According to the Centers for Disease Control and Prevention (CDC), six in 10 adults have a chronic disease (defined as a condition that lasts one year or more and either requires ongoing medical attention or limits daily life, or both) and four in 10 adults have two or more of these conditions.2 Chronic diseases are the most significant cause of deaths worldwide, and the number is growing every year.
The major chronic conditions are heart disease, diabetes, and cancer. These indications are consequently a major focus for the biopharmaceutical industry, and significant effort and resources are devoted to the development of novel medicines — both biologic and small molecule — that can provide better outcomes than existing therapies.
Cancer is a predominant focus and accounted for the largest share of the small molecule drug discovery market in 2019.3 In 2020, of the 53 new drugs approved by the FDA, 13 were small molecule drugs targeting cancers of different kinds.4 The global market for cancer drugs (small molecule and biologic) was estimated to be $135.5 billion that year and to be growing at a CAGR of 7.5% to reach $275.4 billion by 2030.5 Over 1350 medicines and vaccines for various cancers are undergoing clinical trials today. The most popular targets include different types of leukemia and lymphomas; lung, breast, and prostate cancers; multiple myeloma; and brain tumors.6 Additionally, there is also a robust development pipeline of medicines and vaccines that target other types of cancer, including skin cancer, pancreatic cancer, kidney cancer, colorectal cancer, bladder cancer, stomach cancer, childhood cancers, and other solid tumors.
Other indications holding a significant share of the small molecule drug discovery market include rare diseases and central nervous system disorders. The rare disease segment is predicted to grow at the fastest CAGR through 2027.3
In the United States, a “rare disease” is defined as a disease that affects fewer than 200,000 people. According to the National Institutes of Health (NIH), over 30 million Americans have one of the nearly 7,000 rare diseases that have been identified to date. Before the 1983 passage of the Orphan Drug Act (ODA) in the United States, which provides financial incentives to developers of medicines that treat rare diseases in the form of tax breaks and patent exclusivity, only a few orphan drugs had been approved in the United States to treat rare diseases — just 34 from 1967 to 1983.7 By mid-2018, nearly 7400 orphan drug designation requests were submitted to the FDA, and as of August 2018, a total of 503 unique orphan drugs had been approved for 731 different orphan indications. Of those approved drugs, 78% had orphan-only indications.
Implementation of the FDA’s orphan drug modernization plan, which intended to eliminate the backlog of existing designation requests and ensure timely review of new applications, further accelerated orphan drug approvals.8
In 2017 alone, 429 unique drug candidates were awarded orphan drug designations, up from 320 in 2016 — a 43% increase.8 Eighty new orphan indications were approved by the agency that year.8 Furthermore, in 2014, 2015, 2016, and 2017, 41%, 47%, 45% and 40%, respectively, of new molecular entities (NMEs) approved by the FDA’s Center for Drug Evaluation and Research (CDER) were orphan drugs.9 When all drugs approved by the FDA in 2017 and 2018 are considered, the percentage of orphan drugs is even higher, at 50% or more,9 despite reduction of the Orphan Drug Tax Credit from 50% of applicable clinical costs to 25% in 2017.5
In 2020 and 2021, 31 of 531 and 26 of 5011 novel drug approvals were for drugs intended to treat rare diseases, indicating that the interest in the development of drugs to treat rare diseases remains high. Many of these novel medicines were based on small molecule APIs.
A similar situation is occurring in Europe. Orphan drug approvals by the European Medicine Agency (EMA) more than doubled from eight in 2017 to 17 in 2018, accounting for nearly 29% and 38% of all new drug approvals, respectively.12
Oncology is by far the dominant therapy area for drug development today and is expected to remain so. In 2020, for instance, over 45% of the approved orphan drugs were cancer treatments.13 Outside of cancer drugs, the focus is mainly on treatments for blood and central nervous system disorders.8
It is estimated that 95% of rare diseases still lack an FDA-approved product for treatment, and the vast majority of rare diseases are poorly or only partially understood in terms of natural history, pathophysiology, and clinical manifestations. Today, rapid advances in molecular biology and genetics, as well as the development of new tools for exploring disease mechanisms, are beginning to help researchers to overcome these issues.
The advances in technology mentioned above are also providing greater insight into the individual aspects of smaller subsets of diseases previously considered to be similar among all patients. For instance, there is much greater knowledge about the impact of specific genetic mutations on the responsiveness of different cancers to specific types of treatments. New diagnostic tools are allowing physicians to identify medical intervention strategies with higher probabilities of success and thus provide patients with improved quality of life and better survival rates.
Personalized medicine is a key area for new advancements in oncology. Historically, particular types of cancer have been classified on the basis of the tissue in which the cancer cells originate, a naming convention that continues today (i.e., kidney cancer, skin cancer, pancreatic cancer). However, researchers are working to more precisely and accurately define cancers based on their cellular and molecular characteristics, allowing for the development of more effective and efficient targeted medicines for each patient.
According to IMS, 11% of cancer treatments in 2003 were targeted therapies. By 2013, this number had increased to 46%.13 Such targeted therapies lead to better outcomes. In a particularly impressive example, PhRMA, in its Decade of Innovation in Cancer: 2006–2016 report, showed that the five-year survival rate for chronic myeloid leukemia had increased from 31% to 89%.14
The Personalized Medicines Coalition reports that personalized medicines accounted for more than 25% of newly approved drugs in 2015 through 2021 and more than one third of new drug approvals in four of the last five years.14 The top indications for personalized medicines include various cancers, rare diseases, and infectious diseases. Notably, in 2021, the FDA also expanded the indications for several existing personalized therapies and approved several new diagnostic indications that will enable the development of targeted therapies for a wider range of health conditions.
