either firm.

The information was gathered from peer-reviewed publications, media reports, and company press releases on a total of 62 products identified in Pfizer’s and J&J’s 2017 annual reports. Discovery and early development work for just 10 of the 44 Pfizer drugs and two of the 18 J&J medicines were performed inhouse by the two companies.

Most of the other products were discovered and initially developed by other organizations and obtained by Pfizer and J&J through acquisition of the original developers or in-licensing of technology developed at universities and academic centers or startup companies. The researchers suggest that, for the most part, the two companies were only investing in products that were already shown to have efficacy, rather than investing in truly innovative discovery efforts.

These results are in agreement with those of a report by the Government Accounting Office exploring where large pharma companies spend their money and a PhRMA member survey, which found that just $13 billion was spent on clinical studies in 2018. This number is one-third of the amount spent by taxpayers on medical research conducted by the National Institutes of Health ($39.2 billion). In addition, the Congressional Budget Office has estimated that new legislation to lower drug prices could save the government over $345 billion over 10 years.

The conclusion of the researchers is that reduction of drug prices would not significantly impact biopharma innovation, but could lead to lower prices for the acquisition of innovations made by others. With continued support from the NIH, actual innovators should still have the resources they need, and drug makers would still receive fair compensation for bringing those new drugs to market.