Pharmaceutical innovation and generic challenge: recent trends and causal factors

Purpose – This paper aims to analyze the present trends in pharmaceutical innovation and the impact of generic competition. Design/methodology/approach – A secondary research was conducted to collect data related to new drug approvals of various classes over previous years; trends of investment in research and development; and the pipeline of new drug products of pharmaceutical companies. Findings – While the new molecular entity (NME) approval rate has not improved over previous years, innovators have been aggressively pursuing the radical innovation process. Further, there has been a significant increase in incremental innovation. Pharmaceutical companies' investment in research has gone up resulting in higher number of application for new drug approvals. In India, pharmaceutical companies have significantly increased their research investment. However, the NME pipeline is still slim though there has been a significant surge in generic filings. Originality/value – It provides a concise understanding of trends in pharmaceutical innovation and analyzes how various factors are shaping up the innovation process. It also throws light on the evolution story of Indian pharmaceutical companies to become drug innovators.