A growing percentage of all approved drug products and pipeline candidates — both small molecule and biologic therapies — fall under the classification of potent or highly potent. The focus of the industry on cancer indications is an important driver, as a large percentage of oncology treatments are formulated using highly potent cytotoxic compounds. These drugs include those based on chemical APIs and increasingly those based on antibody–drug conjugates (ADCs), which comprise an antibody linked to a small molecule cytotoxic agent.
Other drivers for growth of the highly potent drug segment include the focus on developing more targeted therapies, which are designed to attack specific sites of action and are therefore generally more potent than non-targeted treatments. Efforts by the industry to develop more patient-friendly medications are also leading to the development of more potent candidates that require less frequent dosing across a wider array of indications, including diabetes, cardiovascular diseases, central nervous system disorders, and musculoskeletal diseases. Because HPAPIs are used in lower volumes, fewer resources are consumed and less waste is generated, particularly when advanced manufacturing methods are used, facilitating an increase in sustainability, which is increasingly important in the pharmaceutical industry today.
According to a 2020 Roots Analysis report, 60% of approved anti-cancer drugs globally are based on HPAPIs, and over 25% of all approved drugs worldwide and all pipeline candidates are classified as containing highly potent compounds.16 It has also been reported that more than 1,000 HPAPIs were in development in 2021.17 Consequently, the global market for HPAPIs is estimated to be expanding at a CAGR of 6.1% to reach $27.9 billion by 2027.18 Acumen Research and Consulting, meanwhile, predicts that the global HPAPI market will grow at an even higher CAGR of 8.2% from 2021 to 2028.28 Still other estimates peg the CAGR at close to 10%.17
Controlled substances in the United States are regulated under the Controlled Substance Act (CSA). Classification as a controlled substance is largely based on the potential for abuse, but other criteria include currently accepted medical use in treatment in the United States and international treaties.
Most drugs that are controlled substances are used either to treat neurological disorders or for pain management.20 Opioids, for instance, are the most effective analgesics for severe pain and are often used by acute and terminal cancer patients. Demand for controlled substances for pain management is also driven by the high and increasing incidence of chronic pain among the global geriatric population. Some treatments for attention deficit hyperactivity disorder (ADHD) among children are also formulated using controlled substances.
In many cases, the development of low-dose formulations is enabling the use of APIs like amphetamine for the treatment of sleep disorders, ADHD, and other conditions.20 Other factors contributing to the growth of the controlled substance drug market include new product approvals such as cocaine-based, C-Topical solutions and a renewed interest in the development of drugs based on psychoactive compounds. In 2017, 3,4-methylenedioxy-methamphetamine (MDMA, ecstasy/molly) received a breakthrough therapy designation from the FDA for the treatment of post-traumatic stress disorder (PTSD).21 Many states have decriminalized certain psychedelics, such as psilocybin mushrooms, facilitating their use in drug discovery R&D. More than 6,000 clinical studies involving tens of thousands of patients and a variety of low-dose (psycholytic) psychedelic drugs have been completed in conditions such as alcoholism, depression, schizophrenia, criminal recidivism, and childhood autism.
The global controlled substance market was valued at approximately $64 billion in 2018 and is projected to reach $115 billion by 2027, expanding at a CAGR of ~7% from 2019 to 2027.20
Dramatic advances in research tools for uncovering the mechanisms of diseases has led not only to precision medicines but to the discovery of novel drug targets and new approaches to developing treatments for known targets that were previously considered to be undruggable. This trend is reflected in the fact that in 2020 and 2021, 21 of 5310 and 27 of 5011 novel drugs approved by the FDA, respectively, were identified by the agency as first-in-class — drugs that have new mechanisms of action. While several were biologics, many were drugs formulated with small molecule APIs. In 2021, the latter included antifungal, antiviral, and anticancer agents, as well as treatments for kidney disease and numerous other diseases.
Two examples of first-in-class drugs approved in 2021 are Leqvio, for the treatment of the more common heterozygous form of familial hypercholesterolemia (heFH) and clinical atherosclerotic cardiovascular disease (ASCVD), and Lumakras, for patients with KRASG12C mutated advanced or metastatic non-small cell lung cancer (NSCLC).15 Leqvio is the first small interfering RNA (siRNA) therapy to lower LDL-C among heFH and ASCVD patients. Lumakras is the first approved targeted treatment for tumors with a KRAS mutation, which account for approximately 25% of mutations in lung cancers and have been considered undruggable. It is also an example of a targeted therapy and personalized medicine.
James (Jim) Grote joined That’s Nice / Nice Insight in February 2022 in the role of Director of Research. Jim has a long history within the pharmaceutical industry, beginning in 1996 at Schering Plough Corp. where he served in a variety of roles within the Market Research, Global Business Analytics and US Core Analytics groups for 15 years. Following a senior manager position in Market Research at Mylan Specialty, Jim moved to the vendor side of the business with a stint at IMS Health/IQVIA. Jim’s most recent role was at Celgene/BMS, assisting in a project management position as the company ramped up its readiness to manufacture its new CAR T therapy for treatment of multiple myeloma.