By Kevin E. Noonan —

EvaluatePharma, a London-based company providing forecasting and industry analysis to the biotech and pharma sector, released a report today predicting the big pharma landscape in 2014, based on industry trends, current and prospective drug pipelines, acquisitions and partnering and the predicted "patent cliff" that will occur as blockbuster drugs come "off-patent" and are subject to generic competition.  And the picture looks bleak for U.S. innovator pharmaceutical companies.

As published today on The Wall Street Journal’s Health blog, EvaluatePharma predicts the following changes in pharma company rankings based on prescription and over-the-counter sales between 2007 and 2014:

For comparison, the ranking of the top 10 companies based on actual data for prescription and OTC sales for 2006 is:

According to the company’s website, forecasts are based on "SEC filings, annual and quarterly reports, presentations to analysts and investors, company press releases, supplemented with information from additional sources, notably the FDA and US PTO websites as a source of patent information."  Its database is purportedly updated monthly, and contains information on over 900 biotech and pharma companies.  In addition to its forecasts, the company sponsors industry conferences in the U.S. and abroad.

There are a large number of assumptions built into these projections, but they reinforce the apprehension felt by many about the health of the U.S. innovator pharmaceutical industry.  These projections must be kept in mind when policymakers address again, as they certainly will, the need for patent "reform" pressed with such urgency by the IT industry in its efforts to rid itself of the patent thicket that its business model fosters.  Congress and the new administration must recognize that as important as the IT industry is to the U.S. economy, increasing the expense or time to market of the next electronic gadget is ultimately less important than fostering an environment conducive to developing the next generation of drugs that will reduce morbidity and mortality in an aging population.  Recent history has shown that such policy decisions can have large effects on the pharmaceutical industry:  the hesitancy with which Europe and Japan accepted patentability of biotech inventions over the last twenty years led to a decline in pharmaceutical innovation that inverted the relative prosperity of U.S. and foreign innovator drug companies (see "The Continuing Value of Biotech Patenting").  The resulting  burst of innovation by U.S. drug companies is now approaching the end of its life cycle.  It would be tragic if current concerns of the commercial few endangered the capacity for native U.S. innovator drug companies to create the next generation of blockbuster drugs.