US drug approvals in 2014 hit their highest level in 18 years and recommendations in Europe also came at a rapid rate, driven by expensive new treatments for cancer and rare diseases. After suffering a wave of patent losses on blockbuster products, which peaked two years ago, drugmakers are recovering their ability to bring new medicines to market and productivity is improving.
The US Food and Drug Administration's Center for Drug Evaluation and Research approved 41 novel medicines in 2014, 14 more than a year earlier, according to its website. That tally is second only to the all-time high of 53 approvals reached in 1996. The European Medicines Agency, which includes generic drugs in its list, recommended 82 new medicines last year, up from 79 in 2013 and 57 in 2012.
Innovative new drugs have continued to command premium prices, to the relief of investors but the frustration of insurers and governments, which are starting to push back against the sky-high cost of some modern therapies. Nearly 40 percent of new drugs approved in the United States last year were for rare diseases, underscoring the industry's focus on specialised products where competition is limited and annual costs often exceed $100,000 per patient.
Among 2014's highlights were two cancer drugs that help the body's own immune cells fight tumours and promise better, longer-lasting treatment with fewer adverse side effects. Merck & Co's Keytruda and Bristol-Myers Squibb's Opdivo, which work by blocking a protein called Programmed Death receptor (PD-1), are the first in a coming wave of immunotherapies that analysts believe could generate annual sales of more than $30 billion a year. Fuelled by new drug enthusiasm, biotech initial public offerings hit a record high in 2014 and the wider drug industry saw a flood of deals.
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