Biotechnology, Pharmaceuticals & Genetics Industry Market Research

Biotechnology can be defined as the use of living organisms (such as bacteria), biological processes or biological systems to create a desired end-result or end-product.  Primary markets for biotechnology include:  1) Agriculture, where genetically-modified seeds are now in wide use in many nations.  These seeds deliver plants that have can much higher crop yields per acre, and often have qualities such as disease-resistance, resistance to herbicides and drought-resistance.  2) The manufacture of enzymes, including enzymes used in food processing (such as the making of certain dairy products) and in converting organic matter into ethanol for fuel.  3) Pharmaceuticals, where biotechnology creates such therapies as antibodies, interleukins and vaccines based on living organisms (as opposed to the chemical compounds that make up traditional drugs) that can target specific cellular conditions, often with dramatic results (such as the drug Keytruda that famously fought brain cancer for former U.S. President Jimmy Carter).

Biotechnology is a modern word that describes a very old science.  For example, bio-enzymes have always been essential in the production of cheese.  The modern difference is that much of the world’s cheese production today utilizes a bio-engineered version of an enzyme called microbial chymosin.  This chymosin is made by cloning natural genes into useful bacteria.  Another example:  For thousands of years, mankind has used naturally-occurring microbes to convert fruit juices into wine.

Plunkett Research estimates that combined biotech revenues for publicly-held firms headquartered in the U.S. and E.U. will be $176 billion during 2018, while the U.S. firms’ portion will be $135 billion.  Genetically-engineered drugs, or “biotech” drugs, represent roughly 11% of the total global prescription drugs market.  The U.S. Centers for Medicare & Medicaid Services (CMS) forecast called for prescription drug purchases in the U.S. to total about $344.5 billion during 2018, representing about $1,050 per capita.  That projected total is up from only $200 billion in 2005 and a mere $40 billion in 1990.

Estimates of the size of the drugs market vary by source, but it is generally accepted that the global prescription drugs market was more than $1 trillion in 2017.  Plunkett Research estimates the global pharmaceuticals market at $1.2 trillion for 2019.  By 2027, American drug purchases alone may top $576.7 billion, according to the CMS, thanks to a rapidly aging U.S. population, increased access to insurance and the continued introduction of expensive new drugs.

Advanced generations of drugs developed through biotechnology continually enter the marketplace.  The results may be very promising for patients, as a technology-driven tipping point of medical care is approaching where drugs that target specific genes and proteins may eventually become widespread.  However, it continues to be difficult and expensive to introduce a new drug in the U.S.

According to FDA figures, 42 new molecular entities (NMEs) and new biotech drugs (BLAs) were approved in the U.S. during 2018.  These NMEs are novel, new active substances that are categorized differently from “NDAs” or New Drug Applications.  NDAs may seek approval for drugs based on combinations of substances that have been approved in the past.  Also, a large number of generic drug applications are being approved each year.  That is, an application to manufacture a drug that was created as a brand name, and has now lost its patent so that competing firms may seek FDA approval to manufacture it.

Dozens of exciting new, biotech drugs that target specific genes are seeking regulatory approval.  Many of these drugs are for the treatment of specific forms of cancer.  In a few instances, doctors are making treatment decisions based on a patient’s personal genetic makeup.  (This strategy is often referred to as personalized medicine.)  New breakthroughs in genetically targeted drugs occur regularly.  An exciting drug for certain patients who suffer from the skin cancer known as melanoma is a good example.  Zelboraf, developed by drug firms Roche Holding and Daiichi Sankyo, will dramatically aid melanoma patients who are shown through genetic tests to have a mutated gene called BRAF.  In trials, about 50% of such patients saw their tumors shrink, compared to only 5.5% of patients who received traditional chemotherapy.

Personal genetic codes are becoming less expensive and more widely attainable.  Today, the cost of decoding the most important sections of the human genome for an individual patient has dropped dramatically.

Although total drug expenditures are currently small in developing nations such as India, China and Brazil, they have tremendous potential over the mid-term.  This means that major international drug makers will be expanding their presence in these nations.  However, it also means that local drug manufacturers have tremendous incentive to invest in domestic research and marketing.

Significant ethical issues face the biotech industry as it moves forward.  They include, for example, the ability to determine an individual’s likelihood to develop a disease in the future, based on his or her genetic makeup today; the potential to harvest replacement organs and tissues from animals or from cloned human genetic material; and the ability to genetically alter the basic foods that we eat.  These are only a handful of the powers of biotechnology that must be dealt with by society.  Watch for intense, impassioned discussion of such issues and a raft of governmental regulation as new technologies and therapies emerge.

The biggest single issue may be privacy.  Who should have access to your personal genetic records?  Where should they be stored?  How should they be accessed?  Can you be denied employment or insurance coverage due to your genetic makeup?